SUD Life Century Royale Plan: Good or Bad? A Detailed Review

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Can the SUD Life Century Royale Plan help you secure wealth and protection for your family’s future?

Can the SUD Life Century Royale Plan provide you the peace of mind for a financially secure future?

Is the SUD Life Century Royale Plan the perfect choice for your future financial stability?

In this review, we will explore the features, advantages, disadvantages, and potential returns of the SUD Life Century Royale plan. By calculating the Internal Rate of Return (IRR) and comparing it with other investment options, this analysis will provide a clear understanding of how this plan stacks up.

What is the SUD Life Century Royale Plan?

SUD Life Century Royale is a Non-Linked Non-Participating Individual Savings Plan. SUD Life Century Royale Plan provides Guaranteed Life Cover throughout the policy term, along with Guaranteed Income during the policy term in addition to the Guaranteed Maturity Benefit at the end of the policy term.

What are the features of the SUD Life Century Royale Plan?

Choice of two premium payment terms: 7 years or 12 years
Guaranteed income during the payout period
Assured life cover throughout the SUD Life Century Royale Plan policy term
Flexibility to select the policy term
Guaranteed maturity benefit at the end of the SUD Life Century Royale Plan policy term
Tax benefits on premiums paid and benefits received, subject to prevailing tax laws

Who is eligible for the SUD Life Century Royale Plan?

Parameters	7 pay	12 pay
Minimum Entry Age	18 years	18 years
Maximum Entry Age	55 years	50 years
Maximum Maturity Age	95 years
Premium paying term	7 pay	12 pay
Policy Term	25, 30, 35, 40 years	30, 35, 40, 45 years
Minimum Annualised Premium	₹ 1 Lakh	₹ 60,000
Maximum Annualised Premium	As per Board approval

What are the benefits of the SUD Life Century Royale Plan?

Death benefit

In case of death of the life assured, during the SUD Life Century Royale Plan policy term, the Sum Assured on Death will be paid in lumpsum immediately to the nominee.

Sum Assured on Death is the Highest of

10 times of Annualized Premium OR
10 times of Annual Premium OR
105% of Total Premiums Paid as of the date of death of the Life Assured OR
Absolute Sum Assured as on the date of death of the Life Assured

Guaranteed Maturity Benefit

On survival of the Life Assured till the end of the SUD Life Century Royale Plan Policy Term, Guaranteed Maturity Benefit shall be payable depending on the premium payment term.

For 7 Pay – 8 times of Annualized Premium
For 12 Pay – 15 times of Annualized Premium.

Survival Benefit:

Guaranteed Income (GI): On survival of the Life Assured, the Guaranteed Income (GI) as a percentage of the Guaranteed Maturity Benefit depending on the Age at the entry of the Life Assured, Premium Payment Term and Policy Term will be paid during the pay-out period till the end of the SUD Life Century Royale Plan policy term.

7 Pay – start from the end of the 10^th Policy Year and
12 pay – start from the end of the 15^th Policy Year.

Grace Period, Lapse & Reduced paid-up and Revival of SUD Life Century Royale Plan

Grace period

A grace period of fifteen days, where the policyholder pays the premium on a monthly basis and 30 days in cases of Yearly mode will be allowed.

Lapse

If you have not paid the due premiums for the first full policy year within the grace period, the policy lapses. Life cover ceases and no benefits will be paid under the lapsed policy till the policy is revived.

Reduced Paid-up

If the premiums due under the SUD Life Century Royale Plan policy have been paid for at least the first full policy year and subsequent premiums are not paid, then the policy will not lapse, it will acquire Reduced Paid-Up status and will continue with reduced benefits

Revival

You can revive your Lapsed/Reduced Paid-up policy within five years from the due date of the first unpaid premium.

Free Look period for SUD Life Century Royale Plan

If you disagree with any of those terms or conditions in the policy, you have the option to return the SUD Life Century Royale Plan policy within 30 days from the date of the receipt of the policy document.

Surrendering SUD Life Century Royale Plan

The SUD Life Century Royale Plan Policy will acquire Special Surrender Value provided one full Policy Year premiums are received. The policy will acquire Guaranteed Surrender Value provided the first two consecutive full Policy Year premiums are received.

What are the advantages of the SUD Life Century Royale Plan?

