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Can the Reliance Nippon Life Milestone Plan help you achieve your financial goals while providing life cover?
Can the Reliance Nippon Life Milestone Plan offer the flexibility you need to secure every important milestone in your life?
Can the Reliance Nippon Life Milestone Plan safeguard your future in a reliable way?
A detailed review of the features, benefits, drawbacks, and potential returns of the Reliance Nippon Life Milestone Plan will provide you with a clearer understanding. This analysis serves as a foundation for making informed financial decisions.
Table of Contents:
What is the Reliance Nippon Life Milestone Plan?
What are the features of the Reliance Nippon Life Milestone Plan?
Who is eligible for the Reliance Nippon Life Milestone Plan?
What are the benefits of the Reliance Nippon Life Milestone Plan?
Grace period, Discontinuance and Revival of Reliance Nippon Life Milestone Plan
Free Look Period for Reliance Nippon Life Milestone Plan
Surrendering Reliance Nippon Life Milestone Plan
What are the advantages of the Reliance Nippon Life Milestone Plan?
What are the disadvantages of the Reliance Nippon Life Milestone Plan?
Research Methodology of Reliance Nippon Life Milestone Plan
Benefit Illustration – IRR Analysis of Reliance Nippon Life Milestone Plan
Reliance Nippon Life Milestone Plan Vs. Other Investments
Reliance Nippon Life Milestone Plan Vs. Pure-term + PPF / ELSS
Final Verdict on Reliance Nippon Life Milestone Plan
What is the Reliance Nippon Life Milestone Plan?
Reliance Nippon Life Milestone Plan is a non-linked, participating, limited premium pay, endowment Life Insurance Plan. It helps you accumulate your savings along with the advantage of life insurance protection at every stage of life. Reliance Nippon Life Milestone Plan offers a lump sum benefit at maturity and a lump sum life insurance cover which protects your family against any unforeseen eventualities.
What are the features of the Reliance Nippon Life Milestone Plan?
- Life Insurance covers the entire Policy Term.
- Lump Sum benefit payable at maturity to help you meet your financial goals
- Choose to pay premiums for 5,7,10 or 15 years aligned to your financial goals
- Waiver of Premium Benefit is an in-built feature under the Life-plus option
- Get accrued bonus (if any), from the first year onward to boost your savings
- Option to convert maturity payout into a regular income for a period of 5,10 or 15 years
Who is eligible for the Reliance Nippon Life Milestone Plan?
What are the benefits of the Reliance Nippon Life Milestone Plan?
1.) Maturity Benefit
On survival of the Life Assured till the end of the Reliance Nippon Life Milestone Plan Policy Term, the aggregate of the following benefits will be payable:
- Sum Assured on Maturity
- Accrued Compounded Reversionary Bonus (if any)
- Terminal Bonus (if any)
Sum Assured on Maturity is equal to the Base Sum Assured for this Policy.
2.) Death Benefit
Life Option:
On the death of the Life Assured during the Reliance Nippon Life Milestone Plan Policy Term, the nominee will receive higher of:
- Sum Assured on Death plus Accrued Compounded Reversionary Bonus and Terminal Bonus (if any)
- 105% of all the premiums paid as on the date of death of Life Assured, excluding the underwriting extra premiums, rider premiums and loadings for modal premiums, if any
Life Plus option:
In addition to the Lump sum death benefit, as specified in the Life option, all future premiums are waived off under the base policy on the death of the Proposer. The Reliance Nippon Life Milestone Plan policy shall continue with all the benefits as applicable on the Life Assured.
In both the options, The Sum Assured on Death is the higher of:
- 10 times Annualized Premium for entry ages of Life Assured less than or equal to 55 years or 7 times Annualized Premium for entry ages of Life Assured greater than 55 years
- Base Sum Assured
- Sum Assured on Maturity
3.) Bonus
Compounded Reversionary Bonus will be declared annually and shall apply as a percentage of Base Sum Assured and accrued Reversionary Bonus, if any. It shall accrue to the Reliance Nippon Life Milestone Plan Policy and form part of the guaranteed benefits
Grace period, Discontinuance and Revival of Reliance Nippon Life Milestone Plan
Grace period
A grace period of 30 days (15 days for monthly mode) will be given to pay your premium.
