Listen to this articleDo you want to create a secure future & comfortable lifestyle?
With the rising expense & life uncertainties, it is important to have insurance coverage & an investment plan to achieve future milestones.
ABSLI Akshaya Plan provides comprehensive health coverage along with a regular source of income.
Will this plan help to meet the rising expense or your growing needs?
Let us analyse the features & the working of this policy.
Table of Contents:
1.) An overview of ABSLI Akshaya Plan
2.) Feature of ABSLI Akshaya Plan
3.) Eligibility Criteria of ABSLI Akshaya Plan
4.) Benefits under ABSLI Akshaya Plan
5.) How to Cancel/Surrender ABSLI Akshaya Plan?
6.) Advantages of ABSLI Akshaya Plan
7.) Disadvantages of ABSLI Akshaya Plan
8.) Research Methodology on ABSLI Akshaya Plan
9.) Benefit Illustration Analysis of ABSLI Akshaya Plan
10.) Common Misconceptions About Participating Insurance Plans
11.) ABSLI Akshaya Plan vs. Other Investments
12.) Final Verdict on ABSLI Akshaya Plan
An overview of ABSLI Akshaya Plan
ABSLI Akshaya Plan is a non-linked participating, savings life insurance plan which offers life protection up to the age of 100 years.
It provides the benefit of a comprehensive life insurance cover along with a regular source of income to ensure the fulfilment of your family’s growing needs.
The cash bonus (if declared) can be received as pay-outs or allowed to accumulate.
From a long-term perspective, ABSLI Akshaya Plan is often positioned as a traditional guaranteed savings-oriented product where returns are driven largely by declared bonus rates rather than market performance, making it distinct from ULIP-based investment plans.
Feature of ABSLI Akshaya Plan
- Comprehensive life cover is available till the age of 100.
- Premium paying terms & policy terms can be chosen as per requirement.
- Two benefit options to choose from: Long Term income or Whole life income (till 100 or 85)
- The cash bonus can be received annually or allowed to accumulate till the maturity of the policy.
- Rider options will enhance the life cover at an extra cost.
The flexibility around cash bonus pay-out frequency is a key reason why ABSLI Akshaya Plan is often compared with other savings-oriented plans such as LIC Jeevan Akshay and HDFC Akshaya Plan.
Eligibility Criteria of ABSLI Akshaya Plan:
| Benefit Option | 1. Long-Term Income 2. Whole Life Income | |
| Once chosen at inception can’t be changed. | ||
| Premium Paying term | 6 /8 /10 /12 / 15 Years | |
| Policy term | Lifelong income option: 25 / 30 / 35 / 40 Years | |
| Whole Life income: Till the age of 100 or 85 years | ||
| Premium paying Mode | Annual / Semi-Annual / Quarterly / Monthly | |
| Minimum | Maximum | |
| Age at Entry | 30 days | 55 Years |
| Maturity Age | 18 | Lifelong income: 84 years |
| Whole life income: 100 or 85 years | ||
| Annualised premium | 24,000 | No Limit |
| Sum Assured | 1,54,560 | No Limit |
| Premium Band | Premium Bands | Annualised premium |
| Band 1 | 24,000 – 49,999 | |
| Band 2 | 50,000 – 99,999 | |
| Band 3 | 1,00,000 – 1,99,999 | |
| Band 4 | 2,00,000 – 2,99,999 | |
| Band 5 | 3,00,000 – 4,99,000 | |
| Band 6 | 5,00,000 + | |
Higher premium bands play a role in determining eligibility for additional cash bonus benefits, which can impact the overall maturity benefit under the ABSLI Akshaya Plan.
Benefits under ABSLI Akshaya Plan
Bonus:
Cash Bonus:
The cash bonus rate is declared as per 1000 sum assured on 1st July every year.
It is payable at the end of the policy year starting from the first year till maturity provided all premiums have been paid.
It is received at chosen frequency – Annual, Semi-annual, Quarterly or Monthly.
