This scheme is beneficial for all those people who need money from time to time. In this scheme, money back is available three times before maturity.
New Delhi: Rural Postal Life Insurance (RPLI), which was introduced in 1995 to extend insurance cover to people living in the rural areas, offers various insurance endowments schemes that offer life cover along with higher tax-free return at lower premium. These schemes are beneficial for those who want to save small amounts for their future needs.
The ‘Gram Sumangal Rural Postal Life Insurance Scheme’ of RPLI is a money-back endowment plan that provides periodic fixed payout and a lumpsum at the time of maturity.
But in the case of the unexpected death of the insured person, such periodic payments will ot be taken into account and full sum assured with accrued bonus will be payable to the assignee, nominee or legal heir of the insurant
This scheme is beneficial for all those who need money from time to time. In this scheme, money back is available three times before maturity and the maximum sum assured that can be availed under this scheme is Rs 10 lakh.
This policy is available for two durations of 15 years and 20 years. The minimum age for availing of these policies is 19 years. The maximum age for availing of the 15-year-policy is 45 years, while for the 20-year-policy, the maximum age is 40 years.
In the 15-year policy, a bank customer gets 20% of the total sum assured as a money-back on completion of 6th year, 9th years, and 12th years and the remaining 40% of the money, including the bonus, will be paid to the customer on maturity after 15th year.
In the 20-year policy, the insurant will get 20% of the sum assured on completion of 8th year, 12th years, and 16th year. The remaining 40% of the money will be given to the customers on maturity with all accumulated bonuses after the 20th year.
How much return will you get?
If a 25-year-old person takes this policy for 20 years with a sum assured of Rs 10 lakh, he will have to pay an annual premium of Rs 57,350 for 10 years. One can also choose monthly, quarterly or half-yearly premium payment mode. But the premium will vary a little depending on the option you choose.
The customer will get Rs 2 lakh each at the end of the 8th, 12th, and 16th years. At the end of the 20th year, he/she will get Rs 4 lakh as the remaining part of the sum assured along with all accumulated bonuses. As per the RPLI website, the last declared bonus in this scheme was Rs 47 per Rs 1000 sum assured per year. If we assume this bonus amount will remain constant than the bonus amount that the policyholder will get at the time of maturity, in this case, is Rs 9.40 lakh.
So the customer will get a total return of Rs 19.40 lakh over the period of 20 years by paying a total premium of Rs 11.47 lakh over the 20 year period. If we put these numbers on an excel sheet then the Internal Rate of Return (IRR) comes to 6.41%, which is absolutely tax-free. As per Section 10(10D) of Income Tax Act, maturity proceeds of an insurance policy are exempt from capital gains tax.
Also, this return is 50 to 200 basis points higher than the IRR provided by private life insurers on similar products.
