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Can the Bajaj Allianz Life Invest Assure Plan help you achieve your financial goals?
Is the Bajaj Allianz Life Invest Assure Plan a suitable option for growing your savings?
Could the Bajaj Allianz Life Invest Assure Plan be a key component of your investment portfolio?
In this article, we will explore the features, advantages, and disadvantages of the Bajaj Allianz Life Invest Assure plan, along with an analysis of potential returns through IRR (Internal Rate of Return). Let’s set sail on this journey together.
Table of Contents:
What is the Bajaj Allianz Life Invest Assure Plan?
What are the Features of the Bajaj Allianz Life Invest Assure Plan?
Who is Eligible for the Bajaj Allianz Life Invest Assure Plan?
What are the benefits of the Bajaj Allianz Life Invest Assure Plan?
Grace Period, Discontinuance and Revival of the Bajaj Allianz Life Invest Assure Plan
Surrendering the Bajaj Allianz Life Invest Assure Plan
What are the advantages of the Bajaj Allianz Life Invest Assure Plan?
What are the disadvantages of the Bajaj Allianz Life Invest Assure Plan?
Research Methodology of the Bajaj Allianz Life Invest Assure Plan
Benefit illustration – IRR Analysis of Bajaj Allianz Life Invest Assure Plan
Bajaj Allianz Life Invest Assure Plan Vs. Other investments
Bajaj Allianz Life Invest Assure Plan Vs. Pure Term + ELSS
Final verdict on Bajaj Allianz Life Invest Assure Plan
What is the Bajaj Allianz Life Invest Assure Plan?
Bajaj Allianz Life Invest Assure Plan is a Non-linked Participating Endowment Life Insurance Plan. Bajaj Allianz Life Invest Assure Plan helps you and your family easily work towards your life goals.
Further financial security or life cover helps your family stay on track with their life goals, even in your absence.
What are the Features of the Bajaj Allianz Life Invest Assure Plan?
- Option to choose 1.25 times or 2 times of Sum Assured as life cover
- Compound reversionary Bonus and terminal Bonus enhance your benefit value
- Limited premium payment term
- Option to take death benefit in monthly instalments
- More value for money with a high sum assured rebate
- Option to enhance your coverage with rider benefits
Who is Eligible for the Bajaj Allianz Life Invest Assure Plan?
| Minimum age at Maturity | 18 years | |
| Maximum age at Maturity | 70 years | 65 years |
| Minimum Policy Term | 17 years | 15 years |
| Maximum Policy Term | 40 years | |
| Premium Paying term | Policy Term | Premium Paying Term |
| Premium Paying term – Silver Variant | 17 to 19 years | 7 & Policy term minus 10 |
| 20 to 24 years | 7, 10 & Policy term minus 10 | |
| 25 to 40 years | 7, 10, 15 & Policy term minus 10 | |
| Premium Paying term – Gold Variant | 15 to 19 years | 5, 7 & Policy term minus 10 |
| 20 to 24 years | 5, 7, 10 & Policy term minus 10 | |
| 25 to 40 years | 5, 7, 10, 15 & Policy term minus 10 | |
| Maximum Premium Paying term | 30 years | |
| Minimum Sum Assured | ₹ 1,00,000 | |
| Maximum Sum Assured | No Limit | |
| Premium Payment Frequency | Yearly, Half-yearly, Quarterly and Monthly | |
What are the benefits of the Bajaj Allianz Life Invest Assure Plan?
i.) Maturity Benefit
On the maturity date, if all premiums are paid, the Sum Assured plus vested Bonus (if any) and terminal Bonus (if any), will be paid.
ii.) Death benefit
If all due premiums are paid, then, in case of unfortunate death of the life assured during the Bajaj Allianz Life Invest Assure Plan policy term, the Sum Assured on Death plus vested Bonus (if any), plus terminal Bonus (if any), will be payable.
The Sum Assured on Death is the higher of:
- 10 times of annualised premium OR
- 105% of total premium paid till date of death OR
- 1.25 times or 2 times of Sum Assured.
Grace Period, Discontinuance and Revival of the Bajaj Allianz Life Invest Assure Plan
Grace Period
A grace period of 30 days for premium payment frequencies other than monthly and 15 days for monthly frequency will be allowed to pay the due premium.
Discontinuance
If you have not paid the First 2 years’ premium, then your Bajaj Allianz Life Invest Assure Plan policy will immediately lapse at the expiry of the grace period.
If you have paid the First 2 years’ premium, then your Bajaj Allianz Life Invest Assure Plan policy will be converted to a paid-up policy with a Reduced Sum Assured.