There is flexibility to defer the declared Cash Bonus and accrue them.
The deferred cash bonus can be withdrawn at the time of termination of the policy or it can be withdrawn at any time during the policy term.
The actual benefit from cash bonus depends on the bonus rate declared by Aditya Birla Sun Life Insurance, which may vary year-on-year based on the performance of the participating fund.
Interim Bonus:
Interim Bonus (if declared) may be payable, in case of death of the Life Insured, surrender, survival or maturity happens before the latest declared bonus rates would have come into effect.
Terminal Bonus:
If declared, the terminal bonus may be paid out before the life insured’s death, surrender, or maturity.
Terminal bonus is not guaranteed and generally depends on the long-term performance and persistency of the policy.
How Cash Bonus Declaration Impacts Long-Term Returns in ABSLI Akshaya Plan
In the ABSLI Akshaya Plan, cash bonuses play a crucial role in shaping overall returns, but they also introduce uncertainty.
These bonuses are not guaranteed and are declared annually based on the insurer’s performance, surplus, and prevailing economic conditions.
While the illustration assumes bonus rates of 4% and 8%, the actual bonus declared each year can be higher or lower, directly affecting the effective IRR of the policy.
Another important aspect is timing and usage of cash bonuses.
Since the pay-outs begin after the premium-paying term, many policyholders tend to treat them as supplementary income and spend them on routine or discretionary expenses.
If these cash bonuses are not reinvested, the power of compounding is lost, further reducing long-term wealth creation.
Even when reinvested, finding avenues that consistently deliver inflation-beating returns becomes essential to offset the relatively modest pay-out amounts.
Over a long policy term, this dependence on yearly bonus declarations makes returns less predictable compared to growth-oriented investments.
As a result, while cash bonuses may provide psychological comfort and periodic liquidity, they significantly limit the plan’s ability to generate strong long-term returns and keep pace with inflation.
Death Benefit:
In the event of the death of the Life Insured during the Policy Term, provided that the Policy is in force the following benefits are given to your nominee(s):
- Sum Assured on Death; and,
- Accumulated Cash Bonus (if declared); and,
- Terminal Bonus (if declared)
Sum Assured on Death shall be defined as higher of the following:
- Sum Assured
- 11 times the Annualized Premium
- 105% of Total Premiums paid till the date of death
This structure ensures compliance with life insurance guidelines while offering a minimum level of protection irrespective of bonus declaration.
Maturity Benefit:
On survival of the Life Insured till the end of the Policy Term provided the Policy is in force the following will be payable:
- Sum Assured; and,
- Accumulated Cash Bonus (if declared); and,
- Terminal Bonus (if declared)
The maturity benefit is influenced primarily by accumulated bonuses, making the internal rate of return (IRR) dependent on long-term bonus consistency.
Other Benefits
Riders:
ABSLI Accidental Death Benefit Rider Plus (UIN: 109B023V02)
ABSLI Critical Illness Rider (UIN: 109B019V03)
ABSLI Surgical Care Rider (UIN: 109B015V03)
ABSLI Hospital Care Rider (UIN: 109B016V03)
ABSLI Waiver of Premium Rider (UIN:109B017V03)
Riders enhance risk protection but increase the overall premium outgo, which should be evaluated separately from the savings component.
Policy Loan:
A loan against the policy is allowed once it has acquired a Surrender Value.
The minimum loan amount is Rs. 5,000 and the maximum is 80% of the then applicable Surrender Value less any outstanding policy loan plus all accrued but unpaid loan interest as of that date.
Loan availability improves liquidity, though it may reduce the final pay-out if interest accumulates over time.
Benefits for higher premium bands:
For higher premium bands, an additional cash bonus (% of Annualized Premium) shall be provided.
This feature makes ABSLI Akshaya Plan more attractive for higher-ticket investors seeking enhanced bonus potential.
