ABSLI Assured Flexi Savings Plan Review: Good or Bad?

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Can the ABSLI Assured Flexi Savings Plan secure your financial future while maintaining the flexibility to adapt to life’s changes?

Can the ABSLI Assured Flexi Savings Plan provide both guaranteed returns and the freedom to adjust your savings plan according to your needs?

Is the ABSLI Assured Flexi Savings Plan the cushion you need or another roadblock in your investment journey?

This article will review the features, advantages, disadvantages, and returns of the ABSLI Assured Flexi Savings Plan using an Internal Rate of Return (IRR) analysis. By examining this review, you can make an informed decision about selecting the right investment products for your needs.

What is the ABSLI Assured Flexi Savings Plan?

ABSLI Assured Flexi Savings Plan is a Non-Linked Non-Participating Individual Life Insurance Savings Plan. ABSLI Assured Flexi Savings Plan offers you short flexible premium payment terms, to fit your requirements and fulfil your life goals. It also provides you with the flexibility of unlimited withdrawals up to the accrued amount.

What are the features of the ABSLI Assured Flexi Savings Plan?

You get Guaranteed Annual Income which is accrued in your ABSLI Assured Flexi Savings Plan policy at the beginning of each year after the deferment period.
An Income Booster equal to 5% of the accrued amount is added to your ABSLI Assured Flexi Savings Plan policy at the end of each year after the deferment period.
Loyalty Addition, as a percentage of the accrued amount is provided at the end of the ABSLI Assured Flexi Savings Plan policy term.
As an additional cushion to your savings, the accrued amount is enhanced by a further 10%.
You have the flexibility to withdraw money up to the Accrued Amount.

Who is eligible for the ABSLI Assured Flexi Savings Plan?

	Minimum	Maximum
Entry Age	4 / 6 / 8 / 11 years	60 years
Maturity Age	18 years	86 years
Premium Paying Term (PPT)	5 / 8 / 10 / 12 years
Deferred Period	2 years after completion of the premium paying term
Policy Term (PT)	PPT	PT
	5 years	15 & 17 years
	8 years	20 years
	10 years	22 years
	12 years	26 years
Annualised premium	₹ 50,000	No Limit
Minimum Sum Assured	₹ 5,50,000

What are the benefits of the ABSLI Assured Flexi Savings Plan?

i.) Survival benefit

After the completion of the Premium Paying Term and Deferred Period, you will receive the following survival benefits during the ABSLI Assured Flexi Savings Plan policy term.

A. Annual Income

An Annual Income as a percentage of the annualised premium shall accrue at the beginning of each year. Annual Income varies by Premium Payment Term and Life Insured’s age at the inception of the policy.

B. Income Booster

An Income Booster equal to 5% of the accrued amount is added to your ABSLI Assured Flexi Savings Plan policy at the end of each year during the policy term to grow your savings.

C. Loyalty Additions

You get Loyalty Addition, as a percentage of the accrued amount at the end of the ABSLI Assured Flexi Savings Plan policy term.

D. Return of Premium

At the end of the ABSLI Assured Flexi Savings Plan Policy Term, the Total Premiums Paid by you are payable along with the Accrued Amount and Loyalty Addition, if any. This amount is further enhanced by 10% if all due premiums under your policy have been paid.

ii.) Maturity benefit

The Maturity Benefit shall be the combination of Accrued Amount, Loyalty Additions & Enhanced Return of Premium benefit payable at the end of the ABSLI Assured Flexi Savings Plan Policy Term.

iii.) Death benefit

In case of the life insured’s unfortunate demise during the ABSLI Assured Flexi Savings Plan policy period, the following death benefit will be paid to the nominee

Sum Assured on Death; plus
Accrued Amount if any under the policy

where Sum Assured on Death is defined as higher of the following:

10 times of Annualized Premium
150% of Total Premiums paid till the date of death
Sum Assured

Grace period, Discontinuance and Revival of ABSLI Assured Flexi Savings Plan

Grace period

Grace Period means a period of 30 days or 15 days in case of Monthly Premium payment mode from the due date of each unpaid Premium.

Discontinuance

Your ABSLI Assured Flexi Savings Plan policy will acquire a surrender value after all due premiums for at least two full policy years are paid.

Discontinuance of Payment of Premium before the Policy has acquired surrender value: the ABSLI Assured Flexi Savings Plan policy shall Lapse w.e.f. the due date of unpaid premium, insurance cover will be stopped and no benefits shall be payable.