For an annual premium of ₹2 lakh or more, the Guaranteed Maturity Benefit will be enhanced by 1%.
During the premium payment term, policyholders have the flexibility to change the premium payment frequency.
Loans can be availed once the policy acquires a surrender value, with up to 70% of the surrender value available as a loan.
All the benefits are guaranteed at the onset of the plan.

What are the disadvantages of the SUD Life Century Royale Plan?

There is no option to defer the survival benefits.
Although the benefits are guaranteed, the returns are relatively low.
The sum assured may not be sufficient.
Survival benefits are likely to be spent on discretionary expenses.

Research Methodology of SUD Life Century Royale Plan

The SUD Life Century Royale Plan is a limited premium policy that provides life coverage, survival benefits, and maturity benefits. While it offers regular cash flow, it’s important to assess the returns to determine its effectiveness.

To do this, we calculate the Internal Rate of Return (IRR) based on the figures provided in the SUD Life Century Royale Plan policy brochure, allowing for a comparison with other investment options.

Benefit Illustration – IRR Analysis of SUD Life Century Royale Plan

Consider a 40-year-old male who selects the SUD Life Century Royale Plan with a sum assured of ₹10 lakhs. The policy term is 40 years, with a premium payment period of 7 years, paying an annual premium of ₹1 lakh.

Male	40 years
Sum Assured	₹ 10,00,000
Policy Term	40 years
Premium Paying Term	7 years
Annualised Premium	₹ 1,00,000

Starting from the end of the 10^th policy year, he receives an annual survival benefit of ₹44,260. Along with the final payout, he also receives a survival benefit of ₹8 lakhs. The calculated IRR for this cash flow is 4.61% as per the SUD Life Century Royale Plan maturity calculator.

Age	Year	Annualised premium / Maturity benefit	Death benefit
40	1	-1,00,000	10,00,000
41	2	-1,00,000	10,00,000
42	3	-1,00,000	10,00,000
43	4	-1,00,000	10,00,000
44	5	-1,00,000	10,00,000
45	6	-1,00,000	10,00,000
46	7	-1,00,000	10,00,000
47	8	0	10,00,000
48	9	0	10,00,000
49	10	0	10,00,000
50	11	44,260	10,00,000
51	12	44,260	10,00,000
52	13	44,260	10,00,000
53	14	44,260	10,00,000
54	15	44,260	10,00,000
55	16	44,260	10,00,000
56	17	44,260	10,00,000
57	18	44,260	10,00,000
58	19	44,260	10,00,000
59	20	44,260	10,00,000
60	21	44,260	10,00,000
61	22	44,260	10,00,000
62	23	44,260	10,00,000
63	24	44,260	10,00,000
64	25	44,260	10,00,000
65	26	44,260	10,00,000
66	27	44,260	10,00,000
67	28	44,260	10,00,000
68	29	44,260	10,00,000
69	30	44,260	10,00,000
70	31	44,260	10,00,000
71	32	44,260	10,00,000
72	33	44,260	10,00,000
73	34	44,260	10,00,000
74	35	44,260	10,00,000
75	36	44,260	10,00,000
76	37	44,260	10,00,000
77	38	44,260	10,00,000
78	39	44,260	10,00,000
79	40	44,260	10,00,000
80		8,44,260	10,00,000

	IRR	4.61%

Despite the guaranteed payouts, the return rate is lower than that of debt instruments. Additionally, the staggered payout structure often fails to align with real financial needs.

With poor returns, a rigid cash flow pattern, and an insufficient sum assured, the SUD Life Century Royale Plan proves to be an inefficient combination of insurance and investment.

SUD Life Century Royale Plan Vs. Other Investment

The SUD Life Century Royale Plan offers limited benefits, with its rigid payout structure being a significant drawback. Combining insurance and investment in this plan results in lower returns.

By redirecting the same annual premium of ₹1 lakh into separate insurance and investment products, we can better compare the returns.

SUD Life Century Royale Plan Vs. Pure-term + ELSS

For life insurance, a pure-term policy with a sum assured of ₹10 lakhs comes with a premium of ₹30,800. The policy term is 30 years, with a 5-year premium payment term. Although the previous example used a 40-year policy term, pure-term policies typically cover only working years.

Similarly, the earlier scenario had a 7-year premium term, whereas this option reduces it to 5 years. During the first 5 years, the remaining amount after paying for insurance premiums is invested, and in the final 2 years, the full ₹1 lakh is available for investment.

