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Is the Reliance Nippon Life Future Income Plan the right choice to meet your family’s growing financial needs?
Can the Reliance Nippon Life Future Income Plan provide guaranteed income for a worry-free tomorrow?
Can the Reliance Nippon Life Future Income Plan secure your financial future with a steady income throughout life?
This article evaluates Reliance Nippon Life Future Income Plan’s features, pros and cons, and expected returns using an Internal Rate of Return (IRR) analysis. By reviewing this plan, we aim to help you make an informed decision based on your specific financial goals.
Table of Contents:
What is the Reliance Nippon Life Future Income Plan?
What are the features of the Reliance Nippon Life Future Income Plan?
Who is eligible for the Reliance Nippon Life Future Income Plan?
What are the benefits of the Reliance Nippon Life Future Income Plan?
Grace period, Discontinuance and Revival of Reliance Nippon Life Future Income Plan
Free Look Period for Reliance Nippon Life Future Income Plan
Surrendering Reliance Nippon Life Future Income Plan
What are the advantages of the Reliance Nippon Life Future Income Plan?
What are the disadvantages of the Reliance Nippon Life Future Income Plan?
Research Methodology of Reliance Nippon Life Future Income Plan
Benefit Illustration – IRR Analysis of Reliance Nippon Life Future Income Plan
Reliance Nippon Life Future Income Plan Vs. Other Investments
Reliance Nippon Life Future Income Plan Vs. Pure-term + ELSS
Final Verdict on Reliance Nippon Life Future Income Plan
What is the Reliance Nippon Life Future Income Plan?
Reliance Nippon Life Future Income Plan is a Non-Linked, Participating, Individual, Savings Life Insurance Plan. In addition to a life cover, the plan helps you secure an additional income for the future. Your premiums accumulate and grow to give you annual payouts that support your family’s growing needs.
What are the features of the Reliance Nippon Life Future Income Plan?
- Get life cover for the entire Reliance Nippon Life Future Income Plan policy term
- Pay premiums for half of the chosen policy term
- Option to enhance your protection cover through riders
- Receive an annual income, on survival at the end of each Reliance Nippon Life Future Income Plan policy year, except the last policy year, after the premium payment term
- At policy maturity, receive a lump sum benefit to fulfil your dreams
Who is eligible for the Reliance Nippon Life Future Income Plan?
| Minimum | Maximum | |
| Age at Entry | 8 years | 55 years |
| Age at Maturity | 22 years | 75 years |
| Sum Assured | ₹ 2,00,000 | No limit |
| Annualised premium | ₹ 15,680 | No limit |
| Policy term | 14/16/18/20/22/24 years | |
| Premium payment term | Half of the policy term | |
| Premium payment Mode | Yearly, Half-yearly, Quarterly and Monthly | |
What are the benefits of the Reliance Nippon Life Future Income Plan?
1.) Income Benefit
Income Benefit will commence after the Premium Payment Term. On survival of the Life Assured, provided the policy is in force, you will receive an Income Benefit at the end of each policy year over the remaining Policy Term, except the last Policy Year.
Income Benefit is equal to (Base Sum Assured plus accrued Simple Reversionary Bonus) multiplied by Income Benefit factor
| Policy term | 14 | 16 | 18 | 20 | 22 | 24 |
| Number of equal annual instalments of Income Benefit including that paid as part of the Maturity Benefit | 7 | 8 | 9 | 10 | 11 | 12 |
| Income Benefit starts from the end of the policy year | 8 | 8 | 8 | 8 | 8 | 8 |
| Income Benefit Factor | 14.2857% | 12.5000% | 11.1111% | 10.0000% | 9.0909% | 8.3333% |
2.) Maturity Benefit
On survival of the Life Assured till the end of the Reliance Nippon Life Future Income Plan policy term, provided the policy is in force, you will receive
- Guaranteed Sum Assured on Maturity; plus Accrued Simple Revisionary Bonus, if any, multiplied by Income Benefit factor; plus
- Terminal Bonus, if any
3.) Death Benefit
On the death of the Life Assured, provided the Reliance Nippon Life Future Income Plan policy is in force, the claimant(s) will receive the below-mentioned benefit:
Death during premium payment term: Sum Assured on Death plus accrued Simple Reversionary Bonus, if any as on date of death plus Terminal Bonus, if any
Death after premium payment term: Sum Assured on Death plus accrued Simple Reversionary Bonus as on date of death net of accrued Simple Reversionary Bonus already paid as a part of Income Benefit plus Terminal Bonus, if any
Death Benefit is subject to a minimum of 105% of Total Premiums Paid, till the date of death.
Sum Assured on Death is the highest of:
- Annualised Premium multiplied by Death Benefit Multiple
- Base Sum Assured
- Guaranteed Sum Assured on Maturity, which is equal to the Base Sum Assured multiplied by the Income Benefit factor
4.) Bonuses
Simple Reversionary Bonus, if any, will be declared during the premium payment term, starting from the first policy year, which shall accrue at the end of each year, provided the Reliance Nippon Life Future Income Plan policy is in force.
