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Could the Shriram Life POS Assured Savings Plan be the right solution to help you meet these responsibilities?
Can the Shriram Life POS Assured Savings Plan secure your family’s future with guaranteed payouts and life cover?
Is the Shriram Life POS Assured Savings Plan the reliable choice for hassle-free savings with tax benefits?
In this review, we will explore the plan’s features, benefits, and drawbacks to help you understand its offerings and determine if it aligns with your financial needs.
Table of Contents:
What is the Shriram Life POS Assured Savings Plan?
What are the features of the Shriram Life POS Assured Savings Plan?
Who is eligible for the Shriram Life POS Assured Savings Plan?
What are the benefits of the Shriram Life POS Assured Savings Plan?
Grace Period, Lapsed and Paid-up Policy and Revival of Shriram Life POS Assured Savings Plan
Free Look Period for Shriram Life POS Assured Savings Plan
Surrendering Shriram Life POS Assured Savings Plan
What are the advantages of the Shriram Life POS Assured Savings Plan?
What are the disadvantages of the Shriram Life POS Assured Savings Plan?
Research Methodology of Shriram Life POS Assured Savings Plan
Benefit Illustration – IRR Analysis of Shriram Life POS Assured Savings Plan
Shriram Life POS Assured Savings Plan Vs. Other Investments
Shriram Life POS Assured Savings Plan Vs. Pure-term + ELSS
Final Verdict on Shriram Life POS Assured Savings Plan
What is the Shriram Life POS Assured Savings Plan?
Shriram Life POS Assured Savings Plan is a Non-linked Non-Participating Life Insurance Individual Savings Plan. Shriram Life POS Assured Savings Plan is a combination of insurance and savings, designed to help you build your savings while providing financial security for your family in your absence.
What are the features of the Shriram Life POS Assured Savings Plan?
- Guaranteed life cover and benefits disclosed upfront
- Double coverage for accidental death under Option 2
- Flexible policy and premium payment terms
- Life coverage available without medical tests
- Enhanced maturity benefits for higher premiums, up to 181%
Who is eligible for the Shriram Life POS Assured Savings Plan?
| Eligibility Criteria | Minimum | Maximum |
| Entry Age | 3 years | 55 years |
| Maturity Age | 18 years | 65 years |
| Policy term | 10 and 15 years | |
| Premium paying term | Regular – Equal to Policy Term Limited – For Policy Term of 10 years: 8 years For Policy Term of 15 years: 8, 10 years |
|
| Premium paying mode | Yearly / Half-Yearly / Quarterly / Monthly | |
| Minimum premium | Yearly – 5,000 Quarterly – 3,000 Half Yearly – 1,500 Monthly – 500 |
Yearly – 97,656 Quarterly – 49,647 Half Yearly – 25,040 Monthly – 8,392 |
| Basic Sum assured | ₹ 40,000 | Subject to maximum Death Sum Assured of Rs. 10,00,000 |
What are the benefits of the Shriram Life POS Assured Savings Plan?
Death benefit
| Option 1 | Option 2 | ||
| Death within the waiting period | Accidental Death | Death Sum assured | 2*Death Sum assured |
| Death due to other reasons | Total premiums paid till date | Total premiums paid till date | |
| Death after the waiting period but during the policy term | Accidental Death | Death Sum assured | 2*Death Sum assured |
| Death due to other reasons | Death Sum assured | Death Sum assured |
Option 1 (Life Cover):
The death benefit is equal to one “Death Sum Assured,” payable if the Shriram Life POS Assured Savings Plan policy is in force.
- In case of death of life assured due to an accident during the waiting period
- In case of death of life assured after the waiting period due to any reason other than an accident
In case of death of life assured during the waiting period due to other than an accident, the death benefit is equal to 100% of the Total Premiums Paid till date will be payable.
Option 2 (Life Cover with in-built accidental death cover):
In addition to the death benefit payable under Option 1 (Life Cover), an additional benefit which is equal to one more “Death Sum Assured” will be payable to the nominee(s), provided the policy is in force, in case of death of the life assured due to accident anytime during the policy time.
“Death Sum Assured” is defined as higher of
- 10 times the annualized premium if the age at entry is less than or equal to 45 years & 7 times the annualized premium if the age at entry is above 45 years
- 105% of the Total Premiums Paid till the date of death
- Surrender Value on the date of death
Maturity benefit
In case of survival of the life assured up to the end of the Shriram Life POS Assured Savings Plan policy term, provided the policy is in force, the Guaranteed Maturity Sum Assured will be payable immediately in a lump sum and the policy will be terminated.
