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Reliance Life Insurance Pay Five Plan

What is the Plan all About?

Reliance Life Insurance Pay Five Plan is a unit linked insurance plan in which you need to pay just 5 annual premiums and reap policy benefits for 15 years. This plan provides you the benefit of market linked returns along with financial cover for your family.

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What are the Key Features?

  • Enjoy market-linked return plus insurance protection
  • 5 year limited premium payment option
  • Choose from 8 pure investment fund options
  • Top-up Premium facility available
  • Access cash through partial withdrawals
  • Avail policy loan after two years
  • Systematic Transfer Plan to mitigate market risk
  • Choose riders to enhance protection
  • 52 free switches are available free of cost
  • Premium re-direction facility
  • Optional riders to boost cover
  • Enjoy tax benefits

What are the Fund Investment Options?

This policy offers following 8 investment funds and you have the option to invest in any one or combination of fund options.

  • Life Equity Fund 3
  • Life Corporate Bond Fund 1
  • Life Money Market Fund 1
  • Life Gilt Fund 1
  • Life Infrastructure Fund 2
  • Life Energy Fund 2
  • Life Midcap Fund 2
  • Life Pure Equity Fund 2
  • Life Balanced Fund 1 (available for settlement option only)

What are the Plan Benefits?

Death Benefit

    In the event of death of the life assured while the policy is in-force, the Death Benefit payable is higher of Sum Assured under Base Plan and top-up plus, fund value under Base Plan and top-up is payable. The outstanding loan plus interest on outstanding loan is deducted prior making payment of the death benefit. The policy is terminated after payment of Death Benefit.

    The minimum death benefit should be at least 105% of the total premiums paid.

Maturity Benefit

    On survival of the life insured till the end of the policy term, the Fund Value under Base Plan and top-up is payable. The outstanding loan plus interest on outstanding loan is deducted before making payment of the maturity benefit. The policy gets terminated after payment of Maturity Benefit.

Settlement Option

    On maturity, you can opt to receive your money in installments over a maximum period of 5 years, after the date of maturity. You need to give the notice to the insurer at least 30 days prior the date of maturity. No life cover is applicable during this settlement period.

Exchange Option

    This option is available for existing policyholder after completion of the first five policy years. This option provides the policyholder the flexibility to transfer policy benefits to another plan wherein exchange option is available. This option needs to be exercised at least 30 days before the receipt of benefit under the policy.

Foreclosure of the Policies in-force

    For the policies in-force after completion of the first five policy anniversaries and if the fund value is less than the charges for the next month, the policy will then be foreclosed by paying the fund value available under the policy.

Foreclosure of policies with loan

    If at any time during the policy term, the outstanding loan and its interest is higher than 90% of the surrender value of the policy, the policy will then be foreclosed and the surrender value is payable after deduction of the outstanding loan and interest amount.

Systematic Transfer Plan (STP)

    STP helps in mitigating the risk arising due to volatile equity markets by averaging out your cost of purchase of units.

Top-Ups

    Facility for Top-up Premium is available through the entire policy term, except during the last five policy years. The minimum top-up premium is Rs 5,000. With payment of top-ups, you can increase the sum assured by 125% of the top up premium paid, if the age of the life assured is less than 45 years and it is 110% of the top ups premium paid, if the age of the life assured is 45 years or above.

    However the sum assured under the base plan and top up across all policies shall not exceed Rs 5 lacs, if the age of the life assured at the time of payment of top up is less than 12 years. The total top-up premium should not exceed 25% of the total premiums paid till that time.

Switching

    You can switch among 8 available fund options to suit your changing investment needs. This option can be exercised, when intimated the company in writing.

Premium Re-direction

    Premium Re-direction facility is available to alter future premium allocation and it will apply to your subsequent premiums.

Partial Withdrawal

    Partial Withdrawal is allowed from 6th policy year onwards (in case of minor lives, life assured attains 18 years). The minimum partial withdrawal amount allowed is Rs 5,000. The maximum partial withdrawal amount allowed shall not exceed 20% of the total fund value, provided the fund balance post such withdrawal should be at least equal to 125% of annualized premium.

    For top-up, The maximum partial withdrawal amount allowed shall not exceed 20% of the fund value, provided the fund balance post such withdrawal should be at least equal to 50% of the top-up premiums paid.

Bonus

    The plan is not eligible for the bonuses.

Loan Benefit

    The maximum loan amount that can be availed under this plan is up to 40% of the surrender value. The loan benefit is applicable after completion of two policy anniversaries, provided the policy is in-force.

Surrender Value

    Upon surrendering the policy with-in the lock-in period of 5 years, the Fund Value less applicable discontinuance charges is credited to the ‘Discontinued Policy Fund’ and it is refunded upon completion of the lock-in period. If the policyholder has availed loan under the base plan, the loan outstanding and the interest on loan outstanding will be recovered first from the surrender value and the balance if any will be paid to the policyholder. The discontinuance charge is not applicable on top-up premium.

    Upon surrendering the policy after the lock-in period of 5 years, the Fund Value as on the date of surrender is payable immediately.

