ABSLI Assured Income Plus Plan: Good or Bad? An Enlightening Review

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Can the ABSLI Assured Income Plus Plan offer assured returns and financial growth?

Could the ABSLI Assured Income Plus Plan be the perfect solution to help you achieve your retirement goals?

Will the ABSLI Assured Income Plus Plan provide the financial cushion you need at the right moment?

This article offers an in-depth review of the ABSLI Assured Income Plan, highlighting its features, advantages and disadvantages, and an analysis of its returns using the Internal Rate of Return calculation.

What is the ABSLI Assured Income Plus Plan?

ABSLI Assured Income Plus Plan is a non-linked non-participating individual savings life insurance plan. ABSLI Assured Income Plus Plan provides the benefit of life insurance coverage along with a regular income for 20, 25 or 30 years to ensure the fulfilment of Your family’s long-term goals and aspirations.

What are the features of the ABSLI Assured Income Plus Plan?

Flexibility to choose between two benefit options i.e. a) Income-only Benefit or b) Income with Lumpsum Benefit.
Get guaranteed regular income for a period of 20, 25 or 30 years to ensure the fulfilment of your recurring needs in the long term
Guaranteed Lumpsum Benefit, if applicable, shall be payable at the end of the benefit payout period, to boost your savings
Loyalty Additions as an additional boost to the Income Benefit pay-out
Flexibility to receive a discounted value of future survival benefits as a lump sum based on Your needs.

Who is eligible for the ABSLI Assured Income Plus Plan?

	Minimum	Maximum
Age at entry	1 year	60 years
Age at Maturity	18 years	77 years
Premium Paying Term	Policy Term	Benefit pay-out period
5 years	5, 6, 7, 8, 9, 10 years	20,25, 30 years
6 years	6, 7, 8, 9, 10, 11 years	20,25, 30 years
8 years	8, 9, 10, 11, 12, 13 years	20,25, 30 years
10 years	10, 11, 12, 13, 14, 15 years	20,25, 30 years
12 years	12, 13, 14, 15, 16, 17 years	20,25 years
Annualised premium	₹ 50,000	No Limit
Sum Assured	₹ 5,50,000	Subject to Board approval
Benefit pay-out frequency	Annual, Semi-Annual, Quarterly, Monthly

What are the benefits of the ABSLI Assured Income Plus Plan?

i.) Death benefit

In the unfortunate event of Death of the Life Insured anytime during the ABSLI Assured Income Plus Plan policy term, the Sum Assured on Death shall be payable as a lump sum to the nominee.

Sum Assured on Death is defined as higher of:

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

ii.) Survival benefit

On surviving till the end of the ABSLI Assured Income Plus Plan policy term, Income Benefit is payable to you for 20, 25 or 30 years at the end of the period (monthly, quarterly, half-yearly or annually) as per the Benefit Payout Frequency chosen.

Income-only benefit option: Income Benefit, expressed as a percentage of Annualized Premium, will be paid to you

Income with Lumpsum Benefit: Income Benefit, expressed as a percentage of Annualized Premium will be paid to you. Additionally, at the end of the Benefit payout period, a Guaranteed Lumpsum Benefit will also be payable.

Where, Guaranteed Lumpsum Benefit refers to the Total Premiums Paid by you multiplied by the applicable Lumpsum factor as specified below.

Premium Paying Term	Lump sum benefit factor
5 years	55%
6 years	55%
8 years	55%
10 years	60%
12 years	60%

Guaranteed Lumpsum Benefit will be further enhanced by 100%, provided all due premiums under the ABSLI Assured Income Plus Plan policy have been paid.

iii.) Loyalty Additions

(for both options)

Loyalty Addition as a percentage of the Income Benefit will be added to your Income Benefit every year during the benefit payout period. The percentage varies based on the premium paying term and the annualised premium amount.

Grace Period, Discontinuance and Revival of ABSLI Assured Income Plus Plan

Grace Period

A grace period of 30 days from the premium due date (15 days in case of Monthly mode) for payment of each premium will be allowed.

Discontinuance

Your ABSLI Assured Income Plus 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 Income Plus Plan Policy shall Lapse w.e.f. the due date of unpaid premium, and all benefits under the Policy, including the insurance cover, shall cease.

