BackEdelweiss Tokio Life’s Save and Grow Plan and MultiGain Plan
As an insurance cover, these plans don't make much sense as there are cheaper plans like term plans.
Premium
What are they?
Both are life insurance plans. Save and Grow is an endowment plan that returns a lump sum on maturity and MultiGain plan is a money-back plan that pays maturity benefit in instalments during the term of the plan. Both are participating plans, which means that other than the sum assured that is also the guaranteed maturity benefit, you get a non-guaranteed bonus every year.
What do you get?
Save and Grow: If the policyholder dies within the first five years, the beneficiary will get the sum assured plus accrued bonus. This death benefit increases to 175% of the sum assured plus accrued bonuses if death occurs between the 26th and 30th years of the policy term. On maturity, the sum assured plus the accrued bonuses are paid.
MultiGain: If the policyholder dies during the policy term, the beneficiary gets the sum assured plus accrued bonuses. In this plan, the maturity benefit is staggered to provide the sum assured in five instalments through the policy term. At the end of the term, you get the last instalment along with accrued bonus.
What’s special?
These plans offer a discount on the premium for a sum assured of 1.5 lakh or above. Women get an additional benefit. An adult woman is charged a premium equal to that of a three years younger male policyholder.
The returns
Save and Grow: A 35-year-old opting for a sum assured of 10 lakh for a term of 25 years will have to pay a premium of 36,996 exclusive of service tax. Assuming that the participating fund grows at a rate of 6%, the total maturity benefit would come to 16 lakh. This is a net return of 4%. At an assumed rate of 10%, the net return comes to 7%. However, considering these plans invest largely in debt products, a 10% growth may not be a correct frame of reference.
MultiGain: For the same parameters mentioned above, the policyholder will have to pay an annual premium of 55,630, excluding service tax. The policyholder will get 10 lakh in four instalments of 2 lakh each at the end of every five years. On maturity, the policyholder will get another 2 lakh plus accrued bonuses. This bonus at an assumed rate of 6% will come to 7 lakh. This is a net return of just 3.38%.
Mint money take
As an insurance cover, these plans don’t make much sense considering there are cheaper plans such as term plans that would come at a premium of less than 3,000 for a sum assured of 10 lakh. Even as investments, these plans don’t make an impression. You are better off investing in Public Provident Fund for lump sum benefit. For the money-back benefit, consider fixed deposits or debt funds depending on your comfort.
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