Revival
You may revive your paid-up/lapsed policy during the revival period of 5 years from the due date of the first unpaid premium.
Free look period of the Bajaj Allianz Life Invest Assure
if you disagree with any of the terms & conditions, you will have the option to return the policy within 15 days of the receipt of this policy and 30 days in case of electronic policy and policy obtained through distance mode.
Surrendering the Bajaj Allianz Life Invest Assure plan
You will have the option to surrender your policy provided at least 2 years premium have been paid. The surrender value shall be higher than the Guaranteed Surrender Value (GSV) and the Special Surrender Value (SSV).
What are the advantages of the Bajaj Allianz Life Invest Assure Plan?
- You can avail loan under your policy, subject to a maximum of 90% of the surrender value.
- The plan offers an attractive premium discount for a high sum assured
- Additional riders can be added to the base policy
- Option to change the prevailing premium payment mode under the policy at any time
- Option to take the death benefit in equal monthly instalments over a period of 5 or 10 years
What are the disadvantages of the Bajaj Allianz Life Invest Assure Plan?
- The return on investment is poor.
- The bonuses are non-guaranteed amounts.
Research Methodology of the Bajaj Allianz Life Invest Assure Plan
In the Bajaj Allianz Invest Assure Plan, after completing the limited premium payment period, you receive the maturity benefit at the end of the policy term based on the bonus declarations.
The potential returns of the plan are estimated using the figures provided in the policy brochure.
The Internal Rate of Return (IRR) calculation helps to evaluate the cash flow pattern and return percentage.
Benefit illustration – IRR Analysis of Bajaj Allianz Life Invest Assure Plan
Consider a 27-year-old male who purchases the Bajaj Allianz Life Invest Assure plan with a Sum Assured of ₹5 lakhs. The Bajaj Allianz Life Invest Assure Plan policy term is 23 years, and the premium payment term is 13 years, with an annual premium of ₹28,790.
| Male | 27 years |
| Sum Assured | ₹ 5,00,000 |
| Policy Term | 23 years |
| Premium Paying Term | 13 years |
| Annualised Premium | ₹ 28,790 |
The maturity benefit at the end of the Bajaj Allianz Life Invest Assure Plan policy term varies based on the bonus declarations. The bonus rates at 8% and 4% are not guaranteed and are for illustrative purposes only.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 27 | 1 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 28 | 2 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 29 | 3 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 30 | 4 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 31 | 5 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 32 | 6 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 33 | 7 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 34 | 8 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 35 | 9 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 36 | 10 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 37 | 11 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 38 | 12 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 39 | 13 | -28,790 | 10,00,000 | -28,790 | 10,00,000 |
| 40 | 14 | 0 | 10,00,000 | 0 | 10,00,000 |
| 41 | 15 | 0 | 10,00,000 | 0 | 10,00,000 |
| 42 | 16 | 0 | 10,00,000 | 0 | 10,00,000 |
| 43 | 17 | 0 | 10,00,000 | 0 | 10,00,000 |
| 44 | 18 | 0 | 10,00,000 | 0 | 10,00,000 |
| 45 | 19 | 0 | 10,00,000 | 0 | 10,00,000 |
| 46 | 20 | 0 | 10,00,000 | 0 | 10,00,000 |
| 47 | 21 | 0 | 10,00,000 | 0 | 10,00,000 |
| 48 | 22 | 0 | 10,00,000 | 0 | 10,00,000 |
| 49 | 23 | 0 | 10,00,000 | 0 | 10,00,000 |
| 50 | 5,00,000 | 8,34,116 | |||
| IRR | 1.71% | 4.73% | |||
Under the 4% bonus scenario, the final maturity value at the end of the policy term is ₹5 lakhs, yielding an IRR of 1.71% as per the Bajaj Allianz Life Invest Assure Plan maturity calculator.
Under the 8% bonus scenario, the final maturity value is ₹8.34 lakhs, resulting in an IRR of 4.73% as per the Bajaj Allianz Life Invest Assure Plan maturity calculator.
The potential returns calculation for the Bajaj Allianz Life Invest Assure Plan suggests that it may not be advantageous for investors. Despite the 23-year policy term, the returns generated do not even match those of a typical debt instrument.
This indicates that investing in the Bajaj Allianz Life Invest Assure Plan may not effectively grow your savings into a substantial corpus.
Bajaj Allianz Life Invest Assure Plan Vs. Other investments
As discussed earlier, the potential returns from the Bajaj Allianz Life Invest Assure Plan do not surpass the inflation rate. Let’s now consider an alternative scenario with a similar cash outflow as the previous illustration.
