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TATA AIA Fortune Guarantee Plus is a traditional endowment plan. It claims to provide financial protection to your family by providing a guaranteed regular income for the long term.
But how guaranteed are these payouts?
Will the regular payout help you to manage your financial situation after your retirement?
Do you find it hard to calculate the advantages and disadvantages of this plan? Don’t worry, we have done it for you. What about IRR analysis? Yes, we have it with illustrations!
Here, let’s do an in-depth review on TATA AIA Fortune Guarantee Plus based on their official brochure and discover whether it is a fortune to buy this plan or not.
Table of Content:
1.) What is TATA AIA Fortune Guarantee Plus?
2.) Features of TATA AIA Fortune Guarantee Plus
3.) Eligibility of TATA AIA Fortune Guarantee Plus
4.) TATA AIA Fortune Guarantee Plus: Premium Paying Term and Policy Term
5.) Benefits of TATA AIA Fortune Guarantee Plus
6.) Additional Benefits of TATA AIA Fortune Guarantee Plus
7.) How to cancel/surrender the TATA AIA Fortune Guarantee Plus?
8.) Advantages of TATA AIA Fortune Guarantee Plus
9.) Disadvantages of TATA AIA Fortune Guarantee Plus
11.) IRR of TATA AIA Fortune Guarantee Plus
12.) Final Verdict on TATA AIA Fortune Guarantee Plus
What is TATA AIA Fortune Guarantee Plus?
TATA AIA Fortune Guarantee Plus is an individual, non-participating, and non-linked savings plan.
TATA AIA Fortune Guarantee Plus plan says that it can protect your future financially through the guaranteed pay-out option. This guaranteed income plan offers you both life protection and savings features.
The TATA AIA Fortune Guarantee Plus gives the option to choose between a single premium option and a regular premium option.
Now let us see the features of TATA AIA Fortune Guarantee Plus.
Features of TATA AIA Fortune Guarantee Plus:
- Flexibility to choose between regular income or regular income with inbuilt critical illness benefits.
- Flexibility to receive the guaranteed benefit from 20 to 45 years.
- Return of premium at the end of the income period.
- Option to receive the guaranteed income annually or monthly.
- Option to choose single life option under single premium payment option.
- Option to choose your premium payment term.
- Option to choose additional riders.
- Tax benefit.
Eligibility of TATA AIA Fortune Guarantee Plus:
Plan Options:
Option-1
Regular Income
Option-2
Regular Income with an inbuilt Critical Illness Benefit
Here Option-1 is available on POS.
| Plan Parameters | Minimum | Maximum | |
| Age at Entry | Other than POS: | 60 years (for all options) | |
| Option 1: 1 year | |||
| Option 2: 18 years | |||
| For POS: | |||
| Option 1: 1 year | |||
| Option 2: Not Available | |||
| Age at Maturity | Other than POS: | Other than POS: | |
| Option 1: 18 year | Option 1: 77 year | ||
| Option 2: 23 years | Option 2: 70 years | ||
| For POS: | For POS: | ||
| Option 1: 18 year | Option 1: 65 year | ||
| Option 2: Not Available | Option 2: Not Available | ||
| Basic Sum Assured | Single pay: | Other than PoS: No Limit | |
| Single Life – 50,000 | |||
| Joint Life – 6,250 for the First Death | |||
| and 50,000 for the Second Death | For PoS: Corresponding to a maximum Death Benefit of R 25 lakhs | ||
| Regular/Limited pay: 24,000 Death Benefit Multiple | |||
| Premium | Single Pay – 5,000 | Other than PoS: subject to the Board Approved Underwriting Policy (BAUP) | |
| Limited Pay /Regular Pay – 24,000 p.a. | For PoS: Corresponding to a maximum Death Benefit of R 25 lakhs | ||
| Premium Payment Mode | Single / Annual / Half-yearly / Quarterly / Monthly | ||
| Income Mode | Annual and Monthly | ||
| Coverage | Single Life (for Single/Limited/Regular Pay) | ||
| Coverage | Joint life (for Single pay only) | ||
TATA AIA Fortune Guarantee Plus: Premium Paying Term and Policy Term: Review
| Premium Paying term | Policy Term | Income Period | |
| Option 1 – Regular Income | 20, 25, 30, 35, 40 & 45 years Policy term + Income period range 25 – 50 years | ||
| Single pay | 1 year | 5 years | |
| Regular pay | 5 to 12 years | Same as PPT | |
| Limited pay | 5 | 06 – 10 years | |
| 6 | 07 – 11 years | ||
| 7 | 08 – 12 years | ||
| 8 | 09 – 13 years | ||
| 9 | 10 – 14 years | ||
| 10 | 11 – 15 years | ||
| 11 | 12 – 16 years | ||
| 12 | 13 – 17 years | ||
| Option 2 – Regular Income with an inbuilt Critical Illness benefit | |||
| Regular pay | 5 & 10 years | Same as PPT | 30 years for 5 pay 25 years for 10 pay |
Benefits of TATA AIA Fortune Guarantee Plus: Review
Maturity Benefit:
1.) Guaranteed Annual Income:
Once the completion of the Premium Payment Term, the policyholder will receive the Guaranteed Annual Income till the end of the income period. The policyholder has the option to choose the Income Frequency.
