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Can the Reliance Nippon Life Blue Chip Savings Insurance Plan offer security and financial stability?
Can the Reliance Nippon Life Blue Chip Savings Insurance Plan secure your savings with added protection?
Can the Reliance Nippon Life Blue Chip Savings Insurance Plan provide additional security for your family’s future?
In this article, we will review the key features, benefits, drawbacks, and return potential of the Reliance Nippon Life Blue Chip Savings Insurance Plan. This guide will also help you understand how to effectively channel your savings for long-term financial security.
Table of Contents:
What is the RNL Blue Chip Savings Insurance Plan?
What are the features of the RNL Blue Chip Savings Insurance Plan?
Who is eligible for the RNL Blue Chip Savings Insurance Plan?
What are the benefits of the RNL Blue Chip Savings Plan?
Grace period, Discontinuance and Revival of RNL Blue Chip Savings Insurance Plan
Free Look Period for RNL Blue Chip Savings Insurance Plan
Surrendering RNL Blue Chip Savings Insurance Plan
What are the advantages of the RNL Blue Chip Savings Insurance Plan?
What are the disadvantages of the RNL Blue Chip Savings Insurance Plan?
Research Methodology of RNL Blue Chip Savings Insurance Plan
Benefit Illustration – IRR Analysis of RNL Blue Chip Savings Insurance Plan
RNL Blue Chip Savings Insurance Plan Vs. Other Investments
RNL Blue Chip Savings Insurance Plan Vs. Pure-term + ELSS
Final Verdict on RNL Blue Chip Savings Insurance Plan
What is the RNL Blue Chip Savings Insurance Plan?
Reliance Nippon Life Blue Chip Savings Insurance Plan is a Non-Linked, Participating, Individual, Savings Life Insurance Plan. The plan offers you the flexibility to choose an appropriate life cover that protects your family against any unforeseen eventualities.
Reliance Nippon Life Blue Chip Savings Insurance Plan helps you accumulate your savings for your financial needs at every stage of life.
What are the features of the RNL Blue Chip Savings Insurance Plan?
- Receive life coverage throughout Reliance Nippon Life Blue Chip Savings Insurance Plan policy term.
- Select your preferred premium payment duration – 5, 7, or 10 years.
- At policy maturity, receive a lump sum payout that includes the Basic Sum Assured, Guaranteed Additions, and Bonuses.
- Flexibly choose your premium payment frequency – annually, half-yearly, quarterly, or monthly.
- Access loan facilities to handle unexpected financial needs.
- Enjoy tax benefits as per applicable Income Tax laws.
Who is eligible for the RNL Blue Chip Savings Insurance Plan?
| Minimum | Maximum | |
| Age at Entry | 8 years | 60 years |
| Age at Maturity | 18 years | 75 years |
| Sum Assured | ₹ 77,905 | No limit |
| Death benefit option | 11x and 7x | |
| Policy term | 10 years | 15 years |
| Premium payment term | 5/7/10 years | |
| Premium payment Mode | Yearly, Half-yearly, Quarterly and Monthly | |
What are the benefits of the RNL Blue Chip Savings Plan?
1.) Maturity Benefits
On survival of the Life Assured till maturity, provided the Reliance Nippon Life Blue Chip Savings Insurance Plan Policy is in force, the sum of the following benefits will be payable:
- Guaranteed Sum Assured on Maturity
- Accrued Reversionary Bonus plus Terminal Bonus, if any
Where Guaranteed Sum Assured on Maturity is equal to Base Sum Assured plus all Guaranteed Additions payable at maturity.
Simple Reversionary Bonus will be declared during the policy term, starting from the first policy year, which shall accrue at the end of each year, provided the policy is in force. Terminal bonus, if any, will be payable on death or maturity from the 10th policy year onwards, provided the policy is in force.
2.) Death benefit
On the death of the Life Assured during the Reliance Nippon Life Blue Chip Savings Insurance Plan Policy Term, provided the Policy is in force as of the date of death, the claimant(s) shall receive the higher of:
- Sum Assured on Death plus Accrued Reversionary Bonus plus Terminal Bonus, if any, and
- 105% of Total Premiums Paid, till the date of death
Where Sum Assured on Death is the highest of:
- Annualised Premium multiplied by Death Benefit Multiple (11 times/7 times)
- Base Sum Assured
- Guaranteed Sum Assured on Maturity
Grace period, Discontinuance and Revival of RNL Blue Chip Savings Insurance Plan
Grace period
There is a grace period of 30 days applicable from the due date of payment of premiums if the premium payment frequency is yearly, half-yearly or quarterly. In case the premiums are paid in monthly frequency, then the grace period applicable is 15 days.
Discontinuance
If all due premiums have not been paid for the first two consecutive policy years in full, the Reliance Nippon Life Blue Chip Savings Insurance Plan policy shall lapse at the end of the grace period.
