reliance nippon life super endowment plan
Can the Reliance Life Insurance Super Endowment Plan secure your future by offering guaranteed returns?
Can the Reliance Life Insurance Super Endowment Plan provide life cover and maturity benefits?
Can the Reliance Life Insurance Super Endowment Plan offer financial security and a guaranteed corpus at the end of the term?
In this article, we’ll take a closer look at the features, benefits, drawbacks, and returns of the RNL Super Endowment Plan. By analyzing its Internal Rate of Return (IRR), we’ll provide key insights to help you assess whether this plan can help you reach your financial goals.
What is the RNL Super Endowment Plan?
What are the features of the RNL Super Endowment Plan?
Who is eligible for the RNL Super Endowment Plan?
What are the benefits of the RNL Super Endowment Plan?
Grace period, Discontinuance and Revival of RNL Super Endowment Plan
Free Look Period for RNL Super Endowment Plan
Surrendering RNL Super Endowment Plan
What are the advantages of the RNL Super Endowment Plan?
What are the disadvantages of the RNL Super Endowment Plan?
Research Methodology of RNL Super Endowment Plan
Benefit Illustration – IRR Analysis of RNL Super Endowment Plan
RNL Super Endowment Plan Vs. Other Investments
RNL Super Endowment Plan Vs. Pure-term + PPF / ELSS
Final Verdict on RNL Super Endowment Plan
Reliance Life Insurance Super Endowment Plan is a non-linked non-participating endowment plan. Reliance Life Insurance Super Endowment Plan has been designed to ensure that you can save for your future along with the benefit of life cover and provide protection to your family.
| Minimum | Maximum | |
| Age at entry | 8 years | 60 years |
| Age at maturity | 22 years | 75 years |
| Policy term | 14/20 years | |
| Premium paying term | 7/10years | |
| Minimum Sum Assured | ₹ 1,00,000 | No limit |
In case of unfortunate death of the life assured before the maturity date, the basic sum assured is payable to the nominee, provided the policy is in force and all due premiums have been paid. The Reliance Life Insurance Super Endowment Plan policy terminates on payment of death benefit.
On survival of the life assured for the entire policy term, the basic sum assured is payable, provided the policy is in force and all due premiums have been paid. The Reliance Life Insurance Super Endowment Plan policy terminates on payment of maturity benefit.
There is a grace period of 30 days from the due date for payment of regular premiums. In the case of monthly mode, the grace period is 15 days.
The policy shall acquire a surrender value on payment of:
For Policy Term 14 years: At least two full years’ premium
For Policy Term 20 years: At least three full years’ premium
If you discontinue the payment of premiums before your policy has acquired a surrender value, the Reliance Life Insurance Super Endowment Plan policy shall lapse at the end of the grace period.
Once a policy has acquired a surrender value and if the policyholder chooses to discontinue the premium payment, the Reliance Life Insurance Super Endowment Plan policy will continue as a paid-up (or reduced paid-up) policy with reduced benefits.
A policy in lapsed or paid-up condition may be revived by the 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.
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).
The Reliance Life Insurance Super Endowment Plan policy shall acquire a surrender value on payment of:
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
The Reliance Nippon Life Super Endowment Plan offers a sum assured payable either on death or at maturity, with no loyalty additions or bonuses.
While the benefit is guaranteed, as you receive the sum assured in both cases, it’s important to evaluate the returns if you view this as an investment. Calculating the Internal Rate of Return (IRR) helps compare this plan with other investment options.
For instance, a 35-year-old male opts for the Reliance Nippon Life Super Endowment Plan with a sum assured of ₹10 lakhs. The policy term is 20 years, and the premium payment term is 10 years, requiring an annual premium of ₹53,270.
At maturity, the policyholder receives ₹10 lakhs, which translates to an IRR of 4.10% as per the Reliance Life Insurance Super Endowment Plan maturity calculator, a rate significantly lower than most debt instruments.
| Male | 35 years |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 53,270 |
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -53,270 | 10,00,000 |
| 36 | 2 | -53,270 | 10,00,000 |
| 37 | 3 | -53,270 | 10,00,000 |
| 38 | 4 | -53,270 | 10,00,000 |
| 39 | 5 | -53,270 | 10,00,000 |
| 40 | 6 | -53,270 | 10,00,000 |
| 41 | 7 | -53,270 | 10,00,000 |
| 42 | 8 | -53,270 | 10,00,000 |
| 43 | 9 | -53,270 | 10,00,000 |
| 44 | 10 | -53,270 | 10,00,000 |
| 45 | 11 | 0 | 10,00,000 |
| 46 | 12 | 0 | 10,00,000 |
| 47 | 13 | 0 | 10,00,000 |
| 48 | 14 | 0 | 10,00,000 |
| 49 | 15 | 0 | 10,00,000 |
| 50 | 16 | 0 | 10,00,000 |
| 51 | 17 | 0 | 10,00,000 |
| 52 | 18 | 0 | 10,00,000 |
| 53 | 19 | 0 | 10,00,000 |
| 54 | 20 | 0 | 10,00,000 |
| 55 | 10,00,000 | ||
| IRR | 4.10% |
In fact, investing this premium in a recurring deposit would yield a larger corpus. Although the plan guarantees the sum assured, its value diminishes over time due to inflation eroding purchasing power.