2.) Return of Premium Benefit (ROP):
After the completion of all the premiums, the Return of the Premium will be paid to the policyholder at the end of the policy term.
The option to receive the commuted value of the future Guaranteed Annual Income plus the Return of Premium Benefit in the form of a lump sum, discounted at 7.50% per year, is available to the policyholder or the nominee/legal heir(s) of the life insured(s), as applicable, at any time during the Income Period.
Death Benefit Review:
If the policyholder passes away, unfortunately, then the nominee or the legal heir of the policyholder will get the highest of the following as life assured.
- 1.25 X Single Premium or 10 X Annualized Premium (excluding the discount)
- 105% of the total premium paid
- Basic Sum Assured
Tax Benefit
All the TATA AIA Insurance policies come under Section 80C of the Income Tax Act, 1961.
Do you want to watch this TATA AIA Fortune Guarantee Plus investment Plan review as a video?
Expert analysis of TATA AIA Fortune Guarantee Plus with illustrations and precise calculation. Check our youtube review video below.
TATA AIA Fortune Guarantee Plus Critical Illness Benefit Review:
This benefit is available only for Regular Income with an inbuilt Critical Illness option.
Following a diagnosis of any of the covered Major Critical Illnesses on the life of the Insured, it shall be payable beginning at the end of the policy year (for yearly income frequency).
The coverage will remain in effect and all upcoming premiums will not be required.
The insured person must have never before had the diagnosis in their lifetime.
The plan includes coverage for 40 diseases.
You can read the TATA AIA Fortune Guarantee Plus brochure (pdf) here for more details.
Additional Benefits of TATA AIA Fortune Guarantee Plus: Analysis
Grace Period:
- For monthly mode, it is 15 days.
- For yearly, half-yearly, and quarterly modes, it is 30 days.
Revival:
If the policy is not surrendered after the grace period, then the policy can be revived within 5 years of the first unpaid premium before maturity.
How to cancel/surrender the TATA AIA Fortune Guarantee Plus?
Canceling/Surrendering during the free look period: Review
If the policyholder is not satisfied with the features of TATA AIA Fortune Guarantee Plus, then the policyholder can cancel the policy by proving a written statement to the company.
The policyholder will get a refund of the premium after deducting the charges.
The free look period is 15 days if the policy is purchased directly. It will be extended up to 30 days if the policy is purchased through distance mode.
Canceling/Surrendering after the Freelook period: Review
During the policy term, based on the premium-paying term as described below, the policy shall accrue a surrender value.
1.) For Single Premium Option:
The Surrender Benefit is payable at any time during the policy term.
To calculate the premium of TATA AIA Term Insurance policies. click below.
Term Insurance Premium Calculator Online 2023
2.) For Regular Premium Option:
The policy can be surrendered after the completion of the two premium terms.
The higher the Guaranteed Surrender Value (GSV) or Special Surrender Value shall be the surrender value payable.
Guaranteed Surrender Value = GSV Factor * Total Premiums Paid
Advantages of TATA AIA Fortune Guarantee Plus:
- You can maintain a consistent cash flow in this plan.
- The policy is further improved by the available riders.
- At the end of the income period, the premium is returned.
- Single, regular or limited pay premium terms that are flexible.
- Tax benefits according to the relevant tax laws.
- Choice of Income Period between 20 and 45 Years
- In terms of IRR (Interest Rate), this plan offers an advantage over another annuity / yearly pay-out programs that are offered on the market.
