DHFL Pramerica Life has recently launched a new participating non linked limited premium endowment plan. The plan offers guaranteed loyalty benefit of 10% of annualised premium each year after 2nd policy year onwards only during premium paying term. Plan offers only three premium paying terms i.e. 5,10 and 15 years. Minimum entry age in the plan is 8 years and maximum is 60 years. Minimum age at maturity is 18 years and maximum it is 75 years. Minimum sum assured is 1.70 lakhs for term of 15years and Rs. 2 lakhs for 25 and 35 years term and there is no upper limit on the maximum sum assured. Minimum annual premium requirement is Rs. 17,000. The plan also gives the option of choosing three different options for payment i.e. yearly, half yearly and monthly. The policy holder has to pay higher premium in case he/she chooses option other than yearly option. At maturity of the policy, the policyholder will receive a maturity benefit equal to 100% of base sum assured chosen at inception plus accrued reversionary bonus plus final bonus (loyalty addition) if any, subject to policy being in-force. Loan against policy is available in case of emergency.
The points to know before investing in the plan. The return is very poor as illustrated below and further service tax of 3.09% in first year and 1.545% thereafter will further reduce your return. The same can be understood with the help of following example. If a 35 year healthy male takes this plan for sum assured of Rs. 10lakhs, then his annual premium will be Rs. 1,24,740/- exclusive of service tax. He has to pay premium for 10 years only. The IRR is of the plan is only 5.08% (assuming total benefits @8% as per illustration) and the IRR is only 1.99% (assuming total benefits @4% as per illustration) which is calculated with the help of excel and using IRR formula. The detail is as under. The premium is taken inclusive of service tax.
Net Premium
|
Rs. 1,24,740
|
Guaranteed
|
benefit @8%
|
benefit @4%
|
Gross Premium
|
Benefit
|
Net Premium
|
Net Premium
|
|
1
|
1,28,594
|
-
|
-1,28,594
|
-1,28,594
|
2
|
1,26,667
|
12,474
|
-1,14,193
|
-1,14,193
|
3
|
1,26,667
|
12,474
|
-1,14,193
|
-1,14,193
|
4
|
1,26,667
|
12,474
|
-1,14,193
|
-1,14,193
|
5
|
1,26,667
|
12,474
|
-1,14,193
|
-1,14,193
|
6
|
1,26,667
|
12,474
|
-1,14,193
|
-1,14,193
|
7
|
1,26,667
|
12,474
|
-1,14,193
|
-1,14,193
|
8
|
1,26,667
|
12,474
|
-1,14,193
|
-1,14,193
|
9
|
1,26,667
|
12,474
|
-1,14,193
|
-1,14,193
|
10
|
1,26,667
|
12,474
|
-1,14,193
|
-1,14,193
|
11
|
-
|
-
|
||
12
|
-
|
-
|
||
13
|
-
|
-
|
||
14
|
-
|
-
|
||
15
|
-
|
-
|
||
16
|
-
|
-
|
||
17
|
-
|
-
|
||
18
|
-
|
-
|
||
19
|
-
|
-
|
||
20
|
-
|
-
|
||
21
|
-
|
-
|
||
22
|
-
|
-
|
||
23
|
-
|
-
|
||
24
|
-
|
-
|
||
25
|
-
|
-
|
||
Maturity Amount
|
32,32,758
|
17,35,168
|
||
IRR
|
5.08%
|
1.99%
|