Terminal Bonus, if any, will be payable in case of death or maturity, starting from the 8th policy year onwards, provided the Reliance Nippon Life Future Income Plan policy is in force.
Grace period, Discontinuance and Revival of Reliance Nippon Life Future Income 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 Future Income 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 Future Income 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 Reliance Nippon Life Future Income 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 Reliance Nippon Life Future Income Plan
The 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 Reliance Nippon Life Future Income Plan?
- You can take a loan of up to 80% of the policy’s surrender value.
- Additional riders can be included to enhance the coverage.
- Flexible premium payment options are available—choose from annual, semi-annual, quarterly, or monthly payments.
- Discounts are offered for higher sum assured amounts.
What are the disadvantages of the Reliance Nippon Life Future Income Plan?
- The life coverage offered is inadequate.
- The policy term and premium payment period lack flexibility.
- Returns on the Reliance Nippon Life Future Income Plan are relatively low.
- The cash payouts from the moneyback benefit may fall short of actual financial needs.
- The income benefit cannot be deferred or postponed.
Research Methodology of Reliance Nippon Life Future Income Plan
The Reliance Nippon Life Future Income Plan provides regular income after the premium-paying term and the survival income includes bonuses.
Before committing to this investment, let’s assess the potential returns. Using a sample quote from the official portal, we’ll calculate the estimated returns for the Reliance Nippon Life Future Income Plan and compare them with alternative investment options.
Benefit Illustration – IRR Analysis of Reliance Nippon Life Future Income Plan
Consider a 30-year-old male opting for the Reliance Nippon Life Future Income Plan with a 20-year policy term and a 10-year premium-paying period, contributing an annual premium of ₹92,340. The sum assured is ₹10,00,000.
| Male | 30 years |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 92,340 |
After completing the premium payments, he begins receiving annual survival benefits, including bonuses. At maturity, he receives the final benefit along with a terminal bonus.
The illustration assumes potential returns of 4% and 8%, though these are not guaranteed and may not represent all possible outcomes, as actual returns depend on the policy’s performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 30 | 1 | -92,340 | 10,00,000 | -92,340 | 10,00,000 |
| 31 | 2 | -92,340 | 10,00,000 | -92,340 | 10,00,000 |
| 32 | 3 | -92,340 | 10,00,000 | -92,340 | 10,00,000 |
| 33 | 4 | -92,340 | 10,00,000 | -92,340 | 10,00,000 |
| 34 | 5 | -92,340 | 10,00,000 | -92,340 | 10,00,000 |
| 35 | 6 | -92,340 | 10,00,000 | -92,340 | 10,00,000 |
| 36 | 7 | -92,340 | 10,00,000 | -92,340 | 10,00,000 |
| 37 | 8 | -92,340 | 10,00,000 | -92,340 | 10,00,000 |
| 38 | 9 | -92,340 | 10,00,000 | -92,340 | 10,00,000 |
| 39 | 10 | -92,340 | 10,00,000 | -92,340 | 10,00,000 |
| 40 | 11 | 0 | 10,00,000 | 0 | 10,00,000 |
| 41 | 12 | 1,15,000 | 10,00,000 | 1,43,000 | 10,00,000 |
| 42 | 13 | 1,15,000 | 10,00,000 | 1,43,000 | 10,00,000 |
| 43 | 14 | 1,15,000 | 10,00,000 | 1,43,000 | 10,00,000 |
| 44 | 15 | 1,15,000 | 10,00,000 | 1,43,000 | 10,00,000 |
| 45 | 16 | 1,15,000 | 10,00,000 | 1,43,000 | 10,00,000 |
| 46 | 17 | 1,15,000 | 10,00,000 | 1,43,000 | 10,00,000 |
| 47 | 18 | 1,15,000 | 10,00,000 | 1,43,000 | 10,00,000 |
| 48 | 19 | 1,15,000 | 10,00,000 | 1,43,000 | 10,00,000 |
| 49 | 20 | 1,15,000 | 10,00,000 | 1,43,000 | 10,00,000 |
| 50 | 1,82,500 | 3,36,500 | |||
| IRR | 2.49% | 5.03% | |||
At a 4% return, the estimated future income is ₹1.15 lakh, with a projected maturity value of ₹1.82 lakh.
This results in an Internal Rate of Return (IRR) of 2.49% as per the Reliance Nippon Life Future Income Plan maturity calculator, which is lower than the interest offered by a typical savings account.
At an 8% return, the estimated future income is ₹1.43 lakh, and the maturity value is ₹3.36 lakh, leading to an IRR of 5.03% as per the Reliance Nippon Life Future Income Plan maturity calculator, which is still lower than the rates offered by bank fixed deposits.
