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

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Can the Reliance Nippon Life Super Moneyback Plan offer you the perfect blend of savings and protection for your future financial needs?

Can the Reliance Nippon Life Super Moneyback Plan help you secure periodic payouts while ensuring your family’s financial stability?

Can the Reliance Nippon Life Super Moneyback Plan be your go-to solution for meeting both short-term needs and long-term goals effortlessly?

This comprehensive review will explore the features, benefits, drawbacks, and returns of the RNL Super Moneyback Plan, giving you the necessary insights into how it works.

What is the RNL Super Moneyback Plan?

Reliance Nippon Life Super Money Back Plan is a non-linked, non-participating, non-variable, money-back insurance plan.

Reliance Nippon Life Super Moneyback Planhelps you provide a regular income and security for your family. The guaranteed monthly income increases every year while you receive the guaranteed periodic lump sums.

What are the features of the RNL Super Moneyback Plan?

Select amongst Policy Terms of 10/20/30/40/50 years and pay for half of the Policy Term
Get the benefit of life insurance protection during the entire Policy Term
Choose to pay premiums yearly, half-yearly, quarterly or monthly
Guaranteed Loyalty Addition, payable at the end of the Premium Payment Term
Guaranteed Maturity Addition, payable at the end of the Policy Term
Moneyback Benefits at the end of every five Policy years till maturity
Increasing Regular Monthly Payouts payable monthly at the end of the Premium Payment Term
Enjoy tax benefits on the premiums paid and benefits received, as per applicable income tax laws

Who is eligible for the RNL Super Moneyback Plan?

	Minimum	Maximum
Age at Entry	Death benefit Option A: 18 years Death benefit option B: 45 years	55 years
Age at Maturity	28 years	80 years
Sum Assured	₹ 1,00,000	No limit
Policy term	10/20/30/40/50 years
Premium payment term	Half of the selected policy term
Premium payment Mode	Yearly, Half-yearly, Quarterly and Monthly

What are the benefits of the RNL Super Moneyback Plan?

1.) Moneyback Benefits

Moneyback Benefits as a percentage of the Base Sum Assured will be paid at the end of every five Policy years till maturity, on survival of the Life Assured provided the Policy is in force. The Moneyback Benefits will be paid as per the table below:

End of policy year / Policy term	10 years	20 years	30 years	40 years	50 years
5	50.00%	25.00%	16.67%	12.50%	10.00%
10	50.00%	25.00%	16.67%	12.50%	10.00%
15	NA	25.00%	16.67%	12.50%	10.00%
20	NA	25.00%	16.67%	12.50%	10.00%
25	NA	NA	16.67%	12.50%	10.00%
30	NA	NA	16.67%	12.50%	10.00%
35	NA	NA	NA	12.50%	10.00%
40	NA	NA	NA	12.50%	10.00%
45	NA	NA	NA	NA	10.00%
50	NA	NA	NA	NA	10.00%

2.) Regular Monthly Payouts

Regular Monthly Payouts are 1% of Base Sum Assured for the first payout year and will increase by 0.25% at a simple rate in subsequent Policy years.

3.) Guaranteed Loyalty Additions

On survival of the Life Assured to the end of the premium payment term, the Guaranteed Loyalty Additions will be payable, provided all due premiums are paid and the Policy is in force.

Guaranteed Loyalty Additions = 1% of Sum Assured x Premium payment term

4.) Guaranteed Maturity Addition

On survival of the Life Assured to the end of the Reliance Nippon Life Super Moneyback Plan Policy Term, the Guaranteed Maturity Addition will be payable, provided the Policy is in force.

Guaranteed Maturity Addition = 1% of Sum Assured or Paid-up Sum Assured x Policy Term

5.) Death Benefit

In case of the unfortunate demise of the Life Assured during the Reliance Nippon Life Super Moneyback Plan Policy Term, the nominee shall receive the following benefits:

Option A

Option B

The highest of the following amounts is payable:

10 times the Annualised Premium or
105% of all the premiums paid (excluding extra premiums) as on the date of death or
Sum Assured

The highest of the following amounts is payable:

7 times the Annualised Premium or
105% of all the premiums paid (excluding the extra premiums) as on the date of death or
Sum Assured

Grace period, Discontinuance and Revival of RNL Super 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 Super Moneyback 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 Super Moneyback 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 Super Moneyback Plan

In the event you disagree with any of the Reliance Nippon Life Super Moneyback Plan 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 Super Moneyback 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 RNL Super Moneyback 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.

What are the disadvantages of the RNL Super Moneyback Plan?

The life cover provided is insufficient.
Taking the survival benefit annually may encourage unnecessary expenses.
The returns are comparatively low.
Early withdrawals interrupt the compounding effect on investments.

Research Methodology of RNL Super Moneyback Plan

The Reliance Nippon Life Super Moneyback Plan provides regular cash payouts after the premium payment term, along with lump sum benefits at regular intervals.

To better understand its cash flow pattern and estimate the returns, let’s analyze a quote and calculate the Internal Rate of Return (IRR).

Benefit Illustration – IRR Analysis of the RNL Super Moneyback Plan

A 30-year-old male chooses the Reliance Nippon Life Super Moneyback Plan with a policy term of 20 years, Death Benefit Option A, and a base sum assured of ₹10,00,000. He pays an annual premium of ₹2,42,500 for 10 years.