The grace period, Revival, Discontinuance
Grace period:
A Grace Period of 30 (thirty) days from the premium due date & 15 (fifteen) days in case of Monthly mode) for payment of each premium will be allowed.
Revival:
Revival of policy is allowed within a revival period of five years from the due date of the first unpaid premium.
Discontinuance:
The policy will acquire a Surrender Value after all due premiums for at least the first full policy year are paid.
Discontinuance of Payment of Premium before the policy has acquired Surrender Value:
On the expiry of the grace period, the Policy shall lapse w.e.f. the due date of unpaid premium and all benefits under the policy, including the insurance cover, shall cease and no benefits shall be payable. There is an option to revive within the revival period of 5 Years.
Discontinuance of Payment of Premium after the policy has acquired Surrender Value -On the expiry of the grace period, the policy shall become a Reduced Paid-Up (RPU) policy.
Reduced Paid-Up status lowers future benefits proportionately, impacting long-term income expectations.
How to Cancel/Surrender ABSLI Akshaya Plan?
Free Look Period
In case you are not satisfied with the terms & conditions of your policy, you have the right to return your policy within 30 days from the date of receipt of the policy document.
Surrender
The policy will acquire a Surrender Value after all due premiums for at least the first full policy year are paid.
The policy can be surrendered at any time during the Policy Term once the policy has acquired a Surrender Value.
Early surrender may lead to lower returns, especially if bonuses have not sufficiently accumulated.
Advantages of ABSLI Akshaya Plan:
- The policy term & life cover can be chosen based on the requirement.
- The cash bonus accrual option helps to reap the benefit of compounding.
- A loan facility ensures liquidity.
- Flexibility in choosing the frequency of premium payment & cash bonus receipt.
The plan suits individuals looking for disciplined savings with periodic income rather than aggressive wealth creation.
The disadvantage of the ABSLI Akshaya Plan:
- The benefit option & cash bonus option chosen at the inception can’t be altered.
- All bonuses – Cash, Interim & Terminal are not guaranteed.
- The lock-in period is 1 year for loan & surrender.
Returns may not always beat inflation, especially if bonus rates remain subdued over the long term.
Research Methodology on ABSLI Akshaya Plan:
From the beginning, we have seen all the key points that we need to know about ABSLI Akshaya Plan.
Yet, these details are not enough for us to decide whether this plan is suitable for us or not.
So now, we are going to take this analysis to the next level to see how much IRR we can get from this plan.
At this stage, it becomes important to move beyond features and understand the actual return potential of the Aditya Birla Sun Life Insurance Akshaya Plan over a long-term horizon.
At this level, first, we are going to use ABSLI Akshaya Plan online calculator to calculate the IRR.
Then, we are going to use the same value to calculate how much IRR we can get from other investments.
Later, we can simply compare the results to see whether ABSLI Akshaya Plan gives us a better result or not.
This approach helps investors evaluate whether ABSLI Akshaya Plan details align with long-term wealth creation expectations rather than just guaranteed-looking projections.
Benefit Illustration Analysis of ABSLI Akshaya Plan:
Let us understand the cash flow of the policy with the following benefit illustration.
