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Can the Reliance Nippon Life Nishchit Bhavishya Plan help you achieve your goals while protecting your family from unforeseen events?
Can the Reliance Nippon Life Nishchit Bhavishya Plan ensure financial protection for your loved ones?
Can the Reliance Nippon Life Nishchit Bhavishya Plan guarantee financial stability for the future?
In this review, we will thoroughly analyze the plan’s features, benefits, drawbacks, and potential returns, supported by detailed calculations.
Table of Contents:
What is the RNL Nischit Bhavishya Plan?
What are the features of the RNL Bhavishya Plan?
Who is eligible for the RNL Bhavishya Plan?
What are the plan variants in the RNL Nishchit Bhavishya Plan?
What are the benefits of the RNL Nischit Bhavishya Plan?
Grace period, Discontinuance and Revival of RNL Nishchit Bhavishya Plan
Free Look Period for RNL Nishchit Bhavishya Plan
Surrendering RNL Nishchit Bhavishya Plan
What are the advantages of the RNL Nishchit Bhavishya Plan?
What are the disadvantages of the RNL Nishchit Bhavishya Plan?
Research Methodology of RNL Nishchit Bhavishya Plan
Benefit Illustration – IRR Analysis of RNL Nishchit Bhavishya Plan
RNL Nishchit Bhavishya Plan Vs. Other investments
RNL Nishchit Bhavishya Plan Vs. Pure-term + ELSS
Final verdict on RNL Nischit Bhavishya Plan
What is the RNL Nischit Bhavishya Plan?
Reliance Nippon Life Nishchit Bhavishya Plan is a Non-Linked Non-Participating Individual Savings Life Insurance Plan. Reliance Nippon Life Nishchit Bhavishya Plan is a comprehensive plan that provides life insurance coverage to provide financial protection to your family and also gives you guaranteed benefits that ensure your financial needs and goals are taken care of.
What are the features of the RNL Bhavishya Plan?
- Choice of two plan variants to suit your needs
- Flexibility to pay for a limited period of 8, 10 or 12 years and enjoy benefits for the entire Reliance Nippon Life Nishchit Bhavishya Plan policy term
- High death cover during the premium payment term
- Increasing Benefits to balance the increasing cost of living
Who is eligible for the RNL Bhavishya Plan?
| Minimum age at entry | 5 years | |||||
| Maximum age at entry | 50 years | |||||
| Premium paying term | 8 years | 10 years | 12 years | |||
| Policy term | 24 years | 28 years | 30 years | 35 years | 36 years | 42 years |
| Maximum age at maturity | 74 years | 78 years | 80 years | 85 years | 86 years | 92 years |
| Minimum premium | ₹ 34,500 | |||||
| Maximum premium | No Limit | |||||
| Premium payment frequency | Yearly, Half-yearly, Quarterly, Monthly | |||||
What are the plan variants in the RNL Nishchit Bhavishya Plan?
Variant 1: This variant provides income benefit post premium payment term along with a lump sum maturity benefit.
Variant 2: This variant provides two money-back payouts at the 4th and 8th year before the income benefit starts from the 12th year and a lumpsum benefit is also paid at maturity
What are the benefits of the RNL Nischit Bhavishya Plan?
1.) Death benefit
During Premium Payment Term:
In case of unfortunate death of the Life Assured, the Claimant(s) shall receive higher of:
- Sum Assured on Death; and
- 120% of the Total Premiums Paid as of the date of death of the Life Assured
Where Sum Assured on Death is higher than:
- 11 times the Annualized Premium and
- 2 times of Base Sum Assured
Post Premium Payment Term:
In case of unfortunate death of the Life Assured, the Claimant(s) shall receive higher of:
- Sum Assured on Death; and
- 120% of the Total Premiums Paid as on the date of death of the Life Assured; and
- Base Sum Assured Plus Fixed Loyalty Addition, if any
Where Sum Assured on Death is higher than:
- 11 times the Annualized Premium and
- Base Sum Assured
2.) Survival benefit
Variant 1 (Income benefit)
On survival of the Life Assured, Income Benefit shall be payable at the end of each policy year starting after the Premium Payment Term till one year before the end of the Reliance Nippon Life Nishchit Bhavishya Plan Policy Term.
The Income Benefit shall be a percentage of Annualized Premium, increasing at a simple rate of 5% per annum.
Variant 2 (money back and Income benefit)
On survival of the Life Assured, Money Back benefit, as a percentage of Annualized Premium, shall be payable at the end of the 4th (75% of annualised premium) and 8th (125% annualised premium) Policy Year.
On survival of the Life Assured, Income Benefit shall be payable at the end of each policy year starting from the end of the 12th policy year till one year before the end of the Reliance Nippon Life Nishchit Bhavishya Plan Policy Term.
The Income Benefit shall be a percentage of the Annualized Premium, increasing at a simple rate of 5% per annum.
3.) Maturity Benefit
On survival of the life assured till the end of the Reliance Nippon Life Nishchit Bhavishya Plan policy term, Sum Assured on Maturity plus Fixed Loyalty Addition, if any, shall be payable.
Where Sum Assured on Maturity is equal to Base Sum Assured.
