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Reliance Nippon Life Classic Plan II

The Reliance Nippon Life Classic Plan II is a unit-linked, non-participating endowment life insurance plan from Reliance Nippon Life Insurance Limited that offers policyholders the choice to make long term investments and diversify these to ensure maximum returns. The policy offers policyholders a choice of 5 funds with varying degrees of risk to suit every investment appetite as well as life coverage for the policyholder. The policy also allows for enhancement of the basic life coverage through riders as well as an easy liquidity option allowing for partial withdrawals from the policy in case of an emergency.

Premium amounts under the policy start at a minimum of Rs.20,00 for the annual mode and Rs.75,000 in case of single premium mode for a policy term ranging from 15-30 years.

Policyholders also receive tax benefits from investing in the policy, subject to prevailing tax laws.

Eligibility- Who is the Reliance Nippon Life Classic Plan II for?

The Reliance Nippon Life Classic Plan II is an ideal plan for those looking to build their wealth through investing in mutual funds while also receiving life coverage. The plan provides policyholders with guaranteed returns through the investments made at different points of time and also allows for the partial withdrawal of funds in the event of an emergency.

Policyholders looking to invest in the plan are required to meet the following eligibility criteria:

Parameters Eligibility
Minimum entry age 7 years
Maximum entry age 60 years (as on last birthday)
Minimum maturity age 22 years
Maximum maturity age 75 years
Policy term 15-30 years
Premium paying term One-time payment for single mode Equal to the policy term for regular mode

Sum Assured and Premium Range- What You Get and What It Costs

Sum Assured:

The sum assured amount under the Reliance Nippon Life Classic Plan II would depend on the premium amount. The plan does not specify a minimum sum assured amount.

Premium:

Policyholders who choose to invest in the Reliance Nippon Life Classic Plan II have a choice of 2 premium paying terms. Policyholders can either opt for a single premium payable at once or they can choose a regular premium and pay their premium amount monthly, half-yearly or yearly. The minimum amount payable as premium under the two premium payment terms is illustrated in the table below:

Premium payment term Minimum Maximum
Single Rs.75,000 No limit
Regular (annual) Rs.20,000 No limit
Regular (semi-annual) Rs.30,000 No limit
Regular (monthly) Rs.30,000 No limit

Plan Coverage- What the Reliance Nippon Life Classic Plan II covers

The Reliance Nippon Life Classic Plan II works in the following way:

  • The individual chooses the policy term and the sum assured amount to be paid.
  • The individual chooses the premium paying term next.
  • The individual chooses from a basket of 5 funds and invests in a combination of them based on his/her preference.
  • The policyholder can choose to top up the premium amount paid to increase the fund value, subject to a minimum of Rs.5,000.
  • In the event of the death of the life insured, the death benefit payable would depend on the entry age and the base sum assured amount payable. The minimum base sum assured amount under the base plan is calculated as follows:
Premium paying term Entry age (less than 45 years) Entry age (greater than 45 years)
Regular pay Higher of:
  • 10 times annualised premium
  • 0.5 X policy term X annualised premium
Higher of:
  • 7 times annualised premium
  • 0.25 X policy term X annualised premium
Single pay 125% of single premium 110% of single premium
  • The minimum sum assured amount payable in case of a top up premium is as follows:
Base sum assured Entry age less than 45 years Entry age greater than 45 years
  125% of single premium 110% of single premium

The coverage under the plan is mentioned in the table below:

Death benefit In the event of the policyholder’s death during the policy term and when the policy is in force, the following benefit will be payable:
  • Highest of the base sum assured or the base fund value or 105% of all premiums paid
  • Highest of all top-up sum assured or top-up fund value or 105% of all the total top-up premiums paid till date.
Maturity benefit If the policyholder survives till the end of the policy term and if the policy is still in force and all premiums due were paid, the total fund value (the sum of the base fund value and top-up fund value) will be paid as maturity benefit.
Sum assured on accidental death In the event of accidental death before 65 years, nominees stand to receive an additional amount that is equal to the base sum assured (up to a maximum of Rs.10 lakh).
Top-ups If the premiums under the base policy are paid, top-us would be accepted at a minimum amount of Rs.5,000 per top-up. The maximum amount as top-up cannot exceed 100% of the value of the base premium.
Systematic Transfer Plan (STP) STP permits the investment of a percentage of the premium or top-up into the equity market (through investment in the equity fund option). This amount would be switched periodically (up to 1/4th of the amount would be switched periodically). STP can be opted out of at a policy anniversary.

Riders/ Add-on Coverage

The policy does not offer any riders/add-on coverage at present.

Exclusions:

The Reliance Nippon Life Classic Plan II provides policyholders with a number of features and benefits under the policy. However, there are some exclusions in which case the policy benefits will not be payable. The exclusions under the policy are mentioned below:

  • Suicide: In the event of the policyholder committing suicide within 12 months of the policy inception date or 12 months from the date of revival of the policy, the nominee/claimant will receive the fund value as on the death of death.
  • The following are excluded from the payment of any additional sum assured due to accidental death in the event of death arising either directly or indirectly:
    • The policyholder indulging in self-harm or self-injury.
    • Participation in any criminal activity with criminal intent.
    • Being under the influence of alcohol or drugs.
    • Racing or indulging in racing through any other means except on foot.
    • Flying or attempts at flying or the use of an aerial device other than as a passenger on board an aircraft.
    • War, invasion, civil war, mutiny, rebellion, terrorism, military or other insurrection.
    • Participation in riots, strikes or civil commotion.
    • Participation in active military, naval or air force duty.