Disadvantages of TATA AIA Fortune Guarantee Plus:
- For loans and surrenders, the lock-in period is two years.
- The policy has a 90-day waiting period.
- The payout for each year is a fixed one. The rate of inflation is not considered.
Research Methodology: Review
Now, we have seen all the necessary details that we need to know about TATA AIA Fortune Guarantee Plus.
Now let’s see whether this plan can help us to create long-term wealth or not by calculating the IRR (Internal Rate of Return) of TATA AIA Fortune Guarantee Plus.
Then let us compare TATA AIA Fortune Guarantee Plus with other investment plans to see which gives us a better return in the long term.
IRR Analysis of TATA AIA Fortune Guarantee Plus: Good or Bad?
Case: I
| Entry Age: 35 Years | Annualized Premium: 1,00,000 |
| Gender: Male | Basic Sum Assured: 12,00,000 |
| Premium Paying Term: 10 Years | Premium Frequency: Annual |
| Policy Term: 10 Years | Plan Option: Regular Income |
| Income Term: 25 Years (From 11th Year to 35th Year) The Policy Maturity date is at the end of the Policy Term | Income Mode: Annual |
Now, let us calculate the IRR (Internal Rate of Return) by using the online calculator provided by TATA AIA Fortune Guarantee Plus.
| Case 1 | |||
| Age | Year | Annualized Premium/
Maturity Benefit |
Death Benefit |
| 36 | 1 | 1,00,000 | 12,00,000 |
| 37 | 2 | -1,00,000 | 12,00,000 |
| … | … | … | … |
| 45 | 10 | -1,00,000 | 12,00,000 |
| 46 | 11 | 95,120 | |
| 47 | 12 | 95,120 | |
| … | … | … | |
| 69 | 34 | 95,120 | |
| 70 | 35 | 10,95,120 | |
| IRR | 6.58% | ||
As you can see in the above illustration we have calculated the IRR. At the end of the policy term, we can get an IRR of 6.58% in case-I. After 35 years, we can get Rs. 10,95,120 as a Maturity Benefit and Rs. 12,00,000 as a Death Benefit.
Case-II
| Entry Age: 35 Years | Annualized Premium: 1,00,000 |
| Gender: Male | Basic Sum Assured: 12,00,000 |
| Premium Paying Term: 10 Years | Premium Frequency: Annual |
| Policy Term: 10 Years | Plan Option: Regular Income with an inbuilt Critical Illness benefit |
| Income Term: 25 Years (From 11th Year to 35th Year) The Policy Maturity date is at the end of the Policy Term | Income Mode: Annual |
| Scenario I: No Critical Illness till Maturity |
| Case 2 | |||
| Age | Year | Annualized Premium/
Maturity Benefit |
Death Benefit |
| 36 | 1 | 1,00,000 | 12,00,000 |
| 37 | 2 | -1,00,000 | 12,00,000 |
| … | … | … | … |
| 45 | 10 | -1,00,000 | 12,00,000 |
| 46 | 11 | 96,760 | |
| 47 | 12 | 96,760 | |
| … | … | … | |
| 69 | 34 | 96,760 | |
| 70 | 35 | 10,96,760 | |
| IRR | 6.67% | ||
In case II, in the above illustration we have calculated an IRR of 6.67% at the end of the policy term. After 35 years, we get Rs. 10,96,760 as a Maturity Benefit and Rs. 12,00,000 as a Death Benefit.
| Case Scenario | IRR (Internal Rate of Return) | Maturity Benefit | Death Benefit |
| Case-I | 6.58% | Rs. 10 lacs | Rs. 12 lacs |
| Case-II | 6.53% | Rs. 10 lacs | Rs. 12 lacs |
As you can see, in TATA AIA Fortune Guarantee Plus, we get an investment return that is equal to bank FDs and it may not give you adequate purchasing power and an inflation-beating return for the long term.
TATA AIA Fortune Guarantee Plus vs. Other Investment Plans:
TATA AIA Fortune Guarantee Plus vs Tata AIA Fortune Guarantee Supreme Plan – Review
Both plans are Individual, Non-Linked, Non-participating, Life Insurance Savings Plans.
In Tata AIA Fortune Guarantee Supreme Plan You can choose the guaranteed benefit in either lump sum or regular income.