Discontinuance of Payment of Premium after the Policy has acquired surrender value: the Policy shall become a Reduced Paid Up (RPU) Policy. The RPU Sum Assured and RPU Income Benefit shall be equal to the Sum Assured and Income Benefit respectively, multiplied by the RPU Factor.

Revival

You can revive Your ABSLI Assured Income Plus Plan Policy within a revival period of five years from the due date of the first unpaid premium.

Free Look Period of ABSLI Assured Income Plus Plan

In case you are not satisfied with the terms & conditions of Your Policy, you will have the right to return Your Policy within 15 days (30 days in the case of electronic policies and the policies issued under Distance Marketing of Insurance products) from the date of receipt of the Policy.

Surrendering ABSLI Assured Income Plus Plan

Your ABSLI Assured Income Plus 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 during the ABSLI Assured Income Plus Plan policy term after the Policy has acquired a Surrender Value.

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 Income Plus Plan?

For added protection, you can enhance Your risk coverage during the ABSLI Assured Income Plus Plan policy term by adding riders
You may take a loan against Your ABSLI Assured Income Plus Plan Policy and the maximum loan amount is 80% of the surrender value
All the benefits under the ABSLI Assured Income Plus Plan are guaranteed

What are the disadvantages of the ABSLI Assured Income Plus Plan?

There is no maturity benefit under the ABSLI Assured Income Plus Plan . Even the lump sum benefit under the second plan option will not help to meet any bigger goals.
The life cover ceases at the end of the premium paying term and is not extended during the income benefit period.
You can’t accrue or postpone the annual survival benefit.

Research Methodology of ABSLI Assured Income Plus Plan

From a liquidity perspective, the ABSLI Assured Income Plus Plan offers guaranteed survival benefits for a specified period.

Calculating returns in percentage terms allows you to evaluate the ABSLI Assured Income Plus Plan and make informed decisions. Here, we analyze the Internal Rate of Return (IRR) based on a quote from the portal.

Benefit Illustration – IRR Analysis of ABSLI Assured Income Plus Plan

A 35-year-old male invests ₹1,50,000 annually in the ABSLI Assured Income Plus plan. He selects a premium payment term of 12 years, a policy term of 12 years, and a benefit payout period of 20 years under the Income with Lumpsum Benefit Option.

He opts to receive the income benefits annually, with a sum assured of ₹18.75 lakhs.

Male	35 years
Sum Assured	₹ 18,75,000
Policy Term	12 years
Premium Paying Term	12 years
Annualised Premium	₹ 1,50,000

Starting at the end of the 13th year, the survival benefit of ₹1,64,000 per year is disbursed. In addition to the final payout, he receives a lump sum benefit of ₹21.61 lakhs.

All these benefits are guaranteed, resulting in an IRR of 5.73% as per the ABSLI Assured Income Plus Plan maturity calculator

Age	Year	Annualised premium / Maturity benefit	Death benefit
35	1	-1,50,000	18,75,000
36	2	-1,50,000	18,75,000
37	3	-1,50,000	18,75,000
38	4	-1,50,000	18,75,000
39	5	-1,50,000	18,75,000
40	6	-1,50,000	18,75,000
41	7	-1,50,000	18,75,000
42	8	-1,50,000	18,75,000
43	9	-1,50,000	18,75,000
44	10	-1,50,000	18,75,000
45	11	-1,50,000	18,75,000
46	12	-1,50,000	18,75,000
47	13	0
48	14	1,64,000
49	15	1,64,000
50	16	1,64,000
51	17	1,64,000
52	18	1,64,000
53	19	1,64,000
54	20	1,64,000
55	21	1,64,000
56	22	1,64,000
57	23	1,64,000
58	24	1,64,000
59	25	1,64,000
60	26	1,64,000
61	27	1,64,000
62	28	1,64,000
63	29	1,64,000
64	30	1,64,000
65	31	1,64,000
66	32	1,64,000
67		23,25,000

	IRR	5.73%

However, this rate of return over a long-term investment period of 32 years is not favourable for an investor.

Receiving the survival benefit annually diminishes the lump sum benefit at the end, and neither the annual survival benefit nor the lump sum benefit is adequate for meeting significant financial goals. Therefore, investing in the ABSLI Assured Income Plan may not be advantageous at any point.

