Reliance Fixed Savings is a non-linked, limited pay endowment life insurance plan that allows one to build a secure financial future and plan for important goals. Regular additions add to the growth of investment and along with the sum assured accrued additions ensure the return on investments is sizable. The plan is a limited premium paying policy that offers the option to include additional riders and subsequently increase risk cover.
Key features of Reliance Fixed Savings:
This plan from Reliance has the following features
- Sum assured - The Guaranteed Maturity Sum Assured is an amount that the policyholder achieves once the policy completes the policy term. It includes the product of annualised premium and premium payment term and Fixed Maturity Addition (if any)
- Premium paying term - Premiums under this policy are payable for a duration of 5 years for a policy term of 12 years, 7 years for policy term of 15 years, 10 years for a policy term of 20 years and this accounts for the limited premium paying period
- Premiums - Under this limited premium paying plan, the policyholder needs to pay a minimum of Rs. 25,000 annually in order to continue availing the benefits of the policy. There is no maximum cap for the annual premium than can be paid
- Premium paying modes - The premiums can be paid only in yearly, half-yearly, quarterly and monthly modes
- Premium paying method - Premiums for the policy can be paid through internet banking, ECS, cheques, demand drafts, credit cards and other applicable transaction medium
- Basis - This is an which allows the policyholder to garner benefits of investment through fixed regular additions offered through the plan, along with providing a life cover
- Policy validity - The policy is valid for the chosen policy term and is liable to lapse if premium payment is not done within the provided grace period and its benefits will cease
Benefits of Reliance Fixed Savings Plan:
This is aimed at providing many benefits to the policyholder and his/her family and focuses on ensuring a healthy financial scenario on retirement or in the case of unfortunate demise. The following are a detailed list of the benefits offered under this policy -
- Death benefit - The death benefit under this plan is payable on the death of the life insured, provided the policy is in force. The policy terminates with the death of the life insured and the death benefit is a total of the following -
- Higher of
- Sum Assured on Death (higher of Annualised Premium x Death Benefit Multiple or Guaranteed Sum Assured on maturity)
- 105% of all the premiums paid till the date of death
- Accrued Fixed Regular Additions (till the time of death, if not paid earlier)
- The death benefit multiple can be illustrated by the table below -
- Higher of
Death Benefit Option
Death Benefit Multiple
Premium Payment Term
- Maturity benefit - The maturity benefit under this plan is payable on survival of the life insured on the date of maturity, provided the policy is in force and it will include sums of Annualised Premium times the premium payment term plus the fixed maturity addition (annualised premium times the maturity factor)
- Surrender Benefit - The policy acquires a surrender value post full payment of premiums on two years for payment terms of 5 years and 7 years, and 3 years’ payment in case of payment term of 10 years. Provided the policy is in force, it can be surrendered to obtain a Guaranteed Surrender Value or Special Surrender Value. The amount thus payable as surrender benefit is at the discretion of the bank
- Tax benefits - One might be eligible for availing tax benefits for premiums under Section 80C and for maturity/death benefits under Section 10(10D) as per the prevailing tax laws
Eligibility Criteria for Reliance Fixed Savings:
Life insured and proposer can be different in this policy and while the life insured can be within the age group of 8 years to 60 years, the proposer must be above the age of 18 years. The minimum age at maturity will be 20 years under this policy and the maximum age will be 80 years.
How Reliance Fixed Savings Works?
Mr. B is a 30 year old salaried professional and opts for Reliance Fixed Savings.
He selects a premium payment term of 7 years, policy term of 20 years and pays a yearly premium of Rs. 50,000. Fixed Regular Additions accrue within the policy immediately upon premium payment -
- 8% during first policy year
- 9% during second policy year
- 10% per annum from third policy year onwards
On survival till the start of the last policy year, Mr. B receives the Accrued Fixed Regular Additions. And at maturity, he receives the Guaranteed Sum Assured which is a sum of annualised premium times the premium payment term and fixed maturity addition (annualised premium times the maturity factor).
The scenarios for Mr. B could be as follows -
Scenario 1 - He survives till the maturity period. The total benefits that he receives is to the tune of Rs. 6,17,025 out of which Rs. 3,50,000 is the annualised premium times the premium payment term and Rs. 2,67,025 becomes the fixed maturity addition.
Scenario 2 - Mr. A passes away in an unfortunate accident, and his nominee receives a lump sum amount as death benefit.
Riders for Reliance Fixed Savings Policy:
This plan can have five optional riders under its wing in order to provide a more . The riders are as follows -
- Reliance Term Life Insurance Benefit Rider - Provides an additional death benefit depending on the sum assured under the base policy
- Reliance Major Surgical Benefit Rider - Provides a lump sum amount to cover surgical expenses from a list of 33 surgeries
- Reliance Critical Conditions (25) Rider - Provides a lump sum amount to take care of 25 critical conditions
- Reliance Family Income Benefit Rider - Provides an income benefit per month equal to 1% of Sum assured from the date of the death of life insured to the end of the policy tenure or 10 years, whichever is later
- Reliance Accidental Death and Total and Permanent Disablement Rider - Provides additional death/disability benefit if death/disability occurs due to an accident. Can also waive off future premiums in case of disability.
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GST of 18% is applicable on life insurance effective from the 1st of July, 2017