To know more with a detailed analysis of the pros and cons of this plan. Click below
Tata AIA Fortune Guarantee Supreme Plan Review: Is It Good or Bad?
TATA AIA Fortune Guarantee Plus vs HDFC Life Sanchay Plus – Review
Both plans are not ULIP but HDFC Life Sanchay Plus offers four different policy benefit options to choose from. They are, Guaranteed Maturity, Guaranteed Income, Life Long Income, Long Term Income.
To read the detailed review of this plan with precise IRR (Interest Rate) analysis
HDFC Life Sanchay Plus: Review-Should You Buy It?
TATA AIA Fortune Guarantee Plus vs LIC Jeevan Umang
LIC Jeevan Umang offers both life protection and guaranteed income which claims to be ‘the 100-year plan’.
Survival benefit is equal to 8% of the sum assured.
LIC Jeevan Umang official brochure (pdf)
To know more about this plan with insights into the advantages and disadvantages. Click below.
LIC Jeevan Umang: Review (2023) – Should You Buy It?
TATA AIA Fortune Guarantee Plus vs Tata AIA Life Insurance Fortune Guarantee Pension Plan – Review
TATA AIA Fortune Guarantee Plus is an individual, non-participating, and non-linked savings plan while Tata AIA Life Insurance Fortune Guarantee Pension Plan is a Non-Linked, Non-Participating, Annuity Plan.
Tata AIA Life Insurance Fortune Guarantee Pension Plan official brochure (pdf)
For the detailed review of this plan with illustrations and precise calculations. Click below.
Tata AIA Life Insurance Fortune Guarantee Pension Plan Review: Good or Bad?
TATA AIA Fortune Guarantee Plus vs PPF & ELSS – Review
As an alternative to TATA AIA Fortune Guarantee Plus, you can invest the money in various investments that can give you a better investment return.
For a risk-free investment plan, you can choose PPF or RBI bonds for the long term.
Since PPF has matured at 15 years, you can invest your money in PPF for 15 years with a 7.10% interest rate and then you can reinvest the money in RBI Bonds or a 70:30 ratio in equity and debt.
Or
You can choose Mutual Funds.
For instance, let’s take ELSS.
Overall Contribution: Rs. 1,00,000
Term Insurance:
Sum Assured: Rs. 12,00,000
Annual Premium: Rs. 5,500
Tenure: 10 years
ELSS Contribution: Rs. 94,500
Assumed Rate of Return: 12% with investment risk
Then,
| Term Insurance + ELSS | |||
| Age | Year | Term Insurance Premium + ELSS | Death Benefit |
| 36 | 1 | 1,00,000 | 12,00,000 |
| 37 | 2 | -1,00,000 | 12,00,000 |
| … | … | … | … |
| 45 | 10 | -1,00,000 | 12,00,000 |
| 46 | 11 | 96,760 | |
| 47 | 12 | 96,760 | |
| … | … | … | |
| 69 | 34 | 96,760 | |
| 70 | 35 | 46,20,860 | |
| IRR | 8.84% | ||
As calculated in the above illustration, after 10 years, we can get Rs. 17,76,122 as a Post-Tax Return.
You can reinvest the money for the remaining 25 years at a return of 8% in hybrid funds or on a combination of equity mutual funds and debt mutual funds at a 30:70 ratio and can withdraw Rs. 96,760 per annum.
If then, at the end of the 35 years, you can have Rs. 45,24,100 as an investment return.
| Case Scenario | IRR (Internal Rate of Return) | Maturity Benefit | Death Benefit |
| Case-I | 6.58% | Rs. 10 lacs | Rs. 12 lacs |
| Case-II | 6.53% | Rs. 10 lacs | Rs. 12 lacs |
| ELSS + Hybrid Funds (Post-tax) | 8.84% | Rs. 45 lacs | Rs. 12 lacs |
In the above illustration, we have calculated the IRR of ELSS + Hybrid Funds (Post-tax).
Here as a result, compared to TATA AIA Fortune Guarantee Plus, we get a better investment return in other investment plans for the long term.
TATA AIA Fortune Guarantee Plus vs. Other Investment Plans: Comparison Review
After a thorough and detailed review of all the alternative investment plans for TATA AIA Fortune Guarantee Plus. It seems that ELSS and PPF are far better options and the calculated returns are higher combined with good fund performance.
We should not quickly get enchanted by new plans in the market and fall for them. But, compare and review it with other investment plans.