From an insurance standpoint, the sum assured is insufficient to meet a family’s future financial needs. As an investment, the returns are below the rate of inflation. Therefore, the Reliance Nippon Life Super Endowment Plan fails to offer substantial benefits, either as insurance or as an investment.
Analyzing the IRR of the Reliance Nippon Life Super Endowment Plan shows that its maturity benefit is insufficient to meet your life goals.
Combining insurance with investment in a single product often leads to lower returns. Instead, let’s explore a strategy where insurance and investment are handled through separate products, which can result in higher yields.
By opting for a pure-term life insurance policy with a sum assured of ₹10 lakhs, the annual premium for a 20-year term with a 10-year payment period comes to ₹8,700. This leaves ₹44,570 each year, 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 | ₹ 8,700 |
| Investment | ₹ 44,570 |
Low-risk investors might choose debt instruments like the Public Provident Fund (PPF), while those comfortable with higher risks could consider equity-based options, such as Equity-Linked Savings Schemes (ELSS). Let’s compare both asset classes.
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 35 | 1 | -53,270 | 10,00,000 | -53,270 | 10,00,000 |
| 36 | 2 | -53,270 | 10,00,000 | -53,270 | 10,00,000 |
| 37 | 3 | -53,270 | 10,00,000 | -53,270 | 10,00,000 |
| 38 | 4 | -53,270 | 10,00,000 | -53,270 | 10,00,000 |
| 39 | 5 | -53,270 | 10,00,000 | -53,270 | 10,00,000 |
| 40 | 6 | -53,270 | 10,00,000 | -53,270 | 10,00,000 |
| 41 | 7 | -53,270 | 10,00,000 | -53,270 | 10,00,000 |
| 42 | 8 | -53,270 | 10,00,000 | -53,270 | 10,00,000 |
| 43 | 9 | -53,270 | 10,00,000 | -53,270 | 10,00,000 |
| 44 | 10 | -50,770 | 10,00,000 | -53,270 | 10,00,000 |
| 45 | 11 | -500 | 10,00,000 | 0 | 10,00,000 |
| 46 | 12 | -500 | 10,00,000 | 0 | 10,00,000 |
| 47 | 13 | -500 | 10,00,000 | 0 | 10,00,000 |
| 48 | 14 | -500 | 10,00,000 | 0 | 10,00,000 |
| 49 | 15 | -500 | 10,00,000 | 0 | 10,00,000 |
| 50 | 16 | 0 | 10,00,000 | 0 | 10,00,000 |
| 51 | 17 | 0 | 10,00,000 | 0 | 10,00,000 |
| 52 | 18 | 0 | 10,00,000 | 0 | 10,00,000 |
| 53 | 19 | 0 | 10,00,000 | 0 | 10,00,000 |
| 54 | 20 | 0 | 10,00,000 | 0 | 10,00,000 |
| 55 | 13,14,787 | 24,51,983 | |||
| IRR | 5.91% | 10.08% | |||
A minimum contribution of ₹500 per annum for 15 years is required for the PPF account. So, adjustments are made in the last few years’ contributions. In this case, PPF is projected to grow to ₹13.14 lakhs by the end of the policy term, offering an IRR of 5.91%.
| ELSS Tax Calculation | |
| Maturity value after 20 years | 27,20,738 |
| Purchase price | 4,45,700 |
| Long-Term Capital Gains | 22,75,038 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 21,50,038 |
| Tax paid on LTCG | 2,68,755 |
| Maturity value after tax | 24,51,983 |
For the ELSS option, the pre-tax maturity value is ₹27.20 lakhs. After factoring in capital gains tax, the post-tax maturity value stands at ₹24.51 lakhs, delivering a post-tax IRR of 10.08%.
This alternative approach clearly provides better returns than the RNL Super Endowment Plan, giving you a larger corpus to help achieve your financial goals.
In the Reliance Nippon Life Super Endowment Plan, premiums are paid for only half of the selected policy term, with the basic sum assured paid at maturity and death cover provided throughout the term.
However, the policy term and premium payment period are fixed, offering no flexibility to suit your needs or convenience and also it has a high agent commission.
The RNL Super Endowment Plan is a simple endowment plan with no loyalty additions or bonuses. While the sum assured is guaranteed, there are no additional benefits, and the plan delivers low returns.
Furthermore, the sum assured may not be sufficient, making it less attractive to investors.
Adequate life insurance is crucial for protecting your family, and a pure-term life insurance policy is a better fit for this purpose, offering high coverage at an affordable premium.
For investments, it’s important to select products based on your risk tolerance, financial goals, and time horizon.
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Building a diversified investment portfolio can help you navigate your financial journey smoothly. If you’re unsure which products are right for you, it’s wise to consult a Certified Financial Planner who can offer expert advice tailored to your needs and help you plan for a bright financial future.
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