Once a policy has acquired a surrender value (all due premiums have been paid for the first two consecutive policy years), and if the policyholder chooses to discontinue the premium payment, the policy will continue as a paid-up (or reduced paid-up) policy with reduced benefits.
Paid-Up Sum Assured = Base Sum Assured multiplied by (Number of premiums paid divided by total number of premiums payable)
Revival
A policy in lapsed or paid-up condition may be revived by the Reliance Nippon Life Blue Chip Savings Insurance Plan policyholder during the revival period of 5 years from the due date of the first unpaid due premium or date of maturity of the base policy whichever is earlier.
Free Look Period for RNL Blue Chip Savings Insurance Plan
In the event you disagree with any of the policy terms or conditions, you shall have the option to return the policy to the company for cancellation within 15 days of its receipt (30 days of receipt where the Policy has been obtained through Distance Marketing mode).
Surrendering RNL Blue Chip Savings Insurance Plan
The Reliance Nippon Life Blue Chip Savings Insurance Plan policy shall acquire a Surrender Value if all due premiums have been paid for the first two consecutive policy years in full.
The Surrender Value payable is higher than the Guaranteed Surrender Value or Special Surrender Value of the Policy
What are the advantages of the RNL Blue Chip Savings Insurance Plan?
- Access a loan of up to 80% of the policy’s surrender value.
- Boost your coverage with optional riders.
- Select from flexible premium payment options, including annual, semi-annual, quarterly, or monthly payments.
- Guaranteed additions and bonuses increase your maturity benefit.
What are the disadvantages of the RNL Blue Chip Savings Insurance Plan?
- The life coverage offered is inadequate.
- The overall returns are relatively low.
- The policy term and premium payment options are not very flexible.
- The benefits fluctuate due to the inclusion of bonuses.
Research Methodology of RNL Blue Chip Savings Insurance Plan
The RNL Blue Chip Savings Insurance Plan offers a key investment feature of paying premiums for a limited term and receiving maturity benefits along with accrued additions and bonuses.
To make informed decisions, it’s important to assess the cash flow in terms of return percentages. Let’s examine the benefit illustration provided in the policy brochure.
Benefit Illustration – IRR Analysis of RNL Blue Chip Savings Insurance Plan
Consider a 35-year-old male opting for the RNL Blue Chip Savings Insurance Plan with a 15-year policy term and a 7-year premium payment term, contributing an annual premium of ₹50,000. The base sum assured is ₹2.18 lakhs, with a death benefit of ₹5.5 lakhs.
| Male | 35 years |
| Sum Assured | ₹ 2,18,112 |
| Policy Term | 15 years |
| Premium Paying Term | 7 years |
| Annualised Premium | ₹ 50,000 |
At maturity, he receives:
– Base Sum Assured
– Guaranteed Additions at Maturity
– Accrued Reversionary Bonus and Terminal Bonus
The illustration assumes investment rates of 4% and 8%, though these returns are not guaranteed and may vary depending on the policy’s actual performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -50,000 | 5,50,000 | -50,000 | 5,50,000 |
| 36 | 2 | -50,000 | 5,50,000 | -50,000 | 5,50,000 |
| 37 | 3 | -50,000 | 5,50,000 | -50,000 | 5,50,000 |
| 38 | 4 | -50,000 | 5,50,000 | -50,000 | 5,50,000 |
| 39 | 5 | -50,000 | 5,50,000 | -50,000 | 5,50,000 |
| 40 | 6 | -50,000 | 5,50,000 | -50,000 | 5,50,000 |
| 41 | 7 | -50,000 | 5,50,000 | -50,000 | 5,50,000 |
| 42 | 8 | 0 | 5,50,000 | 0 | 5,50,000 |
| 43 | 9 | 0 | 5,50,000 | 0 | 5,50,000 |
| 44 | 10 | 0 | 5,50,000 | 0 | 5,50,000 |
| 45 | 11 | 0 | 5,50,000 | 0 | 5,50,000 |
| 46 | 12 | 0 | 5,50,000 | 0 | 5,50,000 |
| 47 | 13 | 0 | 5,50,000 | 0 | 5,50,000 |
| 48 | 14 | 0 | 5,50,000 | 0 | 5,50,000 |
| 49 | 15 | 0 | 5,50,000 | 0 | 5,50,000 |
| 50 | 4,50,292 | 6,30,889 | |||
| IRR | 2.11% | 4.99% | |||
At a 4% return, the estimated final payout is ₹4.50 lakhs, resulting in an Internal Rate of Return (IRR) of 2.11% as per the Reliance Nippon Life Blue Chip Savings Insurance Plan maturity calculator, which is lower than typical savings account interest rates.
