Aegon Religaire Future Protect Plus plan is a Unit Linked Insurance Plan (ULIP) from AEGON Religaire Life Insurance Company Limited with the objective of providing financial protection with return on investment.
After you decide on the amount of premium you want to pay each year and the amount of insurance to take, you can take this policy and invest your money across 4 funds that are available or opt for the Invest Protect option.
Let us do a quick review on Aegon Religaire Future Protect Plus plan – how good it is, what are the salient features it has which makes it stand out from other similar products and should you buy or not.
Aegon Religaire Future Protect Plus Plan is a Type II ULIP –
What that means is that the investor will get both the fund value and the sum assured as death benefit. This is better than Type I ULIPs where all you get is the fund value only.
Remember that the minimum premium paying term of five years is valid for this plan as is for all regular premium ULIPs. If discontinued before five years, discontinuance value is paid only after the fifth year.
The minimum premium can be Rs 20,000 in the annual mode and Rs 30,000 in monthly and semi-annual modes.
Entry age – minimum 7 years and maximum 60 years.
Maturity age – maximum 75 years.
Premium payment frequency – yearly, half yearly and monthly.
Minimum Sum Assured when age is less than 45 years – Higher of 10 times of regular annual premium or (0.5 x Policy Term x annual premium)
Minimum Sum Assured when age is more than 45 years – Higher of 7 times of regular annual premium or (0.25 x Policy Term x annual premium)
Term – 15/20/25/30/35/40 years.
Aegon Religaire Future Protect Plus plan has 4 fund options available for investors to invest in, starting from 100% fixed income to 100% equity depending on which choice the investor wants to take.
| Fund Type | Risk Return Profile | Allocation |
| Secure | Conservative | 100% Fixed Income |
| Debt | Relatively Safe | 100% Fixed Income |
| Stable | Moderate | 20% – 80% Equities |
| Accelerator | Aggressive | 80% – 100% Equities |
While you can actively make use of switches to hop across between these funds, there is a unique offering in this ULIP called the Invest Protect option which the investor can use. In this, your money is protected by systematically shifting the fund from Accelerator Fund to Secure Fund during the last 3 policy years.
This is immensely helpful as you need to park your money in safe investment avenues once you begin to near your financial goal.
In the auto-rebalancing feature, at the end of every policy year your fund value is re-allocated across the different funds in a proportion chosen by you.
The premium redirection features allows you to alter the premium allocation on all future premiums.
Four free switches are made available in this ULIP.
At certain important milestones in your life, like birth of a child or your marriage, your responsibility towards the family increases and for this you might want to opt for more life cover. This plan allows you to increase the life cover by 50% of the sum assured or Rs 10 lakh whichever is lower. You do not need to undergo medical tests at the time you opt for this enhanced sum assured option.
Accidental death rider and critical illness rider are available with this plan should you wish to opt for it.
On maturity, you can receive the entire fund value.
Should you not want it at one go, you can go for the Settlement Option, wherein you can receive the money over a period of time not exceeding 5 years.
Partial withdrawal is allowed after first 5 years and is limited to a maximum of 20% of the fund value at the beginning of that year. You can also avail of Systematic Partial Withdrawal facility by which the units will be redeemed periodically (any period you choose) from your unit account and money will be credited to your bank account.
Under Section 80C you can avail tax benefit. Yearly premium (not more than 1lac) will be deducted from taxable income.
Under Section 10(10D) death claim is completely tax free.
The premium allocation charge (PAC) is as follows :
| Year 1 | Year 2-5 | Year 6-10 | Year 11 onwards | |
| PAC | 4.40% | 3% | 2% | 1% |
Top up PAC is 3%.
Fund Management Charge (FMC) is as below :
| Fund Type | FMC |
| Secure | 1% |
| Debt | 1.10% |
| Stable | 1.35% |
| Accelerator | 1.35% |
Policy Administration Charge – This is a charge levied at the beginning of each policy month from the policy fund by cancelling units for equivalent amount. The charge is Rs 60/- per month, which will increase by 3% p.a.
After the 4 free switches in a year, Rs 500 per switch will be levied.
Partial withdrawal is free 4 times in a year, after which Rs 200 is charged per withdrawal. There is no charge for systematic withdrawal plan.
We have always believed that investors need to get out of the insurance is investment quagmire. Insurance is meant for risk protection so why use it for saving money for your future – there are better options like the systematic investment planning of mutual funds.
If you are a looking to buy, then avoid this plan as long as you discipline yourself to invest money for your future. This is not a bad product, it is an inefficient one for the goal you want to save money for !
If you have already invested and according to goal based investing, it’s for a long term goal, go for the all equity option. Stay invested in equity for the long haul because long term investing is all about staying with equity for a good duration of time. Move away to the debt options once your goal nears.
I am still trying to get hold of a sheet which will show me the net yield to the investor. Any help anyone can offer along with their thoughts on this plan, please shoot.
Radhey,
Good explanation. I too won’t buy this product. My investment horizon is very long term and i am more than happy investing in equity.
Rakesh
@Rakesh, Do you invest in stocks directly or via MFs ?
Radhey,
Yes I do invest in both stocks and MFs. I am more comfortable paying 1-2% charges to renowned fund managers of HDFC, DSP than paying 4% to Aegon Fund Managers. HDFC,DSP Fund managers have a very good track record over the years.
Rakesh
@Rakesh, That is fair enough – DSP and HDFC have some of the best fund managers.
Just for the sake of taking a contra view, why should one NOT go for this plan? With allocation charges being in the moderate zone, I would like to explore reasons which can potentially sway investors away from this plan.
@Jaswinder Singh, Wait till you lay hands on the details of actual returns from this plan – you would probably discover that MFs are returning you a better amount than this insurance plan.
Also, this defies the basic purpose of financial planning that insurance is not investment. Insurance should be taken only for risk cover.
Somewhat better than other ULIPs, have seen a similar plan from ICICI, it was I think some pension plan…..
Somehow, I always like MF for investment. And Term Plan for insurance as everyone knows who come to this site often :)…. If someone can’t really maintain decipline in the MF investment, than they should try this kind or lock-in kind of plans….. As you should not spend this money for other things.
@Chirag, Agreed – MFs are a better bet than insurance-cum-investment plans. Do you think that people who have already bought these plans shoudl exit ? Why ?