In the earlier example, the sum assured is ₹5 lakhs, with a death benefit of twice that amount, necessitating a term insurance policy with a sum assured of ₹10 lakhs.
Bajaj Allianz Life Invest Assure Plan Vs. Pure Term + PPF
Based on the calculations, opting for a term plan coupled with a PPF investment appears more financially favourable.
The Bajaj Allianz Life Invest Assure, even under the 8% bonus scenario, yields an IRR of 4.73%, which is lower than the PPF’s guaranteed 7.1% return. Additionally, PPF offers government-backed security, further enhancing its reliability.
Therefore, the combination of a term plan and PPF investment presents a potentially higher return with greater security, making it a more attractive choice for long-term financial planning.
Bajaj Allianz Life Invest Assure Plan Vs. Pure Term + ELSS
A pure term insurance policy with a sum assured of ₹10 lakhs costs a premium of ₹6,500. The Bajaj Allianz Life Invest Assure Plan policy term is 23 years, with a premium payment term of 10 years. In the previous illustration, the premium payment term was 13 years.
Therefore, out of ₹28,790 annually for the first 10 years, the insurance premium is paid first, and the remaining amount is invested. In the next 3 years, the full amount is invested, and in the final 10 years, the investment is allowed to grow.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 5,00,000 |
| Policy Term | 23 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 6,500 |
| Investment | ₹ 22,290 |
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 27 | 1 | -28,790 | 10,00,000 |
| 28 | 2 | -28,790 | 10,00,000 |
| 29 | 3 | -28,790 | 10,00,000 |
| 30 | 4 | -28,790 | 10,00,000 |
| 31 | 5 | -28,790 | 10,00,000 |
| 32 | 6 | -28,790 | 10,00,000 |
| 33 | 7 | -28,790 | 10,00,000 |
| 34 | 8 | -28,790 | 10,00,000 |
| 35 | 9 | -28,790 | 10,00,000 |
| 36 | 10 | -28,790 | 10,00,000 |
| 37 | 11 | -28,790 | 10,00,000 |
| 38 | 12 | -28,790 | 10,00,000 |
| 39 | 13 | -28,790 | 10,00,000 |
| 40 | 14 | 0 | 10,00,000 |
| 41 | 15 | 0 | 10,00,000 |
| 42 | 16 | 0 | 10,00,000 |
| 43 | 17 | 0 | 10,00,000 |
| 44 | 18 | 0 | 10,00,000 |
| 45 | 19 | 0 | 10,00,000 |
| 46 | 20 | 0 | 10,00,000 |
| 47 | 21 | 0 | 10,00,000 |
| 48 | 22 | 0 | 10,00,000 |
| 49 | 23 | 0 | 10,00,000 |
| 50 | 20,65,555 | ||
| IRR | 10.15% | ||
Choosing the right investment based on your risk tolerance is crucial. In this scenario, we choose an Equity-Linked Savings Scheme (ELSS) to invest the surplus. ELSS investment redemption incurs capital gains tax.
The pre-tax value and post-tax value are ₹22.49 lakhs and ₹20.65 lakhs, respectively. The IRR for this scenario is 10.15% (post-tax return). Tax calculation is given below.
| ELSS Tax Calculation | |
| Maturity value after 23 years | 22,49,587 |
| Purchase price | 3,09,270 |
| Long-Term Capital Gains | 19,40,317 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 18,40,317 |
| Tax paid on LTCG | 1,84,032 |
| Maturity value after tax | 20,65,555 |
This scenario highlights the advantage of separating insurance and investment. It offers better returns and liquidity compared to the Bajaj Allianz Life Invest Assure Plan.
Final verdict on Bajaj Allianz Life Invest Assure Plan
The Bajaj Allianz Invest Assure Plan is a participating limited pay endowment plan designed to provide financial protection for your family. However, despite its name, the assurance of a significant maturity benefit is questionable. The maturity benefit, combined with the bonus, is unlikely to keep up with the inflated costs of your long-term goals.
Understanding the importance of selecting a product with returns that exceed the inflation rate is crucial. Investing in the Bajaj Allianz Life Invest Assure Plan could hinder your path to financial success and also has a high agent commission
An alternative investment strategy highlights the importance of directing your surplus into suitable products to achieve your goals. A pure-term life insurance policy offers high coverage at an affordable premium, ensuring better financial protection.
Is it advisable to get financial advice only from websites like Quora, Facebook, and Twitter?
For personalized guidance on insurance and investment, consulting a Certified Financial Planner can be beneficial. They can help tailor a strategy to meet your specific needs and goals.
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