ABSLI Assured Income Plus Plan Vs Other Investment Products

The ABSLI Assured Income Plus Plan’s returns fail to keep pace with inflation in the long run. For better returns, consider directing your savings toward other alternatives. Separating insurance and investment can ensure improved returns and liquidity.

Let’s explore this alternate investment strategy.

ABSLI Assured Income Plus Plan Vs Pure Term + ELSS

Using the same premium amount of ₹1.5 lakhs, allocate funds for both insurance coverage and investment. A pure term life insurance policy with a sum assured of ₹19 lakhs costs an annual premium of ₹8,600, with a policy term and premium payment term of 12 years.

The remaining premium amount, ₹1,41,400, can be invested for corpus accumulation.

Pure Term Life Insurance Policy
Sum Assured	₹ 19,00,000
Policy Term	12 years
Premium Paying Term	12 years
Annualised Premium	₹ 8,600
Investment	₹ 1,41,400

An ELSS fund is chosen for this purpose. At the end of 12 years, the ELSS fund matures to ₹38.21 lakhs. After accounting for capital gains tax, the post-tax maturity value is ₹36.19 lakhs. The ELSS proceeds are then invested in an instrument yielding a 7% annual return.

Age	Year	Term Insurance premium + ELSS	Death benefit
35	1	-1,50,000	18,75,000
36	2	-1,50,000	18,75,000
37	3	-1,50,000	18,75,000
38	4	-1,50,000	18,75,000
39	5	-1,50,000	18,75,000
40	6	-1,50,000	18,75,000
41	7	-1,50,000	18,75,000
42	8	-1,50,000	18,75,000
43	9	-1,50,000	18,75,000
44	10	-1,50,000	18,75,000
45	11	-1,50,000	18,75,000
46	12	-1,50,000	18,75,000
47	13	0
48	14	1,64,000
49	15	1,64,000
50	16	1,64,000
51	17	1,64,000
52	18	1,64,000
53	19	1,64,000
54	20	1,64,000
55	21	1,64,000
56	22	1,64,000
57	23	1,64,000
58	24	1,64,000
59	25	1,64,000
60	26	1,64,000
61	27	1,64,000
62	28	1,64,000
63	29	1,64,000
64	30	1,64,000
65	31	1,64,000
66	32	1,64,000
67		74,46,692

	IRR	8.16%

To match the survival benefit of the ABSLI Assured Income Plus Plan, ₹1.64 lakhs are withdrawn annually for 20 years. In the end, the remaining amount is fully withdrawn to match the lump sum benefit of the ABSLI Assured Income Plus Plan. This cash flow results in an IRR of 8.16%.

ELSS Tax Calculation
Maturity value after 12 years	38,21,916
Purchase price	16,96,800
Long-Term Capital Gains	21,25,116
Exemption limit	1,00,000
Taxable LTCG	20,25,116
Tax paid on LTCG	2,02,512
Maturity value after tax	36,19,404

By avoiding annual withdrawals, you could accumulate a larger corpus, resulting in even better yields. This investment strategy offers liquidity and flexibility, allowing you to withdraw funds as needed, unlike the rigid schedule of the ABSLI Assured Income Plus Plan.

Final Verdict on ABSLI Assured Income Plan

The flexibility to choose between survival benefits alone or along with a lump sum benefit is an attractive feature of the ABSLI Assured Income Plus Plan. However, the investment return is not favourable for long-term investments. Additionally, there is no option to defer the income benefit.

The life coverage is only provided during the premium-paying term, not during the survival benefit period.

The sum assured is also relatively low. Overall, both the life cover and income benefit do not favour the investor and also this policy has a high agent commission, making the ABSLI Assured Income Plus Plan an unattractive option.

It is crucial to have adequate life insurance coverage before starting your investment journey. Pure-term life insurance policies are available at affordable premiums. Additionally, a diversified investment portfolio can help you achieve your financial goals at the right time.

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ABSLI Assured Income Plus Plan: Good or Bad? An Enlightening Review

Table of Contents:

What is the ABSLI Assured Income Plus Plan?

What are the features of the ABSLI Assured Income Plus Plan?

Who is eligible for the ABSLI Assured Income Plus Plan?