| Male | 35 years |
| Benefit option | Long-term Income |
| Policy term | 30 years |
| Premium Paying term | 10 Years |
| Sum Assured | 11,04,000 |
| Annualised premium | Rs. 1 Lakh |
| Cash bonus frequency | Annual |
|
|
|
At 4% p.a. |
At 8% p.a. |
||
|
Age |
Year |
Annualised premium / Maturity benefit |
Death benefit |
Annualised premium / Maturity benefit |
Death benefit |
|
35 |
1 |
-1,00,000 |
11,04,000 |
-1,00,000 |
11,04,000 |
|
36 |
2 |
-82,446 |
11,04,000 |
-62,685 |
11,04,000 |
|
37 |
3 |
-82,446 |
11,04,000 |
-62,685 |
11,04,000 |
|
38 |
4 |
-82,446 |
11,04,000 |
-62,685 |
11,04,000 |
|
39 |
5 |
-82,446 |
11,04,000 |
-62,685 |
11,04,000 |
|
40 |
6 |
-82,446 |
11,04,000 |
-62,685 |
11,04,000 |
|
41 |
7 |
-82,446 |
11,04,000 |
-62,685 |
11,04,000 |
|
42 |
8 |
-82,446 |
11,04,000 |
-62,685 |
11,04,000 |
|
43 |
9 |
-82,446 |
11,04,000 |
-62,685 |
11,04,000 |
|
44 |
10 |
-82,446 |
11,04,000 |
-62,685 |
11,04,000 |
|
45 |
11 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
46 |
12 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
47 |
13 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
48 |
14 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
49 |
15 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
50 |
16 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
51 |
17 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
52 |
18 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
53 |
19 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
54 |
20 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
55 |
21 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
56 |
22 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
57 |
23 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
58 |
24 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
59 |
25 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
60 |
26 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
61 |
27 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
62 |
28 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
63 |
29 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
64 |
30 |
17,554 |
11,04,000 |
37,315 |
11,04,000 |
|
65 |
11,87,794 |
|
14,17,315 |
|
|
|
|
|
|
|
|
|
|
|
IRR |
2.67% |
|
5.73% |
|
Assumed investment return rates: 4% p.a. and 8% p.a. Here the investment returns are not guaranteed.
They do not represent the maximum or minimum amount you could be reimbursed because the value of your policy is based on a variety of variables, including future investment performance.
These assumed rates are only indicative and should not be confused with ABSLI Akshaya Plan bonus rates or guaranteed income figures.
With the given cash bonus rate, the IRR works out to be 2.67 (for 4%) & 5.73% (for 8%).
These are not guaranteed. The policy term is 30 years. There is a cash payout during this period.
Since the ABSLI Akshaya Plan offers regular cash bonuses, the effective compounding impact on wealth creation reduces over time.
The policyholder might tend to spend the cash bonus for discretionary expenses as this amount may not suffice to meet the short-term goals.
The IRR of the ABSLI Akshaya plan is not an inflation-beating return.
This highlights a key limitation of Akshaya savings plans when evaluated purely from a long-term investment perspective.
Common Misconceptions About Participating Insurance Plans
Participating insurance plans are often perceived as products that deliver steady and predictable returns over the long term.
However, this assumption does not always reflect how such plans actually function.
Returns from participating plans are linked to bonus declarations, which depend on factors such as insurer surplus, fund performance, expenses, and overall market conditions.
As a result, the benefits illustrated at the time of purchase are projections and not assured outcomes.
Another common misunderstanding is that participating plans automatically provide inflation protection.
While these plans offer a combination of insurance cover and periodic pay-outs, the effective returns may vary significantly over the policy tenure.
If bonuses declared over the years are modest, the long-term IRR may struggle to keep pace with rising living costs, especially for policies with long durations.
There is also a tendency to view participating plans as comparable to traditional savings or market-linked investments.
In reality, they follow a different structure, where liquidity, flexibility, and return potential are influenced by policy terms such as premium-paying period, policy term, and bonus utilisation.
Understanding these aspects helps set realistic expectations about how participating insurance plans work and what role they may play within an overall financial strategy.
ABSLI Akshaya Plan vs. Other Investments:
One of the best ways to beat inflation is to invest in asset classes whose return outpace the rate of inflation.
In the above illustration, the IRR is below the inflation rate.
When compared with market-linked options, the ABSLI Akshaya Plan review indicates relatively modest return expectations.
There are better investment options which have a risk-adjusted return in the market.
These investments will help to achieve your goals.
ABSLI Akshaya Plan Vs. ELSS
Investors can protect their savings from the threat of inflation by investing in high-yielding instruments.
Investing in an ELSS mutual fund earns better returns and also has tax benefits.
This comparison allows investors to understand how Aditya Birla Akshaya Plan performs against equity-oriented savings instruments.
