AEGON Religare iGuarantee Insurance Plan

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Guaranteed return that too with an Insurance plan always comes with a cost. AEGON Religare iGuarantee Insurance Plan is very good example. It has very easy to understand rules. You pay premium for first six years and from the end of 6th year (or I would say beginning of 7th year) you will get 135% return on your premium paid. You will get it for next six years.


Policy has a premium paying term of 6 years. After PPT is over, for next six years: you will get 135% of premium paid back. This makes each of your instalments invested for a period of 6 years. If we count compounded annualized interest on each instalment: it comes to appx 4.5 %.  This is not to say that service tax is not included in the premium amount and if that is accounted then the return adjust at much lower level.

Year
Investment
Investment period
Year
Maturity
Return%
1
100000
6 years
7
135000
4.5 appx
2
100000
6 years
8
135000
4.5 appx
3
100000
6 years
9
135000
4.5 appx
4
100000
6 years
10
135000
4.5 appx
5
100000
6 years
11
135000
4.5 appx
6
100000
6 years
12
135000
4.5 appx

 

 

 

 

 

Some basic terms and conditions:

Death benefit:

  • During PPT: Sum Assured (S A is 10 x Annualised Premium)
  • During pay-out:  Guaranteed pay out will continue to be paid to the nominee until the end of 11th Year.

Surrender: Policy can obtain surrender value only after paying 2 years premium.

Ok, so if the argument for the low return is that policy provides guaranteed return and has inbuilt insurance covers then I ask, why do we need policy with guaranteed return and insurance cover in the first place?  If we are too concerned with returns then we should invest in FD.  Even after accounting for tax on interest earned, I am sure it will provide better return then what this plan offers. Insurance cover can be taken care by term policy. Beside returns: all insurance plans come with high surrender charge.  I suggest to stay away from this product.

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