Discontinuance of Payment of Premium after the Policy has acquired surrender value: the ABSLI Assured Flexi Savings Plan policy shall become Reduced Paid Up (RPU) Policy w.e.f. the due date of unpaid premium.

RPU Sum Assured and RPU Annual Income shall be equal to the Sum Assured and Annual Income respectively, multiplied by the RPU Factor.

Revival

You can revive your ABSLI Assured Flexi Savings Plan Policy within a revival period of five years from the due date of the first unpaid premium.

Free Look Period of ABSLI Assured Flexi Savings Plan

You will have the right to return Your ABSLI Assured Flexi Savings Plan policy within 15 days (30 days in the case of electronic policies and the policies issued under Distance Marketing) from the date of receipt of the policy, in case You are not satisfied with the terms & conditions of Your policy.

Surrendering ABSLI Assured Flexi Savings Plan

Your ABSLI Assured Flexi Savings Plan policy will acquire a surrender value after all due premiums for at least two full policy years are paid. You can surrender the policy any time before the end of the Policy Term.

The Surrender Value payable will be higher than the Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV)

What are the advantages of the ABSLI Assured Flexi Savings Plan?

To enhance your risk coverage during the ABSLI Assured Flexi Savings Plan policy term, you can add riders for a nominal extra cost.
You can take a loan against your ABSLI Assured Flexi Savings Plan policy, with the maximum loan amount being 85% of the surrender value.
Flexibility to accumulate the Annual Income and withdraw the Accrued Amount partially/fully anytime during the ABSLI Assured Flexi Savings Plan Policy or withdraw as and when due.

What are the disadvantages of the ABSLI Assured Flexi Savings Plan?

The sum assured is insufficient to cover the family’s basic future needs.
The returns are relatively low.

Research Methodology of ABSLI Assured Flexi Savings Plan

Before investing in any product, it is wise to estimate the potential returns. We will calculate the returns of the ABSLI Assured Flexi Savings Plus to gain better insights and assess its suitability. Let’s determine the Internal Rate of Return (IRR) for the figures provided in the policy brochure.

Benefit illustration – IRR Analysis of ABSLI Assured Flexi Savings Plan

A 35-year-old male invests ₹1,00,000 annually in the ABSLI Assured Flexi Savings Plan. He opts for a 12-year Premium Payment Term and a 26-year Policy Term, with a sum assured of ₹13.50 Lakhs.

Male	35 years
Sum Assured	₹ 13,50,000
Policy Term	26 years
Premium Paying Term	12 years
Annualised Premium	₹ 1,00,000

After the deferment period, he accrues annual income and is entitled to receive the accrued annual income, return of premium, and loyalty additions at the end of the policy term. The final maturity value is ₹35.13 Lakhs with an IRR of 5.30% as per the ABSLI Assured Flexi Savings Plan maturity calculator

If he withdraws the annual income at regular intervals instead of accruing it, the returns will be even lower.

Age	Year	Annualised premium / Maturity benefit	Death benefit
35	1	-1,00,000	13,50,000
36	2	-1,00,000	13,50,000
37	3	-1,00,000	13,50,000
38	4	-1,00,000	13,50,000
39	5	-1,00,000	13,50,000
40	6	-1,00,000	13,50,000
41	7	-1,00,000	13,50,000
42	8	-1,00,000	13,50,000
43	9	-1,00,000	13,50,000
44	10	-1,00,000	13,50,000
45	11	-1,00,000	13,50,000
46	12	-1,00,000	13,50,000
47	13	0	13,50,000
48	14	0	13,50,000
49	15	0	13,50,000
50	16	0	13,50,000
51	17	0	13,50,000
52	18	0	13,50,000
53	19	0	13,50,000
54	20	0	13,50,000
55	21	0	13,50,000
56	22	0	13,50,000
57	23	0	13,50,000
58	24	0	13,50,000
59	25	0	13,50,000
60	26	0	13,50,000
61		35,13,579	13,50,000

	IRR	5.30%

This rate of return over a long period of 26 years is unfavourable for the investor. Long-term investments should outpace inflation to meet the rising costs of your goals.

Therefore, investing in the ABSLI Assured Flexi Savings Plan may fall short of generating the required corpus to achieve your financial objectives.