Most of the time, after a comprehensive review, Term Insurance + PPF or ELSS seem to be better options.
Do you like to watch this review in Hindi?
Please check out our hindi youtube video review of TATA AIA Fortune Guarantee Plus (टाटा एआईए लाइफ इंश्योरेंस फॉर्च्यून गारंटी प्लस) with a presentation that covers all the aspects like IRR analysis and precise calculation of returns.
Final Verdict on TATA AIA Fortune Guarantee Plus:
After our detailed analysis, we can see that ELSS can give you a better return compared to TATA AIA Fortune Guarantee Plus. So, the TATA AIA Fortune Guarantee Plus did not give us a good long-term return.
But still, why do agents try to sell you this product? The simple answer is that like many policies in the bazaar, the agent commission is very high for this policy!
Shortly, you can get a better return on PPF, RBI Bonds, and Mutual Funds. As for term insurance, you can choose pure term insurance that can give you high-life coverage at a low cost.
Please don’t follow amateur advice on social media platforms like Quora, Facebook, Twitter, etc. Financial planning is a very important aspect of your life, it is always wise to take the help of a professional financial planner.
If you have any comments or questions, write them in the comment box below.
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This is guaranteed income right ? or will it be changed ? the one with 30% income slab with 7.5% FD will not beat inflation but this tata aia does ? also what if elss doesn’t guarantee 10-12 % returns ? this is guaranteed at least
You are right, it is a guaranteed income and tax free, suitable for individuals subjected to 30% and above income tax slab
I think for a person on 30% tax bracket, it is surely better to invest in the above insurance product than FD if the intention is to have a seamless tax free return locked for longer period of time which is not available in FD. Mutual fund does carry investment risk, as they say past performance cannot be guaranteed to be repeated, for eg in the last two years, only few mutual funds have performed better than FD.
I do not therefore agree with your final verdict on this product, as except for PPF other schemes are taxable and you can only invest limited amount in PPF.
Leaving NSC/PPF, is this the best pension plan available in the market? How do you compare this with LIC which does not give these options and the rate of return seems to be high
When comparing pension plans, it’s essential to consider factors like flexibility, returns, and lock-in periods. While NSC/PPF offer stability, LIC policies often boast higher returns but come with longer lock-in periods. For flexibility, consider SWP in mutual funds, offering liquidity and growth potential. Assess your goals and risk tolerance to choose the best option for your pension planning needs.
I think this kind of policy is made for Directors/ important employees – referred as Keyman insurance policy!.
so company will pay the insurance premium and will consider it as expenses in the year of Payment. on the other hand, the employees will get the annual income from end of the premium period – thereby deferred the tax payment.
No. This is not a Keyman insurance policy.
But this is a guaranteed return. If we go with mutual funds it will not guaranteed. Also may I know what is ELSS ? Is it also tax free?
You’re right, Tata Policy likely offers a guaranteed return, though less, while ELSS (Equity Linked Saving Scheme) is a mutual fund and doesn’t guarantee returns.
ELSS and Taxes:
ELSS itself isn’t tax-free, but it offers tax benefits on investment. Here’s the breakdown:
Investment Deduction: ELSS qualifies for tax deduction under Section 80C of the Income Tax Act. You can deduct up to Rs. 1.5 lakh per year from your taxable income, potentially lowering your tax bracket.
Capital Gains Tax: When you redeem your ELSS units after the 3-year lock-in period, the gains are taxed. However, long-term capital gains exceeding Rs. 1 lakh in a year are taxed at 10%, which is lower than the tax you might pay on your income.
ELSS vs Guaranteed Return Products:
While guaranteed return products seem attractive, their returns may not always beat inflation. ELSS, though riskier, has the potential for higher returns that can outpace inflation in the long run.
Here’s a quick comparison:
Guaranteed Return Products: Lower risk, lower potential returns.
ELSS: Higher risk, higher potential returns (after considering taxes).
Alternative for Guaranteed Returns:
If guaranteed returns are your priority, consider PPF (Public Provident Fund). It offers a government-backed interest rate and tax benefits similar to ELSS (EEE category – investment, interest, maturity all tax-free).
Choosing the Right Option:
The best option depends on your risk tolerance and financial goals. Discuss with a financial advisor to understand which product aligns best with your needs.
Is the return tax free that we get annually
Yes.