Reliance Nippon Life Increasing Moneyback Plan: Good or Bad? A Detailed Review

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Can the Reliance Nippon Life Increasing Money Back Plan adapt and grow with your evolving financial needs?

Can the Reliance Nippon Life Increasing Money Back Plan provide peace of mind and secure your family’s financial future?

Can the Reliance Nippon Life Increasing Money Back Plan help you achieve your financial goals by rewarding you with growing returns?

Let’s take a closer look at the Reliance Nippon Life Increasing Moneyback Plan’s features, benefits, drawbacks, and potential returns to determine if it aligns with your needs. A detailed analysis of the returns will be crucial in guiding your final decision.

What is the RNL Increasing Moneyback Plan?

Reliance Nippon Life Increasing Money Back Plan is a Non-Linked, Non-Participating, Individual Savings Life Insurance Plan. Reliance Nippon Life Increasing Money Back Plan gives you periodic payouts along with life insurance cover to safeguard your family against unforeseen eventualities. Guaranteed money-back payouts help to meet the responsibilities at every life stage.

What are the features of the RNL Increasing Moneyback Plan?

Get life cover for the entire Reliance Nippon Life Increasing Money Back Plan Policy Term
Choose to pay premiums for a term of seven years or throughout your Policy Term
Receive guaranteed Money Back benefits every three years, starting from the end of your third Policy year
Enjoy Money Back benefits that increase with each payout
Lump sum maturity benefit at the end of the Reliance Nippon Life Increasing Money Back Plan Policy Term
Option to enhance your protection cover through riders, if any
Receive fixed discounts on premiums depending on the Sum Assured amount chosen
Avail tax benefits on premiums paid and on benefits received, as per applicable Income Tax laws

Who is eligible for the RNL Increasing Moneyback Plan?

	Minimum	Maximum
Age at Entry	15 years	55 years
Age at Maturity	30 years	70 years
Sum Assured	₹ 1,00,000	No limit
Annualised premium	₹ 18,000	No limit
Policy term	15 years
Premium payment term	Limited Pay – 7 & Regular Pay – 15
Premium payment Mode	Yearly, Half-yearly, Quarterly and Monthly

What are the benefits of the RNL Increasing Moneyback Plan?

1.) Money Back Benefit

On survival of the Life Assured, Money Back benefits as a percentage of the Base Sum Assured will be paid at regular intervals of three years starting from the end of the third Policy year. The Money Back payouts applicable are as below:

End of the policy year	3	6	9	12
Money Back Benefits (% of Base Sum Assured)	10%	20%	30%	50%

2.) Maturity Benefit

On survival of the Life Assured till the end of the Reliance Nippon Life Increasing Money Back Plan Policy Term, the Guaranteed Sum Assured on Maturity, equal to the Base Sum Assured, will be paid to the policyholder.

3.) Death Benefit

In the unfortunate event of death of the Life Assured, the death benefit will be payable, which is the higher of:

Sum Assured on Death
105% of Total Premiums Paid

Where Sum Assured on Death is the highest of:

11 times Annualized Premium
Absolute amount assured to be paid on Death, i.e. Base Sum Assured,
Guaranteed Sum Assured on Maturity (Base Sum Assured)

Grace period, Discontinuance and Revival of RNL Increasing Moneyback 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 Increasing Money Back 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 Reliance Nippon Life Increasing Money Back Plan policy in lapsed or paid-up condition may be revived by the 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 Increasing Moneyback 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 Increasing Moneyback Plan

The Reliance Nippon Life Increasing Money Back 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 Increasing Moneyback 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 RNL Increasing Moneyback Plan?

- The life coverage offered is inadequate.
- The Reliance Nippon Life Increasing Money Back Plan policy term and premium payment period lack flexibility.
- Returns on the plan are relatively low.
- The cash payouts from the moneyback benefit may fall short of actual financial needs.
- The moneyback benefit cannot be deferred or postponed.

Research Methodology of RNL Increasing Moneyback Plan

The Reliance Nippon Life Increasing Moneyback Plan provides cash payouts at regular intervals, with these payouts increasing over time.

At the end of the policy term, a maturity benefit is also available. To better assess the cash flow pattern and estimate the returns, let’s examine a specific example and calculate the Internal Rate of Return (IRR).

Benefit Illustration – IRR Analysis of RNL Increasing Moneyback Plan

A 30-year-old male opts for the Reliance Nippon Life Increasing Moneyback Plan with a sum assured of ₹10 Lakhs. The policy term and premium payment term both span 15 years, with an annual premium of ₹1,11,810.

Male	30 years
Sum Assured	₹ 10,00,000
Policy Term	15 years
Premium Paying Term	15 years
Annualised Premium	₹ 1,11,810

Throughout the policy, he receives moneyback benefits of ₹1 Lakh, ₹2 Lakhs, ₹3 Lakhs, and ₹5 Lakhs at 3-year intervals.

Additionally, the maturity benefit of ₹ 10 Lakhs is paid at the end of the policy term. The IRR for this cash flow is 4.50% as per the Reliance Nippon Life Increasing Money Back Plan maturity calculators.