Other Key Features- Freelook Period, Surrender Value, Grace Period etc.

The additional features provided under the Reliance Nippon Life Classic Plan II are listed below:

Free look period If the policyholder is dissatisfied with any of the provisions of the policy after receiving the physical policy document, he/she may return the document along with the reason for the same within the free look period at no cost. The free look period is 15 days from the date of receipt of the policy document or 30 days in the case of distance marketing policies.
Grace period The policy provides policyholders with a grace period of 30 days from the due date of payment to pay any outstanding premium amount. For the monthly mode, the grace period is 15 days.
Partial withdrawal The policy allows for partial withdrawals after 5 policy years from the date of payment or the policyholder attaining 18 years of age, whichever is later. Partial withdrawals of a minimum of Rs.5,000 can be made at a given time, but withdrawals cannot exceed 20% of the total fund value. Additionally, the minimum fund balance cannot be lower than 125% of the annualised premium amount for regular premium and 50% for single premium policies.
Fund switching The policy allows for switching between funds, with a maximum of 52 free fund switches during one policy year. Unused free switches cannot be carried forward to the next year.
Surrender The policy acquires surrender value on payment of the base premium and can be surrendered at any time during the policy tenure. Surrender value payable would be the fund value minus discontinuance charges, if applicable.
Premium discontinuance (before 5th policy year) If the premium has not been paid during the grace period, one of the following options are to be selected by the policyholder:
Pay overdue premium Pay overdue premiums and other charges and the policy continues with full benefits.
Stay invested in the Discontinued Policy Fund, with complete withdrawal option Policyholder will be entitled to Discontinued Policy Fund Value after the 5th policy year.
Stay invested in the Discontinued Policy Fund with revival option If the policy is revived before the revival period, the policyholder will be entitled to the Discontinued Policy Fund after the completion of the revival period.
Premium discontinuance (after 5th policy year) After the 5th policy year, if the premium has not been paid during the grace period, the policyholder is required to choose one of the below options:
Pay overdue premium Pay the overdue amount and policy would continue with full benefits.
Withdraw from policy without any cover Risk cover would stop and the policy would be terminated on payment of the fund value and to-up value.
Convert policy into paid-up Policy would be converted into paid-up, with a paid-up sum assured.
Continue for 2 years Policy continues for 2 years with original policy charges and benefits. If premiums are not paid within 2 years, it becomes a paid-up policy or can be surrendered.
Policy revival The policy can be revived within 2 years of the date of the last unpaid premium. At revival, the full policy benefits will be applicable.
Unit allocation The company allocate units in the funds as per the specification of the policyholder.
Discontinued Policy Fund During Discontinued Policy Fund period, the following will apply:
  • Fund management charge of 0.50% of the Discontinued Policy Fund.
  • A minimum guaranteed interest rate will be applied from the time the funds enter the Discontinued Policy Fund till the time they leave said fund.

Tax Benefits- How You Can Save With Reliance Nippon Life Classic Plan II

The Reliance Nippon Life Classic Plan II enables policyholders to save tax through investing in the policy in the following ways:

  • The amount paid towards the policy premiums are eligible for tax exemption under Section 80C of the Income Tax Act, 1961.
  • Benefits received from the policy such as survival benefit, maturity benefit, death benefit etc. are eligible for tax exemptions under Section 10 (10D) of the Income Tax Act of 1961.

It is to be noted, however, that tax rules are subject to change and it is advisable to consult with the company or an individual conversant with the latest tax laws for the current tax provisions.

Other Benefits- How You Can Save With Reliance Nippon Life Classic Plan II

The Reliance Nippon Life Classic Plan II provides policyholders with a range of features and benefits as part of the policy. In addition, policyholders can benefit from the following:

  • Online calculators that will compute the amount to be paid a premium amount as well as the projected amount to be received on maturity.
  • Premiums can be paid online, making it easier and hassle-free. Payments can be made through debit/credit card, NEFT, netbanking or through standing orders when paying online.
  • All information to the policy is available online, which the policyholder can access through the company website. This includes information on premium payments and fund-related information.
  • The claims processing procedure is simplified and can be initiated through a number of avenues, including online, making it easier for individuals to file a claim and track it. Claims can also be filed in person at a Reliance Nippon Life Insurance branch office.

Why you should buy the Reliance Nippon Life Classic Plan II from Reliance Nippon?

Reliance Nippon Life Insurance Limited is a relatively new entrant to the life insurance sector but has steadily distinguished itself as one of the key insurance providers in the country. The company was set up in 2001 as AMP Sanmar Life Insurance Company and was taken over by the Reliance Group in 2005. A joint venture between Reliance Capital, the parent company and Nippon Life was entered into in 2011. The company provides a range of life insurance products from savings and health plans to investment and ULIPs to customers.

Reliance Nippon blends the expertise of the Reliance Group, one of the largest business conglomerates in India and Nippon Life, one of the leading Japanese insurers to provide comprehensive insurance solutions to customers.

With a claim settlement ratio of 95.01% as on March 2016, the company has one of the best claim settlement ratios in the country. With over 800 branch offices across the country, Reliance Nippon Life Insurance assures accessibility coupled with its stellar customer service to ensure policyholders and customers receive the best service and range of products.