Similar to the illustration above let us assume an annual cash flow of Rs. 1 lakh.
This amount is split & invested in Term insurance for life cover & ELSS for investment.
| Pure-term insurance: | |
| Sum Assured | 11 lakhs |
| Tenure | 30 years |
| Premium paying term | 10 Years |
| Annual premium | 13500 |
| ELSS investment | 86500 |
| Total Annual cash outflow | Rs. 1 lakh |
| ABSLI Akshaya plan – At 8% p.a. | Term insurance + ELSS | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 35 | 1 | -1,00,000 | 11,04,000 | -1,00,000 | 11,04,000 |
| 36 | 2 | -62,685 | 11,04,000 | -62,685 | 11,04,000 |
| 37 | 3 | -62,685 | 11,04,000 | -62,685 | 11,04,000 |
| 38 | 4 | -62,685 | 11,04,000 | -62,685 | 11,04,000 |
| 39 | 5 | -62,685 | 11,04,000 | -62,685 | 11,04,000 |
| 40 | 6 | -62,685 | 11,04,000 | -62,685 | 11,04,000 |
| 41 | 7 | -62,685 | 11,04,000 | -62,685 | 11,04,000 |
| 42 | 8 | -62,685 | 11,04,000 | -62,685 | 11,04,000 |
| 43 | 9 | -62,685 | 11,04,000 | -62,685 | 11,04,000 |
| 44 | 10 | -62,685 | 11,04,000 | -62,685 | 11,04,000 |
| 45 | 11 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 46 | 12 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 47 | 13 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 48 | 14 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 49 | 15 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 50 | 16 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 51 | 17 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 52 | 18 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 53 | 19 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 54 | 20 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 55 | 21 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 56 | 22 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 57 | 23 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 58 | 24 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 59 | 25 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 60 | 26 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 61 | 27 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 62 | 28 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 63 | 29 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 64 | 30 | 37,315 | 11,04,000 | 37,315 | 11,04,000 |
| 65 | 31 | 14,17,315 | 66,26,624 | ||
| IRR | 5.73% | 10.53% | |||
After paying a premium of Rs.13,500 for a pure term, the balance amount of Rs. 86,500 is invested in ELSS in the first 10 years.
In the ABSLI Akshaya plan, a Cash bonus is receivable at the end of every policy year.
In contrast, ELSS investments benefit from long-term compounding, even with periodic withdrawals.
Similarly, under ELSS also annual withdrawal is assumed. The IRR for the ELSS investment works out to be 10.53% (Post-tax return).
This comparison clearly shows the difference between a participating insurance plan and an equity-based investment strategy.
This shows that investing in an Equity mutual fund can beat inflation in the long run.
Capital gains tax is not calculated for annual withdrawal, as there is annual exemption for ₹ 1.25 Lakhs. Tax calculation for the final redemption is given below.
|
ELSS Tax Calculation |
|
|
Maturity value after 30 years |
74,31,856 |
|
Purchase price |
8,65,000 |
|
Long-Term Capital Gains |
65,66,856 |
|
Exemption limit |
1,25,000 |
|
Taxable LTCG |
64,41,856 |
|
Tax paid on LTCG |
8,05,232 |
|
Maturity value after tax |
66,26,624 |
This further strengthens the case for separating insurance and investment objectives rather than combining both in a single savings insurance plan.
Final Verdict on ABSLI Akshaya Plan:
ABSLI Akshaya plan has a cash bonus in the form of pay-outs.
This will help to meet only short-term goals or any big-shot annual expenses.
They are not guaranteed.
It is payable only based on the year-on-year declaration.
The ABSLI Akshaya Plan features are more aligned towards income distribution rather than long-term wealth accumulation.
This will not help to meet any important life goals. And the IRR is also not high yielding.
An investment should allow your savings to grow faster or at least at the same rate of inflation.
Otherwise, savings will not be enough to fulfil your dreams.
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