TATA AIA Fortune Guarantee Plus: Review (2023) – Should you buy it?

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

10.) Research Methodology

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.

TATA AIA Fortune Guarantee Plus (टाटा एआईए लाइफ इंश्योरेंस फॉर्च्यून गारंटी प्लस): Review (2022) – Should you buy it? (Hindi – हिन्दी)

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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