A fixed regular income that doesn’t account for inflation is not beneficial for most investors. Although the Reliance Nippon Life Future Income Plan spans 20 years, its rate of return may not justify the investment.
Given its limited life coverage and modest returns, this plan may not be an ideal choice for long-term investors.
Reliance Nippon Life Future Income Plan Vs. Other Investments
The return analysis highlights that the Reliance Nippon Life Future Income Plan offers relatively low yields. The same premium could be better utilized to generate equivalent cash flows through more efficient strategies.
While the Reliance Nippon Life Future Income Plan combines life insurance with investment, separating these two components can lead to improved outcomes. Let’s explore this by reallocating the same premium from the previous example.
Reliance Nippon Life Future Income Plan Vs. Pure-term + ELSS
A pure-term life insurance policy with a sum assured of ₹10 lakhs has an annual premium of ₹6,600 for a 20-year policy term and a 10-year premium payment period. This leaves ₹85,740 annually, which can be invested according to your risk tolerance.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 6,600 |
| Investment | ₹ 85,740 |
Low-risk investors might choose debt instruments like the Public Provident Fund (PPF), while high-risk investors could consider equity-based options such as Equity-Linked Savings Schemes (ELSS). For this comparison, we’ll examine the ELSS route.
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 30 | 1 | -92,340 | 10,00,000 |
| 31 | 2 | -92,340 | 10,00,000 |
| 32 | 3 | -92,340 | 10,00,000 |
| 33 | 4 | -92,340 | 10,00,000 |
| 34 | 5 | -92,340 | 10,00,000 |
| 35 | 6 | -92,340 | 10,00,000 |
| 36 | 7 | -92,340 | 10,00,000 |
| 37 | 8 | -92,340 | 10,00,000 |
| 38 | 9 | -92,340 | 10,00,000 |
| 39 | 10 | -92,340 | 10,00,000 |
| 40 | 11 | 0 | 10,00,000 |
| 41 | 12 | 1,43,000 | 10,00,000 |
| 42 | 13 | 1,43,000 | 10,00,000 |
| 43 | 14 | 1,43,000 | 10,00,000 |
| 44 | 15 | 1,43,000 | 10,00,000 |
| 45 | 16 | 1,43,000 | 10,00,000 |
| 46 | 17 | 1,43,000 | 10,00,000 |
| 47 | 18 | 1,43,000 | 10,00,000 |
| 48 | 19 | 1,43,000 | 10,00,000 |
| 49 | 20 | 1,43,000 | 10,00,000 |
| 50 | 14,29,190 | ||
| IRR | 8.62% | ||
The accumulated value of the ELSS fund is then transferred to an instrument offering a 7% annual return, which serves as the source for annual withdrawals and is followed by full redemption matching the maturity benefit.
| ELSS Tax Calculation | |
| Maturity value after 10 years | 18,87,406 |
| Purchase price | 8,57,400 |
| Long-Term Capital Gains | 10,30,006 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 9,05,006 |
| Tax paid on LTCG | 1,13,126 |
| Maturity value after tax | 17,74,280 |
The pre-tax maturity value of the ELSS investment is ₹18.87 lakhs. After accounting for capital gains tax, the post-tax maturity value stands at ₹17.74 lakhs. This amount is shifted into a 7% yielding investment.
Annual withdrawals mimic the payouts in the 8% return scenario of the Reliance Nippon Life Future Income Plan, followed by full withdrawal at maturity. This generates an Internal Rate of Return (IRR) of 8.62%.
This return would be even higher if you avoid annual withdrawals, providing additional flexibility to manage your cash flow based on actual needs. The Reliance Nippon Life Future Income Plan, with its lack of flexibility and relatively low returns, falls short in comparison.
Final Verdict on Reliance Nippon Life Future Income Plan
The Reliance Nippon Life Future Income Plan is a traditional life insurance product that combines insurance and investment.
It accumulates your premiums to provide annual payouts, but key benefits, such as survival and maturity payouts, are non-guaranteed as they depend on bonuses. Moreover, the sum assured may be insufficient to meet your family’s future financial needs.
Annual withdrawals reduce the plan’s overall returns, as they interrupt the compounding effect of the investment. For generating regular income, it’s more effective to separate life insurance from investments.
The combination of limited life coverage and relatively low returns makes the Reliance Nippon Life Future Income Plan unsuitable for those seeking steady income and it also has a high agent commission.
To adequately protect your family from uncertainties, it’s essential to secure a pure-term life insurance policy. For investments, you should select options that align with your risk profile, life goals, and time horizon.
Rather than relying on insurance plans for regular income, building a well-structured investment portfolio will better support your evolving financial needs.
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For a tailored financial strategy, it’s recommended to consult a Certified Financial Planner, who can guide you in selecting the right products based on your individual circumstances.
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