Reliance Life Highest NAV Advantage Plan Review

Reliance Life Highest NAV Advantage Plan Review

Reliance Life Insurance has launched Highest NAV Advantage Plan (Download PDF) in October 2010. So What it means by Highest NAV Advantage Plan and how it works?

Well, Highest NAV Advantage plan means once the fund NAV will touch any high number, that NAV will be locked and on maturity, you will minimum get that maximum NAV.

So How they achieve this?

Well, it is simple. Suppose if the Fund NAV touches to Rs.110 per unit which is the highest of all than the fund manager will pull out some amount of money (Usually 70:30) in such a manner and put it into debt that on maturity, the debt component will give at least the highest NAV secured.

Thus, over the time debt component of this plan increases.

Here are the Key Features of this Plan

- Enjoy the upside - We guarantee you get the highest NAV per unit ever achieved during the policy term at maturity.
- An additional amount equivalent to base sum assured is payable on account of accidental deaths
- Liquidity through partial withdrawals
- Option to avail policy loan after two years
- Flexibility to choose from - Regular, & Single premium payment options.
- Flexibility to pay top – ups
- A host of optional rider benefits to enhance protection cover

My Opinion,

In my opinion, if you are going to invest for the long time horizon say more than 5 years in equity than you should go for direct equity investing or equity mutual funds investing. This is because in the long run, the downside risk of equity is almost NIL.

Not only this but such kind of Highest NAV guarantee funds’ debt proportion will swell over the time and making them less profitable over the time. And this is the reason why you should not invest in this plan.

Remember,

Term Insurance + Equity Mutual Funds is the best combination.