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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.
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?
What are the benefits of the RNL Super Moneyback Plan?
3. Guaranteed Loyalty Additions
4. Guaranteed Maturity Addition
Grace period, Discontinuance and Revival of RNL Super Moneyback Plan
Free Look Period for RNL Super Moneyback Plan
Surrendering RNL Super Moneyback Plan
What are the advantages of the RNL Super Moneyback Plan?
What are the disadvantages of the RNL Super Moneyback Plan?
Research Methodology of RNL Super Moneyback Plan
Benefit Illustration – IRR Analysis of the RNL Super Moneyback Plan
RNL Super Moneyback Plan Vs. Other Investments
RNL Super Moneyback Plan Vs. Pure-term + ELSS
Final Verdict on RNL Super Moneyback Plan
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:
|
The highest of the following amounts is payable:
|
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.
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