Guaranteed Maturity Sum Assured = Maturity Benefit Factor * Basic Sum Assured
Basic Sum Assured = Premium Paying Term * Annualized premium
Grace Period, Lapsed and Paid-up Policy and Revival of Shriram Life POS Assured Savings Plan
Grace Period
A grace period of 30 days is allowed for payment of due premium for non-monthly modes and 15 days for monthly modes.
Lapsed and Paid-up Policy
During the first two Policy Years – In case the premium remains unpaid at the expiry of the Grace Period during the first two years, the Shriram Life POS Assured Savings Plan policy will lapse and no benefits will be paid.
After the first two Policy Years – In case the premium remains unpaid at the expiry of the Grace Period after the first two policy years, provided that the premiums of the first two years have been paid in full, the policy status will change to paid up.
This paid-up policy will then continue up to the expiry of the Policy Term or till the death of the Life Assured, whichever is earlier.
Revival
You can revive a lapsed or paid-up policy within a revival period of five years from the date of the first unpaid premium.
Free Look Period for Shriram Life POS Assured Savings Plan
If a policyholder disagrees with any of the Shriram Life POS Assured Savings Plan policy terms or conditions, or otherwise and has not made any claim, he shall have the option to return the policy within 15 days (30 days in case of policies obtained through distance marketing) from the date of receipt of the policy document.
Surrendering Shriram Life POS Assured Savings Plan
You have the option to surrender the Shriram Life POS Assured Savings Plan policy before its maturity after premiums have been paid for at least 2 years.
On surrendering the Shriram Life POS Assured Savings Plan policy, you will receive a Surrender Value, which is higher of the Special Surrender Value (SSV) and the Guaranteed Surrender Value (GSV).
What are the advantages of the Shriram Life POS Assured Savings Plan?
- Option 2 comes with a built-in accidental death benefit rider.
- Avail tax benefits under Sections 80C and 10(10D) of the Income Tax Act.
- Access loans against the policy of up to 80% of the surrender value.
- Guaranteed benefits provide reliable financial security.
What are the disadvantages of the Shriram Life POS Assured Savings Plan?
- The maximum sum assured under Shriram Life POS Assured Savings Plan is capped at ₹10 lakhs, which may be insufficient to meet a family’s essential financial needs.
- The returns offered by the Shriram Life POS Assured Savings Plan are relatively low.
- There are no loyalty additions for staying invested in the Shriram Life POS Assured Savings Plan .
Research Methodology of Shriram Life POS Assured Savings Plan
An ideal investment should deliver returns that surpass inflation over the long term. Returns calculation is crucial, especially for guaranteed benefit plans where the maturity amount is predetermined.
Let’s analyse the returns of the Shriram Life POS Assured Savings Plan using figures from the policy brochure.
Benefit Illustration – IRR Analysis of Shriram Life POS Assured Savings Plan
For instance, a 33-year-old male opts for this plan with a sum assured of ₹2.5 lakhs. He selects a premium payment term of 8 years and a policy term of 15 years, requiring an annual premium of ₹25,000.
| Male | 33 years |
| Sum Assured | ₹ 2,50,000 |
| Policy Term | 15 years |
| Premium Paying Term | 8 years |
| Annualised Premium | ₹ 25,000 |
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 33 | 1 | -25,000 | 2,50,000 |
| 34 | 2 | -25,000 | 2,50,000 |
| 35 | 3 | -25,000 | 2,50,000 |
| 36 | 4 | -25,000 | 2,50,000 |
| 37 | 5 | -25,000 | 2,50,000 |
| 38 | 6 | -25,000 | 2,50,000 |
| 39 | 7 | -25,000 | 2,50,000 |
| 40 | 8 | -25,000 | 2,50,000 |
| 41 | 9 | 0 | 2,50,000 |
| 42 | 10 | 0 | 2,50,000 |
| 43 | 11 | 0 | 2,50,000 |
| 44 | 12 | 0 | 2,50,000 |
| 45 | 13 | 0 | 2,50,000 |
| 46 | 14 | 0 | 2,50,000 |
| 47 | 15 | 0 | 2,50,000 |
| 48 | 3,57,000 | 2,50,000 | |
| IRR | 5.11% |
At the end of the Shriram Life POS Assured Savings Plan policy term, the Guaranteed Maturity Sum Assured of ₹3.57 lakhs is paid as the maturity benefit. This results in an Internal Rate of Return (IRR) of 5.11% as per the Shriram Life POS Assured Savings Plan’s Maturity Calculator.