Pure Term Life Insurance Policy
Sum Assured	₹ 10,00,000
Policy Term	30 years
Premium Paying Term	5 years
Annualised Premium	₹ 30,800
Investment	₹ 69,200

Choosing the right investment is critical. High-risk investors may opt for equity-based instruments, while low-risk investors can choose debt options. In this case, we selected an Equity Linked Savings Scheme (ELSS) as the investment vehicle.

Age	Year	Term Insurance premium + ELSS	Death benefit
40	1	-1,00,000	10,00,000
41	2	-1,00,000	10,00,000
42	3	-1,00,000	10,00,000
43	4	-1,00,000	10,00,000
44	5	-1,00,000	10,00,000
45	6	-1,00,000	10,00,000
46	7	-1,00,000	10,00,000
47	8	0	10,00,000
48	9	0	10,00,000
49	10	0	10,00,000
50	11	44,260	10,00,000
51	12	44,260	10,00,000
52	13	44,260	10,00,000
53	14	44,260	10,00,000
54	15	44,260	10,00,000
55	16	44,260	10,00,000
56	17	44,260	10,00,000
57	18	44,260	10,00,000
58	19	44,260	10,00,000
59	20	44,260	10,00,000
60	21	44,260	10,00,000
61	22	44,260	10,00,000
62	23	44,260	10,00,000
63	24	44,260	10,00,000
64	25	44,260	10,00,000
65	26	44,260	10,00,000
66	27	44,260	10,00,000
67	28	44,260	10,00,000
68	29	44,260	10,00,000
69	30	44,260	10,00,000
70	31	44,260	10,00,000
71	32	44,260	10,00,000
72	33	44,260	10,00,000
73	34	44,260	10,00,000
74	35	44,260	10,00,000
75	36	44,260	10,00,000
76	37	44,260	10,00,000
77	38	44,260	10,00,000
78	39	44,260	10,00,000
79	40	44,260	10,00,000
80		41,66,593	10,00,000

	IRR	7.00%

The pre-tax maturity value of the ELSS is ₹12.01 lakhs, and the post-tax maturity value is ₹11.35 lakhs. This amount is then transferred to an instrument yielding a 7% annual return.

From this, an annual withdrawal of ₹44,260 is made to mirror the survival benefits of the SUD Life Century Royale Plan. In the final year, the remaining investment is fully withdrawn to match the maturity benefit of the SUD Life Century Royale Plan plan.

ELSS Tax Calculation
Maturity value after 10 years	12,01,312
Purchase price	5,46,000
Long-Term Capital Gains	6,55,312
Exemption limit	1,25,000
Taxable LTCG	5,30,312
Tax paid on LTCG	66,289
Maturity value after tax	11,35,023

The IRR for this combined strategy of a pure-term life insurance policy and ELSS investment is 7%. The returns could be higher if the annual withdrawals were deferred. However, to match the cash flow pattern of the SUD Life Century Royale Plan, withdrawals are made annually.

This alternative approach provides full flexibility to design withdrawals based on personal financial needs—flexibility that the SUD Life Century Royale Plan lacks.

Final Verdict on the SUD Life Century Royale Plan

The SUD Life Century Royale Plan is a traditional endowment plan where you pay premiums for a limited period but receive life coverage for the entire SUD Life Century Royale Plan policy term.

SUD Life Century Royale Plan provides guaranteed survival and maturity benefits, which may appeal to some investors. However, the returns fall short of a long-term investment.

The survival benefits are fixed and insufficient to cover significant expenses. Additionally, with a policy term of 40 years, the returns fail to outpace inflation and it has a high agent commission.

The combination of a long investment horizon, low returns, inflexible payout structure, and inadequate sum assured makes the SUD Life Century Royale Plan unsuitable for both insurance and investment purposes.

As previously discussed, separating insurance from investment generally yields better results than endowment plans. Pure-term policies offer comprehensive life coverage with an adequate sum assured at affordable premiums.

For achieving life goals, building a diversified investment portfolio helps navigate financial risks more effectively.

When it comes to financial advice, are Quora, Facebook, and Twitter the final word?

Before investing, assess your risk tolerance, time horizon, and financial goals. For personalized guidance, consider consulting a Certified Financial Planner who can design a strategy tailored to your needs. Professional expertise ensures your plan is well-suited to your individual requirements.

SUD Life Century Royale Plan: Good or Bad? A Detailed Review

Table of Contents:

What is the SUD Life Century Royale Plan?

What are the features of the SUD Life Century Royale Plan?

Who is eligible for the SUD Life Century Royale Plan?