With an 8% return, the projected maturity value is ₹6.30 lakhs, giving an IRR of 4.99% as per the Reliance Nippon Life Blue Chip Savings Insurance Plan maturity calculator, still lower than the interest rates offered by bank fixed deposits.
Despite being a long-term investment of 15 years, the returns from the RNL Blue Chip Savings Insurance Plan may not keep pace with inflation, making it difficult to meet future financial goals. Moreover, the life cover provided is inadequate.
Given the low life coverage and modest returns, the RNL Blue Chip Savings Insurance Plan may not be an ideal choice for long-term investors.
RNL Blue Chip Savings Insurance Plan Vs. Other Investments
The return analysis clearly shows that the corpus accumulated through the RNL Blue Chip Savings Plan will not be sufficient to achieve life goals. The same premium could be more effectively utilized to build a substantial corpus.
While the RNL Blue Chip Savings Insurance Plan combines life coverage and investment, separating these two components could lead to better financial outcomes. Let’s explore this by using the same premium from the previous example.
RNL Blue Chip Savings Insurance Plan Vs. Pure-term + ELSS
A pure-term life insurance policy with a sum assured of ₹5.5 lakhs costs an annual premium of ₹5,900 for a 15-year term with a 5-year premium payment period. This leaves ₹44,100 annually, which can be invested based on your risk tolerance.
In the previous example, the premium payment term was 7 years, but here it is 5 years. For the first 5 years, the remaining amount after paying the insurance premium is invested, and for the next 2 years, the full premium is allocated toward investments.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 5,50,000 |
| Policy Term | 15 years |
| Premium Paying Term | 5 years |
| Annualised Premium | ₹ 5,900 |
| Investment | ₹ 44,100 |
Low-risk investors could consider debt instruments like the Public Provident Fund (PPF), while high-risk investors might opt for equity instruments such as Equity-Linked Savings Schemes (ELSS). In this comparison, we’ll use ELSS as the investment option.
| ` | Term insurance + ELSS | ||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 35 | 1 | -50,000 | 5,50,000 |
| 36 | 2 | -50,000 | 5,50,000 |
| 37 | 3 | -50,000 | 5,50,000 |
| 38 | 4 | -50,000 | 5,50,000 |
| 39 | 5 | -50,000 | 5,50,000 |
| 40 | 6 | -50,000 | 5,50,000 |
| 41 | 7 | -50,000 | 5,50,000 |
| 42 | 8 | 0 | 5,50,000 |
| 43 | 9 | 0 | 5,50,000 |
| 44 | 10 | 0 | 5,50,000 |
| 45 | 11 | 0 | 5,50,000 |
| 46 | 12 | 0 | 5,50,000 |
| 47 | 13 | 0 | 5,50,000 |
| 48 | 14 | 0 | 5,50,000 |
| 49 | 15 | 0 | 5,50,000 |
| 50 | 11,53,124 | ||
| IRR | 10.27% | ||
The pre-tax maturity value of the ELSS fund is ₹12.68 lakhs. After accounting for capital gains tax, the post-tax maturity value comes to ₹11.53 lakhs, delivering a post-tax Internal Rate of Return (IRR) of 10.27%.
| ELSS Tax Calculation | |
| Maturity value after 15 years | 12,68,499 |
| Purchase price | 2,20,500 |
| Long-Term Capital Gains | 10,47,999 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 9,22,999 |
| Tax paid on LTCG | 1,15,375 |
| Maturity value after tax | 11,53,124 |
The accumulated corpus is significantly higher compared to the RNL Blue Chip Savings Plan. The return rate outpaces inflation, making this a far more effective strategy for wealth accumulation and speeding up your investment journey.
Final Verdict on RNL Blue Chip Savings Insurance Plan
The RNL Blue Chip Savings Insurance Plan provides a lump sum payout at policy maturity and life cover throughout the policy term—benefits typical of any traditional life insurance policy.
However, key features such as the death benefit and maturity benefits are not guaranteed, as they depend on bonuses.
The plan lacks flexibility in adjusting the premium payment term and policy duration. A closer look at the returns analysis reveals that the returns are lower than the inflation rate, and the sum assured is insufficient.
Overall, both the insurance and investment aspects of the RNL Blue Chip Savings Insurance Plan are not favourable for investors and also it has a high agent commission.
Securing adequate life insurance is vital to protect your family from uncertainties, and pure-term life insurance policies are best suited for this purpose. As an investor, it is important to assess your risk tolerance before beginning your investment journey.
It is more effective to invest your savings separately rather than combining insurance and investment.
When it comes to financial advice, are Quora, Facebook, and Twitter the final word?
To align your investments with your risk profile, life goals, and time horizon, it’s essential to choose plans that meet your objectives. For building a robust investment portfolio, it’s advisable to consult a Certified Financial Planner who can help you select the right products based on your specific needs.
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