While the maturity benefit is guaranteed, the return rate is relatively low for a long-term investment. Such modest returns can make it challenging to build significant wealth.
Additionally, the Shriram Life POS Assured Savings Plan maximum sum assured is limited to ₹10 lakhs, which may fall short as a financial safety net.
Thus, the Shriram Life POS Assured Savings Plan may not provide a sufficient corpus or adequate coverage to effectively meet your financial responsibilities.
Shriram Life POS Assured Savings Plan Vs. Other Investments
While the Shriram Life POS Assured Savings Plan combines life cover and investment, neither component effectively serves an investor’s needs. Separating these elements allows for a clearer evaluation of the plan’s value and a better understanding of potential returns.
Shriram Life POS Assured Savings Plan Vs. Pure-term + ELSS
The previous illustration of Shriram Life POS Assured Savings Plan offers a life cover of ₹2.5 lakhs, which is insufficient. According to IRDAI guidelines, the minimum sum assured for a pure-term policy is ₹5 lakhs. Based on this, we analysed a scenario with a ₹5 lakh life cover.
A pure-term life insurance policy with a sum assured of ₹5 lakhs costs an annual premium of ₹4,800 for a 15-year policy term and a 5-year premium payment term. In the original example, the premium payment term is 8 years.
In the initial 5 years, you can allocate the remaining ₹20,200 annually toward long-term investments and in the following 3 years ₹ 25,000 is utilised for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 5,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 5 years |
| Annualised Premium | ₹ 4,800 |
| Investment | ₹ 20,200 |
Depending on your risk profile, you can invest in debt or equity instruments. For this analysis, we selected the Equity-Linked Savings Scheme (ELSS) option.
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 33 | 1 | -25,000 | 2,50,000 |
| 34 | 2 | -25,000 | 2,50,000 |
| 35 | 3 | -25,000 | 2,50,000 |
| 36 | 4 | -25,000 | 2,50,000 |
| 37 | 5 | -25,000 | 2,50,000 |
| 38 | 6 | -25,000 | 2,50,000 |
| 39 | 7 | -25,000 | 2,50,000 |
| 40 | 8 | -25,000 | 2,50,000 |
| 41 | 9 | 0 | 2,50,000 |
| 42 | 10 | 0 | 2,50,000 |
| 43 | 11 | 0 | 2,50,000 |
| 44 | 12 | 0 | 2,50,000 |
| 45 | 13 | 0 | 2,50,000 |
| 46 | 14 | 0 | 2,50,000 |
| 47 | 15 | 0 | 2,50,000 |
| 48 | 6,10,983 | 2,50,000 | |
| IRR | 9.97% | ||
The maturity value after 15 years is ₹6.55 lakhs. After deducting capital gains tax, the post-tax maturity value stands at ₹6.10 lakhs, yielding a combined IRR of 9.97% (post-tax).
| ELSS Tax Calculation | |
| Maturity value after 15 years | 6,55,266 |
| Purchase price | 1,76,000 |
| Long-Term Capital Gains | 4,79,266 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 3,54,266 |
| Tax paid on LTCG | 44,283 |
| Maturity value after tax | 6,10,983 |
This comparison demonstrates that separating insurance and investments provides significantly higher returns. In contrast, the Shriram Life POS Assured Savings Plan offers inadequate life insurance coverage and fails to deliver competitive investment returns.
Final Verdict on Shriram Life POS Assured Savings Plan
The Shriram Life POS Assured Savings Plan is a traditional endowment policy where you pay premiums to receive guaranteed benefits at maturity along with life coverage. However, this plan neither provides adequate life cover nor offers competitive returns on investment.
For long-term investors, the primary goal should be to achieve returns that outpace inflation, ensuring sufficient funds to meet the rising costs of financial goals.
While the Shriram Life POS Assured Savings Plan guarantees savings benefits, it falls short of delivering inflation-adjusted returns and it also has a high agent commission.
The primary drawback lies in its bundling of insurance and investment, which often leads to suboptimal outcomes.
A more effective approach is to opt for a pure-term life insurance policy for adequate coverage and invest separately to achieve your financial goals. This strategy allows you to address both insurance and investment needs more effectively.
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When building a diversified investment portfolio, consider your risk tolerance, investment horizon, and financial goals. For a tailored approach to managing your savings and ensuring you stay on track, consult a Certified Financial Planner.
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