Discontinuance
The Reliance Nippon Life Milestone Plan policy shall acquire a surrender value on payment of:
At least two full years’ premium if the Premium Payment Term is less than 10 years
At least three full years’ premium if the Premium Payment Term is 10 years or more
If you discontinue the payment of premiums before your policy has acquired a surrender value, the policy shall lapse at the end of the grace period.
Once a policy has acquired a surrender value and if the Reliance Nippon Life Milestone Plan policyholder chooses to discontinue the premium payment, the policy will continue as a paid-up (or reduced paid-up) policy with reduced benefits.
Revival
A policy in lapsed or paid-up condition may be revived by the Reliance Nippon Life Milestone Plan policyholder during the revival period of two 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 Milestone Plan
In the event you disagree with any of the policy terms or conditions, you shall have the option to return the Reliance Nippon Life Milestone Plan 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 Milestone Plan
The Reliance Nippon Life Milestone Plan policy shall acquire a surrender value on payment of:
- At least two full years’ premium if the Premium Payment Term is less than 10 years
- At least three full years’ premium if the Premium Payment Term is 10 years or more.
If your policy has acquired a surrender value and you choose to discontinue your policy, you will be entitled to the surrender value, which is higher of
- Guaranteed Surrender Value (GSV) (which is the sum of the GSV of total premiums paid and the GSV of accrued bonus as on the date of surrender) and
- Special Surrender Value (SSV)
What are the advantages of the Reliance Nippon Life Milestone Plan?
- You can avail a loan of up to 80% of the policy’s surrender value.
- Riders can be added to increase the coverage.
- Premium payments are flexible, with options to pay annually, semi-annually, quarterly, or monthly.
- You may choose the Settlement Option to convert a part or whole of the Maturity Benefit into instalments.
- Discounts for high premiums are applicable
What are the disadvantages of the Reliance Nippon Life Milestone Plan?
- The life coverage offered is inadequate.
- Since this is a participating policy, the benefits are not guaranteed.
- The returns are relatively low.
Research Methodology of Reliance Nippon Life Milestone Plan
The Reliance Nippon Life Milestone Plan offers maturity benefits along with bonuses at the end of the Reliance Nippon Life Milestone Plan policy term.
However, before investing, it’s important to assess the potential returns. Let’s calculate these returns using the figures provided in the policy brochure and compare them with other investment options.
Benefit Illustration – IRR Analysis of Reliance Nippon Life Milestone Plan
Consider a 40-year-old male who selects the Reliance Nippon Life Milestone Plan with the Life Option variant. The policy has a 20-year term and requires a 15-year premium payment period, with an annual premium of ₹1 lakh.
| Male | 40 years |
| Sum Assured | ₹ 12,92,147 |
| Policy Term | 20 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 1,00,000 |
The Reliance Nippon Life Milestone Plan policy illustration assumes returns at 4% and 8% though these are not guaranteed and may not reflect the full range of potential outcomes.
The actual maturity benefits will 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 |
| 40 | 1 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 41 | 2 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 42 | 3 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 43 | 4 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 44 | 5 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 45 | 6 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 46 | 7 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 47 | 8 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 48 | 9 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 49 | 10 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 50 | 11 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 51 | 12 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 52 | 13 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 53 | 14 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 54 | 15 | -1,00,000 | 12,92,147 | -1,00,000 | 12,92,147 |
| 55 | 16 | 0 | 12,92,147 | 0 | 12,92,147 |
| 56 | 17 | 0 | 12,92,147 | 0 | 12,92,147 |
| 57 | 18 | 0 | 12,92,147 | 0 | 12,92,147 |
| 58 | 19 | 0 | 12,92,147 | 0 | 12,92,147 |
| 59 | 20 | 0 | 12,92,147 | 0 | 12,92,147 |
| 60 | 19,64,428 | 32,10,576 | |||
| IRR | 2.07% | 5.79% | |||
At a 4% return, the estimated maturity benefit is ₹19.64 lakhs, resulting in an IRR (Internal Rate of Return) of 2.07% as per the Reliance Nippon Life Milestone Plan maturity calculator, which is even lower than a typical savings account interest rate.
At an 8% return, the projected maturity benefit is ₹32.10 lakhs, with an IRR of 5.79% as per the Reliance Nippon Life Milestone Plan maturity calculator, still below the interest rates offered by bank fixed deposits.
The Reliance Nippon Life Milestone plan offers benefits either at maturity or upon death, with a long-term commitment of 20 years.