Fixed Loyalty Addition: For 8-pay, 10-pay, and 12-pay options, it is 20%, 25%, and 30% of the Base Sum Assured, respectively.
Grace period, Discontinuance and Revival of RNL Nishchit Bhavishya Plan
Grace period
A grace period of 30 days (15 days for monthly mode) will be given to pay your premium.
Discontinuance
If all due premiums have not been paid for the first two consecutive policy years in full, the Reliance Nippon Life Nishchit Bhavishya 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.
Revival
A Reliance Nippon Life Nishchit Bhavishya 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 Nishchit Bhavishya 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 where the policy has been obtained through other than distance marketing (30 days of receipt where the policy has been obtained through Distance Marketing mode).
Surrendering RNL Nishchit Bhavishya Plan
The Reliance Nippon Life Nishchit Bhavishya Plan policy shall acquire a Surrender Value if all due premiums have been paid for the first two consecutive policy years in full.
The total Surrender Value payable during the Policy Term is higher than Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV)] plus the outstanding balance in Flexi Wallet, if any.
What are the advantages of the RNL Nishchit Bhavishya Plan?
- A loan facility is available under the Reliance Nippon Life Nishchit Bhavishya Plan policy, up to 70% of the surrender value.
- Riders can be added to boost your coverage.
- Tax Benefits as per the prevailing tax laws
What are the disadvantages of the RNL Nishchit Bhavishya Plan?
- Survival benefits often get spent on discretionary expenses.
- The product offers relatively low returns.
- Annual withdrawals from survival benefits interrupt the compounding effect.
- Once a plan variant is chosen, it cannot be changed during the policy term.
- There is no option to defer or accumulate the survival benefits.
- The sum assured decreases during the income payout period.
Research Methodology of RNL Nishchit Bhavishya Plan
The RNL Nishchit Bhavishya Plan offers flexibility with regular, increasing income and money-back benefits. However, it’s important to ensure that the returns justify the investment. Let’s calculate the Internal Rate of Return (IRR) using the data from the policy brochure.
Benefit Illustration – IRR Analysis of RNL Nishchit Bhavishya Plan
A 35-year-old male opts for the RNL Nishchit Bhavishya Plan under variant 1 with a base sum assured of ₹7.85 lakhs. The premium payment term is 10 years, with an income period of 20 years, resulting in a total policy term of 30 years. The annual premium is ₹75,000.
| Male | 35 years |
| Sum Assured | ₹ 7,85,423 |
| Policy Term | 30 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 75,000 |
After completing the premium payment term, he begins receiving survival benefits, starting with an income of ₹37,500, which increases at a simple rate of 5% annually.
The final maturity benefit is ₹9.81 lakhs. The IRR for this cash flow is calculated at 5.02% as per the Reliance Nippon Life Nishchit Bhavishya Plan maturity calculator.
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -75,000 | 15,70,846 |
| 36 | 2 | -75,000 | 15,70,846 |
| 37 | 3 | -75,000 | 15,70,846 |
| 38 | 4 | -75,000 | 15,70,846 |
| 39 | 5 | -75,000 | 15,70,846 |
| 40 | 6 | -75,000 | 15,70,846 |
| 41 | 7 | -75,000 | 15,70,846 |
| 42 | 8 | -75,000 | 15,70,846 |
| 43 | 9 | -75,000 | 15,70,846 |
| 44 | 10 | -75,000 | 15,70,846 |
| 45 | 11 | 0 | 9,81,779 |
| 46 | 12 | 37,500 | 9,81,779 |
| 47 | 13 | 39,375 | 9,81,779 |
| 48 | 14 | 41,250 | 9,81,779 |
| 49 | 15 | 43,125 | 9,81,779 |
| 50 | 16 | 45,000 | 9,81,779 |
| 51 | 17 | 46,875 | 9,81,779 |
| 52 | 18 | 48,750 | 9,81,779 |
| 53 | 19 | 50,625 | 9,81,779 |
| 54 | 20 | 52,500 | 9,81,779 |
| 55 | 21 | 54,375 | 9,81,779 |
| 56 | 22 | 56,250 | 9,81,779 |
| 57 | 23 | 58,125 | 9,81,779 |
| 58 | 24 | 60,000 | 9,81,779 |
| 59 | 25 | 61,875 | 9,81,779 |
| 60 | 26 | 63,750 | 9,81,779 |
| 61 | 27 | 65,625 | 9,81,779 |
| 62 | 28 | 67,500 | 9,81,779 |
| 63 | 29 | 69,375 | 9,81,779 |
| 64 | 30 | 71,250 | 9,81,779 |
| 65 | 9,81,779 | ||
| IRR | 5.02% |
This return is lower than what typical debt instruments offer and is uncompetitive for such a long-term investment, especially when factoring in inflation. Given the 30-year policy term, the returns are insufficient to build the corpus needed to meet long-term financial goals.
Additionally, the sum assured is inadequate to provide meaningful financial support for a family. While the plan guarantees benefits, the returns are not compelling enough, making the RNL Nishchit Bhavishya Plan a less attractive investment option.