ABSLI Assured Savings Plan Vs. Other investments

The returns of the ABSLI Assured Flexi Savings Plan are comparatively lower than those of a typical debt instrument. For long-term investments, investors need higher-yielding products to ensure they meet all their financial milestones.

Additionally, the life coverage provided by the ABSLI Assured Flexi Savings Plan is inadequate. Let’s explore an alternative with separate insurance coverage and investment options based on the same metrics from the previous example.

ABSLI Assured Savings Plan Vs. Pure Term + ELSS

A pure-term life insurance policy with a sum assured of ₹13.50 Lakhs costs ₹15,500 annually. The policy term is 26 years, with a premium payment term of 10 years. By choosing this option, you could save ₹84,500 annually, which can be invested according to your preferences.

Pure Term Life Insurance Policy
Sum Assured	₹ 13,50,000
Policy Term	26 years
Premium Paying Term	10 years
Annualised Premium	₹ 15,500
Investment	₹ 84,500

In the previous illustration, the premium payment term was 12 years, whereas it is 10 years for the pure-term policy. For the first 10 years, after paying the premium, the remaining amount is invested, and for the following 2 years, the entire amount is invested.

Age	Year	Term Insurance premium + ELSS	Death benefit
35	1	-1,00,000	13,50,000
36	2	-1,00,000	13,50,000
37	3	-1,00,000	13,50,000
38	4	-1,00,000	13,50,000
39	5	-1,00,000	13,50,000
40	6	-1,00,000	13,50,000
41	7	-1,00,000	13,50,000
42	8	-1,00,000	13,50,000
43	9	-1,00,000	13,50,000
44	10	-1,00,000	13,50,000
45	11	-1,00,000	13,50,000
46	12	-1,00,000	13,50,000
47	13	0	13,50,000
48	14	0	13,50,000
49	15	0	13,50,000
50	16	0	13,50,000
51	17	0	13,50,000
52	18	0	13,50,000
53	19	0	13,50,000
54	20	0	13,50,000
55	21	0	13,50,000
56	22	0	13,50,000
57	23	0	13,50,000
58	24	0	13,50,000
59	25	0	13,50,000
60	26	0	13,50,000
61		1,03,22,146	13,50,000

	IRR	10.74%

Here, the ELSS fund is chosen for investment. The final pre-tax maturity value in the ELSS fund is ₹1.13 Crores. After accounting for capital gains tax, the final maturity value is ₹1.03 Crores, with an IRR of 10.74%.

ELSS Tax Calculation
Maturity value after 26 years	1,13,41,829
Purchase price	10,45,000
Long-Term Capital Gains	1,02,96,829
Exemption limit	1,00,000
Taxable LTCG	1,01,96,829
Tax paid on LTCG	10,19,683
Maturity value after tax	1,03,22,146

The significant difference in maturity value is due to the compounding effect, which works best over the long term. This compounding benefit is missing in the ABSLI Assured Flexi Savings Plan because it combines insurance and investment.

Final Verdict on ABSLI Assured Flexi Savings Plan

The ABSLI Assured Flexi Savings Plan offers guaranteed returns and the flexibility to access your corpus through unlimited withdrawals.

This flexibility, allowing you to withdraw every year or accrue and withdraw partially or fully whenever needed, is the plan’s primary feature. It enables you to design cash payouts based on your personal preferences.

However, the returns are not up to the mark, as they are significantly lower than those of debt instruments, making this plan unsuitable for long-term investment. Additionally, the life coverage provided is inadequate and also it has a high agent commission

Therefore, it is better to avoid investing in the ABSLI Assured Flexi Savings Plan due to its low returns and insufficient life coverage.

Life coverage is a crucial aspect of personal finance, better served by a pure-term life insurance policy. To achieve your goals and adapt to ever-changing needs, you need to build a resilient investment portfolio. Diversifying your investments is key to achieving this. When it comes to financial advice, are Quora, Facebook, and Twitter the final word?

Selecting the best-suited product is an essential part of financial planning. If you need assistance in choosing appropriate products, consult a Certified Financial Planner. They can help you select products wisely and build a resilient portfolio.

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ABSLI Assured Flexi Savings Plan Review: Good or Bad?

Table of Contents:

What is the ABSLI Assured Flexi Savings Plan?

What are the features of the ABSLI Assured Flexi Savings Plan?

Who is eligible for the ABSLI Assured Flexi Savings Plan?