Age	Year	Annualised premium / Maturity benefit	Death benefit
30	1	-1,11,810	10,00,000
31	2	-1,11,810	10,00,000
32	3	-1,11,810	10,00,000
33	4	-11,810	10,00,000
34	5	-1,11,810	10,00,000
35	6	-1,11,810	10,00,000
36	7	88,190	10,00,000
37	8	-1,11,810	10,00,000
38	9	-1,11,810	10,00,000
39	10	1,88,190	10,00,000
40	11	-1,11,810	10,00,000
41	12	-1,11,810	10,00,000
42	13	3,88,190	10,00,000
43	14	-1,11,810	10,00,000
44	15	-1,11,810	10,00,000
45		10,00,000

	IRR	4.50%

While the plan offers guaranteed, regular payouts, the returns are underwhelming for investors. Furthermore, the periodic payouts may not be sufficient to cover major expenses and could even encourage unnecessary spending.

The sum assured also falls short of addressing the family’s future financial requirements.

Investing long-term in a plan that yields returns lower than the inflation rate defeats the purpose of saving. Given the low returns and the limited impact of regular payouts, the RNL Increasing Moneyback Plan is not an ideal choice for achieving long-term financial goals.

RNL Increasing Moneyback Plan Vs. Other Investments

In this section, we’ll explore alternative strategies to generate the same cash flow pattern as the Reliance Nippon Life Increasing Moneyback Plan, but by separating life cover from investments.

Instead of bundling insurance with investment, we’ll opt for a pure-term life insurance policy. Let’s examine this with the following case:

RNL Increasing Moneyback Plan Vs. Pure-term + ELSS

A pure-term life insurance policy with a sum assured of ₹10 Lakhs requires an annual premium of ₹20,100 for a 15-year term. This leaves ₹91,710 per year available for investment, which can be allocated based on your risk profile.

Pure Term Life Insurance Policy
Sum Assured	₹ 10,00,000
Policy Term	15 years
Premium Paying Term	15 years
Annualised Premium	₹ 20,100
Investment	₹ 91,710

For low-risk investors, options like the Public Provident Fund (PPF) could be considered, while higher-risk investors might explore equity options such as Equity-Linked Savings Schemes (ELSS). In this scenario, we assume the investment is made in an ELSS fund.

		Term insurance + ELSS
Age	Year	Term Insurance premium + ELSS	Death benefit
30	1	-1,11,810	10,00,000
31	2	-1,11,810	10,00,000
32	3	-1,11,810	10,00,000
33	4	-11,810	10,00,000
34	5	-1,11,810	10,00,000
35	6	-1,11,810	10,00,000
36	7	88,190	10,00,000
37	8	-1,11,810	10,00,000
38	9	-1,11,810	10,00,000
39	10	1,88,190	10,00,000
40	11	-1,11,810	10,00,000
41	12	-1,11,810	10,00,000
42	13	3,88,190	10,00,000
43	14	-1,11,810	10,00,000
44	15	-1,11,810	10,00,000
45		14,81,305

	IRR	7.78%

To match the cash payouts of the RNL Increasing Moneyback Plan, withdrawals are made from the ELSS fund, accounting for capital gains tax on each withdrawal.

After 15 years, the ELSS fund’s final pre-tax value stands at ₹15.36 Lakhs, with a post-tax value of ₹14.81 Lakhs. The combined IRR for the pure-term life insurance policy and ELSS investment comes to 7.78% (post-tax).

Maturity value after 15 years	15,36,973.22
Less
Purchase price	9,66,625.20
Long-term capital gains	5,70,348.02
Exemption limit	1,25,000.00
Taxable LTCG	4,45,348.02
Tax paid on LTCG	55,668.50
Maturity value after tax	14,81,304.72

The withdrawal pattern mirrors that of the RNL Increasing Moneyback Plan. However, avoiding periodic withdrawals could result in even higher returns.

When planning for life goals, it is generally more effective to invest separately rather than depending on cash payouts from moneyback plans like the RNL Increasing Moneyback Plan.

Final Verdict on RNL Increasing Moneyback Plan

The Reliance Nippon Life Super Moneyback Plan offers regular, guaranteed cash payouts along with life coverage throughout the policy term. However, both the cash payouts and the life coverage fall short for most individuals. It’s a mediocre money-back plan that lacks flexibility in adjusting the premium payment term, policy term, and money payout benefits.

While the cash flow pattern might seem appealing, the returns are relatively low. The moneyback benefits are unlikely to cover major expenses and could often lead to unnecessary spending.

Additionally, the sum assured is inadequate to meet future financial needs. As a long-term investment, the RNL Increasing Moneyback Plan does not meet the expectations of most investors and it has a high agent commission.

A key drawback of this plan is the mismatch between the moneyback benefits and actual financial needs. Instead, it’s more effective to create an investment portfolio that aligns with your specific financial goals.

However, securing sufficient life insurance is crucial to protect your family from unforeseen risks. Ensure that your sum assured takes into account your life goals, future needs, and liabilities.

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To develop an investment portfolio based on your risk tolerance, life goals, and time horizon, consider consulting a Certified Financial Planner. They can help you create a tailored financial plan to meet your individual needs.

Reliance Nippon Life Increasing Moneyback Plan: Good or Bad? A Detailed Review

Table of Contents:

What is the RNL Increasing Moneyback Plan?

What are the features of the RNL Increasing Moneyback Plan?

Who is eligible for the RNL Increasing Moneyback Plan?