Male	30 years
Sum Assured	₹ 10,00,000 (Death benefit: ₹ 24.25 Lakhs)
Policy Term	20 years
Premium Paying Term	10 years
Annualised Premium	₹ 2,42,500

The benefits he receives are as follows:

- Moneyback payouts of ₹2,50,000 at the end of the 5th, 10th, 15th, and 20th policy years.
- Increasing monthly payouts starting at the end of the premium payment term, with a first-year payout of ₹1,20,000.
- A Guaranteed Loyalty Addition of ₹1 lakh at the end of the premium payment term.
- A Guaranteed Maturity Addition of ₹2 lakh at the end of the policy term.

Age	Year	Annualised premium / Maturity benefit	Death benefit
30	1	-2,42,500	24,25,000
31	2	-2,42,500	24,25,000
32	3	-2,42,500	24,25,000
33	4	-2,42,500	24,25,000
34	5	-2,42,500	24,25,000
35	6	7,500	24,25,000
36	7	-2,42,500	24,25,000
37	8	-2,42,500	24,25,000
38	9	-2,42,500	24,25,000
39	10	-2,42,500	24,25,000
40	11	3,50,000	24,25,000
41	12	1,20,000	24,25,000
42	13	1,50,000	24,25,000
43	14	1,80,000	24,25,000
44	15	2,10,000	24,25,000
45	16	4,90,000	24,25,000
46	17	2,70,000	24,25,000
47	18	3,00,000	24,25,000
48	19	3,30,000	24,25,000
49	20	3,60,000	24,25,000
50		8,40,000

	IRR	4.40%

The IRR for this cash flow is 4.40% as per the Reliance Nippon Life Super Moneyback Plan Maturity calculator. While the plan offers guaranteed and regular payouts, the returns are unsatisfactory for investors.

Additionally, the periodic payouts may not cover significant expenses and could lead to discretionary spending. The sum assured is also inadequate to meet the family’s future financial needs.

Given the poor return on investment and limited impact of regular payouts, the RNL Super Moneyback Plan does not effectively support achieving long-term life goals.

RNL Super Moneyback Plan Vs. Other Investments

Investing long-term with returns lower than the inflation rate undermines the purpose of saving. Therefore, let’s explore better alternatives to generate the same cash payouts offered by the RNL Super Moneyback Plan while separating insurance and investment.

RNL Super Moneyback Plan Vs. Pure-term + ELSS

A pure-term life insurance policy with a sum assured of ₹25 lakhs requires an annual premium of ₹15,500 for a 20-year term and a 10-year premium payment period. This leaves you with ₹2,27,000 per year, which can be invested according to your risk profile.

Pure Term Life Insurance Policy
Sum Assured	₹ 25,00,000
Policy Term	20 years
Premium Paying Term	10 years
Annualised Premium	₹ 15,500
Investment	₹ 2,27,000

Low-risk investors may choose debt instruments like the Public Provident Fund (PPF), while higher-risk investors could consider equity options such as Equity-Linked Savings Schemes (ELSS). For this scenario, we assume investment in an ELSS fund.

		Term insurance + ELSS
Age	Year	Term Insurance premium + ELSS	Death benefit
30	1	-2,42,500	25,00,000
31	2	-2,42,500	25,00,000
32	3	-2,42,500	25,00,000
33	4	-2,42,500	25,00,000
34	5	-2,42,500	25,00,000
35	6	7,500	25,00,000
36	7	-2,42,500	25,00,000
37	8	-2,42,500	25,00,000
38	9	-2,42,500	25,00,000
39	10	-2,42,500	25,00,000
40	11	3,50,000	25,00,000
41	12	1,20,000	25,00,000
42	13	1,50,000	25,00,000
43	14	1,80,000	25,00,000
44	15	2,10,000	25,00,000
45	16	4,90,000	25,00,000
46	17	2,70,000	25,00,000
47	18	3,00,000	25,00,000
48	19	3,30,000	25,00,000
49	20	3,60,000	25,00,000
50		35,32,484

	IRR	8.31%

To match the first payout, withdrawals are made from the ELSS fund. After 10 years, the ELSS fund balance is shifted to an instrument offering 7% annual returns.

This corpus can then be used for annual withdrawals, similar to the moneyback payouts of the RNL Super Moneyback Plan. The resulting post-tax IRR is 8.31%.

Maturity value after 10 years	40,21,004.98
Less
Purchase price	21,28,143.29
Long-term capital gains	18,92,861.70
Exemption limit	1,25,000.00
Taxable LTCG	17,67,861.70
Tax paid on LTCG	2,20,982.71
Maturity value after tax	38,00,022.27

For comparison, the withdrawals follow the same pattern as the RNL Super Moneyback Plan. However, if you avoid annual withdrawals, your returns will improve further.

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

Final Verdict on RNL Super Moneyback Plan

The Reliance Nippon Life Super Moneyback Plan offers regular, guaranteed cash payouts in two forms: lump sum benefits every 5 years and periodic income after the premium payment term ends. In addition to these payouts, the plan provides life coverage for the entire policy term.

While the cash flow pattern may seem appealing, the returns are less. So, this makes the plan less attractive as an investment option and it has a high agent commission.

Moreover, the sum assured is insufficient to meet future needs. As a long-term investment, the RNL Super Moneyback Plan falls short of fulfilling an investor’s expectations.

Moneyback plans often provide payouts that do not align with actual financial needs, making them less effective. Instead, it is better to select investment strategies that align with your specific goals.

You should build an investment portfolio based on your risk profile, life goals, and time horizon. However, securing adequate life insurance first is essential to safeguard your family from unforeseen risks.

Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?

For a well-rounded financial plan that addresses all your life goals, it’s advisable to consult a Certified Financial Planner. Their expertise can help you create a tailored plan that meets your unique requirements.

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

Table of Contents:

What is the RNL Super Moneyback Plan?

What are the features of the RNL Super Moneyback Plan?

Who is eligible for the RNL Super Moneyback Plan?