Who can Buy the Plan?

Factor Minimum Maximum
Age (as on last birthday) 7 Years 65 Years
Age at Maturity 17 Years 75 Years
Policy Tenure 10/15 Years (age At Entry Is Up To 60 Years), 10 Years (age At Entry Is Above 60 Years) -
Premium Paying Term (PPT) 5 Years -
Premium Paying Mode Annually Only -
Premium Amount Rs 45,000 (annually For Limited Premium) No Limit. For The Polices Where The Age At Entry Is Greater Than Or Equal To 7 Years But Less Than 12 Years, The Annualised Premium Will Be Restricted Such That The Maximum Sum Assured Across All Policies With Reliance Life Is Rs 5 Lac
Sum Assured For Base Policy: >45 Years- Higher Of 10 Times Of The Annualized Premium Or 1/2 * Policy Term *Annualized Premium =&<45 Years- Higher Of 7 Times Of The Annualized Premium Or 1/4* Policy Term *Annualized Premium For Top Up Premium: >45 Years- Fixed Sum Assured Of 125% Of The Top Up Premium =&<45 Years- Fixed Sum Assured Of 110% Of The Top Up Premium For 7 To 11 Years- Rs 5 Lacs (across All Policies With Reliance Life) For 12 To 45 Years- 30 Times Of Annualized Premium For 46 To 50 Years- 20 Times Of Annualized Premium For 51 To 55 Years- 10 Times Of Annualized Premium =&<56 Years- 7 Times Of Annualized Premium For Top Up Premium: >45 Years- Fixed Sum Assured Of 125% Of The Top Up Premium =&<45 Years- Fixed Sum Assured Of 110% Of The Top Up Premium
Freelook Period 15 Days From The Receipt Of The Policy -
Grace Period 30 Days -
Plan Type Offline -

Is any Rider Available with this Plan?

Following riders can be opted, on payment of additional rider premium:

  • Reliance New Major Surgical Benefit Rider
  • Reliance New Critical Conditions (25) Rider
  • Reliance Term Life Insurance Benefit Rider
  • Reliance Accidental Death and Total and Permanent Disablement Rider
  • Reliance Life Insurance Family Income Benefit Rider

What are the Plan Charges?

Premium Allocation Charges: This charge is deducted from the premiums paid and the balance amount is then allocated to funds chosen. The premium allocation charge is 9.25%/6.50% for 1st policy year/2nd to 5th policy year, respectively. For top-up premium, the premium allocation charge is 2% of the top-up amount.

Policy Administration Charge: No Policy Administration Charge during the premium payment term. However, a charge of Rs 40 per month will be deducted after the premium payment term. If settlement option is selected, policy administration charge of Rs 40 per month will be deducted.

Mortality Charges: Mortality charge is deducted every month by cancellation of units from the fund value. It varies on the basis of age of the life insured, life insurance cover, occupation of life insured, health of the life insured.

Fund Management Charges: Fund management charge levied is a percentage of the Fund Value. It is 1.35% p.a for Life Equity Fund 3, Life Pure Equity Fund 2, Life Infrastructure Fund 2, Life Midcap Fund 2, & Life Energy Fund 2, 1.25% p.a for Life Corporate Bond Fund 1, Life Gilt Fund 1, Life Money Market Fund 1, & Life Balanced Fund 1.

Discontinuance Charge: This charge is levied, in case the policy is discontinued during the first 4 policy years. This charge is levied as applicable under the policy terms & conditions. For more details, please refer the policy brochure.

Switching Charge: 52 free switches are available free of cost during a policy year. A charge of Rs 100 is levied when opted for subsequent switching in the same policy year. No option is there to carry forward the unused switches.

Partial Withdrawal: A charge of Rs 100 is levied when opted for partial withdrawal.

Systematic Transfer Plan Charges: No such charge is levied for the first time Systematic Transfer Plan Option is effected for limited premium payment mode and top-up premium/s. Thereafter, a fixed charge of Rs 100 will be levied every time the STP Option is selected. There are no charges for cancellations of STP option. The charges will be deducted by cancellation of units from the fund value.

Rider Benefits Charges: Premium for rider benefits if chosen will be charged other than the basic premium applicable under the plan.

Service Tax: The charges mentioned under this plan are subject to applicable tax and cess, as applicable.

Is the Plan, eligible for Tax Benefit?

Premiums payable under this plan can avail tax benefit under section 80C of the Income Tax Act and the policy proceeds is eligible for tax benefits under section 10(10D) of the Income Tax Act, 1961.

How the Plan Works?

At 30 years, Rohit invests with Reliance Life Insurance Pay Five Plan with the policy term of 15 years, premium payment term of 5 years, annual premium of Rs 1,00,000 and sum assured of Rs 10,00,000.

Scenario A- Maturity Benefit: In case of his survival till maturity of the policy, the Fund Value under Base Plan and top-up is payable.

Scenario B- Death Benefit: In the unfortunate event of his death within the policy term, the Death Benefit payable is higher of Sum Assured under Base Plan and top-up plus, fund value under Base Plan and top-up is payable.