However, the rate of return may not keep pace with inflation, making it challenging to meet the increasing costs of future financial goals. Additionally, the life coverage provided by the plan is insufficient.
Considering the modest returns and low life coverage, the Reliance Nippon Life Milestone Plan may fall short in helping you accumulate the necessary corpus to meet your long-term goals.
Reliance Nippon Life Milestone Plan Vs. Other Investments
Instead of investing in the Reliance Nippon Life Milestone Plan, the same premium could be allocated more effectively to achieve better returns.
Since the plan combines life coverage with investment, separating these components could lead to more favourable outcomes. Let’s consider the following scenario using the same premium as before.
Reliance Nippon Life Milestone Plan Vs. Pure-term + PPF / ELSS
A pure-term life insurance policy with a sum assured of ₹13 lakhs can be secured with an annual premium of ₹16,000 for a 20-year term and a 10-year premium payment period.
This leaves ₹84,000 each year, which can be invested according to your risk profile. For the first 10 years, after paying the insurance premium, the remaining amount is invested, and for the next 5 years, the full premium amount is dedicated to investments.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 13,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 16,000 |
| Investment | ₹ 84,000 |
Low-risk investors could choose debt instruments like the Public Provident Fund (PPF), while higher-risk investors might prefer equity-based options, such as Equity-Linked Savings Schemes (ELSS). In this comparison, we will explore both asset classes.
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 40 | 1 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 41 | 2 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 42 | 3 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 43 | 4 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 44 | 5 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 45 | 6 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 46 | 7 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 47 | 8 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 48 | 9 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 49 | 10 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 50 | 11 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 51 | 12 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 52 | 13 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 53 | 14 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 54 | 15 | -1,00,000 | 13,00,000 | -1,00,000 | 13,00,000 |
| 55 | 16 | 0 | 13,00,000 | 0 | 13,00,000 |
| 56 | 17 | 0 | 13,00,000 | 0 | 13,00,000 |
| 57 | 18 | 0 | 13,00,000 | 0 | 13,00,000 |
| 58 | 19 | 0 | 13,00,000 | 0 | 13,00,000 |
| 59 | 20 | 0 | 13,00,000 | 0 | 13,00,000 |
| 60 | 33,49,387 | 57,04,567 | |||
| IRR | 6.11% | 10.10% | |||
By the end of the policy term, the PPF account is projected to grow to ₹33.49 lakhs, delivering an IRR of 6.11%.
Meanwhile, the pre-tax maturity value of the ELSS fund is ₹63.81 lakhs, and after accounting for capital gains tax, the post-tax maturity value comes to ₹57.04 lakhs, with a post-tax IRR of 10.10%.
| ELSS Tax Calculation | |
| Maturity value after 20 years | 63,81,648 |
| Purchase price | 8,40,000 |
| Long-Term Capital Gains | 55,41,648 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 54,16,648 |
| Tax paid on LTCG | 6,77,081 |
| Maturity value after tax | 57,04,567 |
In both cases, the returns significantly outpace inflation, and these strategies also offer better liquidity, allowing you to withdraw funds when needed.
In comparison, the Reliance Nippon Life Milestone Plan offers poor returns, lacks liquidity, and provides insufficient life cover, making it unsuitable as both an insurance and investment option.
Final Verdict on Reliance Nippon Life Milestone Plan
The Reliance Nippon Life Milestone Plan aims to help you save for life goals while offering life coverage throughout the policy term.
However, the corpus accumulated through this plan is unlikely to be sufficient for achieving your goals, as its returns tend to fall below the rate of inflation
The Reliance Nippon Life Milestone plan’s benefits are non-guaranteed and are payable either at death or maturity and the sum assured is often inadequate to fully protect a family.
With limited life coverage and relatively low returns, the Reliance Nippon Life Milestone Plan is not ideal for those seeking to build long-term wealth and also has a high agent commission.
It’s essential to secure your family with sufficient life insurance to protect them from uncertainties and Pure-term policies are ideal for the same. For investments, you should choose options based on your risk tolerance, life goals, and time horizon, ensuring they align with your financial objectives.
When it comes to financial advice, are Quora, Facebook, and Twitter the final word?
Remember, combining insurance and investment is seldom effective. If you need assistance selecting the right products, it’s advisable to consult a Certified Financial Planner who can provide expert guidance tailored to your needs.
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