RNL Nishchit Bhavishya Plan Vs. Other investments
A standalone analysis of the RNL Nishchit Bhavishya Plan reveals it as a low-yielding product. To make an informed decision, we’ll now compare its returns with other investment options.
For this comparison, we’ll separate the insurance and investment components, using the same metrics as before.
RNL Nishchit Bhavishya Plan Vs. Pure-term + ELSS
In this scenario, a pure-term life insurance policy with a sum assured of ₹16 lakhs has an annual premium of ₹20,700 for a 30-year term with a 10-year premium payment period. This leaves ₹54,300 each year available for investment, which can be allocated according to your risk tolerance.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 7,85,423 |
| Policy Term | 30 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 20,700 |
| Investment | ₹ 54,300 |
Low-risk investors might choose debt instruments like the Public Provident Fund (PPF), while high-risk investors could opt for equity-based options like Equity-Linked Savings Schemes (ELSS). For this comparison, we’ll use an ELSS fund.
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 35 | 1 | -75,000 | 16,00,000 |
| 36 | 2 | -75,000 | 16,00,000 |
| 37 | 3 | -75,000 | 16,00,000 |
| 38 | 4 | -75,000 | 16,00,000 |
| 39 | 5 | -75,000 | 16,00,000 |
| 40 | 6 | -75,000 | 16,00,000 |
| 41 | 7 | -75,000 | 16,00,000 |
| 42 | 8 | -75,000 | 16,00,000 |
| 43 | 9 | -75,000 | 16,00,000 |
| 44 | 10 | -75,000 | 16,00,000 |
| 45 | 11 | 0 | 16,00,000 |
| 46 | 12 | 37,500 | 16,00,000 |
| 47 | 13 | 39,375 | 16,00,000 |
| 48 | 14 | 41,250 | 16,00,000 |
| 49 | 15 | 43,125 | 16,00,000 |
| 50 | 16 | 45,000 | 16,00,000 |
| 51 | 17 | 46,875 | 16,00,000 |
| 52 | 18 | 48,750 | 16,00,000 |
| 53 | 19 | 50,625 | 16,00,000 |
| 54 | 20 | 52,500 | 16,00,000 |
| 55 | 21 | 54,375 | 16,00,000 |
| 56 | 22 | 56,250 | 16,00,000 |
| 57 | 23 | 58,125 | 16,00,000 |
| 58 | 24 | 60,000 | 16,00,000 |
| 59 | 25 | 61,875 | 16,00,000 |
| 60 | 26 | 63,750 | 16,00,000 |
| 61 | 27 | 65,625 | 16,00,000 |
| 62 | 28 | 67,500 | 16,00,000 |
| 63 | 29 | 69,375 | 16,00,000 |
| 64 | 30 | 71,250 | 16,00,000 |
| 65 | 20,57,917 | ||
| IRR | 6.75% |
By the end of the term, the ELSS fund would accumulate ₹11.95 lakhs (pre-tax). After accounting for capital gains tax, the post-tax value is ₹11.29 lakhs.
This amount is then reinvested in a product offering 7% returns, allowing for annual withdrawals similar to the RNL Nishchit Bhavishya Plan. At the end of the term, the full investment is withdrawn to match the maturity benefit of the RNL Nishchit Bhavishya Plan.
The final maturity value in this alternative approach comes to ₹20.57 lakhs, nearly double the maturity value provided by the RNL Nishchit Bhavishya Plan.
| ELSS Tax Calculation | |
| Maturity value after 11 years | 11,95,313 |
| Purchase price | 5,43,000 |
| Long-Term Capital Gains | 6,52,313 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 5,27,313 |
| Tax paid on LTCG | 65,914 |
| Maturity value after tax | 11,29,399 |
The IRR in this scenario is 6.75%. If you opt not to make annual withdrawals, the returns could be even higher. Additionally, it’s important to note that the sum assured remains constant throughout the policy term, unlike the RNL Nishchit Bhavishya Plan.
This rate is aligned with inflation but highlights the flexibility and liquidity of the investment. You have the freedom to withdraw based on personal needs or reinvest based on the interest rate outlook. This level of flexibility and liquidity is lacking in the RNL Nishchit Bhavishya Plan.
Final verdict on RNL Nischit Bhavishya Plan
In the RNL Nishchit Bhavishya Plan, you pay premiums for a limited period and receive life coverage, along with income and money-back benefits at regular intervals. However, unlike other endowment plans, the death benefit is reduced after the premium-paying term ends.
Given that the death benefit is already low, further reducing it diminishes the value of the life cover.
Additionally, there is no option to defer or accumulate the survival benefits, meaning the income payout may not align with your actual needs, potentially leading to unnecessary spending. The returns are also relatively low for such a long-term investment.
The combination of reduced life cover, a rigid payout structure, and poor returns makes the RNL Nishchit Bhavishya Plan unsuitable for both insurance and investment purposes and also it has a high agent commission.
To secure your family’s future, consider a pure-term life insurance policy with adequate coverage, which is available at affordable premiums.
For achieving life goals, invest in a diversified portfolio based on your risk tolerance and time horizon. It’s crucial to keep insurance and investment separate.
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