Listen to this article
During your working years, your regular source of income will help you take care of Your dependent parents, maintain your lifestyle & support your child’s dream.
You need support during the later stage of your life. ABSLI provides life insurance coverage, a guaranteed stream of income, and lump sum benefits under the product ABSLI Nishchit Aayush Plan.
But, is the Internal Rate of Return (IRR) of this ABSLI Nishchit Aayush Plan enough to secure your future?
We will look into the official brochure of ABSLI Nishchit Aayush and dissect the pros(advantages) and cons(disadvantages) of this new plan. Let us Calculate the different benefits and answer your different doubts. In this article let us review this plan & analyze the various benefits under this plan.
Table of contents
1.)An Overview of ABSLI Nishchit Aayush Plan
2.)Features of ABSLI Nishchit Aayush Plan – Analysis
3.)Who is eligible for ABSLI Nishchit Aayush Plan?
4.)Review of Benefits under ABSLI Nish chit Aayush Plan
- Death benefit – Analysis
- Survival Benefit – Analysis
5.)ABSLI Nishchit Aayush Plan Maturity Benefit Calculator & Analysis
6.)ABSLI Nishchit Aayush Plan – Review of The Grace Period, Discontinuance & Revival – Good or Bad?
7.)A Look into the Free Look Period of ABSLI Nishchit Aayush Plan
8.)How to surrender ABSLI Nishchit Aayush Plan?
9.)Advantages of ABSLI Nishchit Plan – Analysis
10.)Disadvantages of ABSLI Nishchit Aayush Plan – Analysis
11.)Research Methodology of ABSLI Nishchit Plan
12.)Benefit Illustration – IRR (Internal Rate of Return i.e. Interest Rate) analysis of ABSLI Nishchit Plan
13.)ABSLI Nishchit Aayush Plan vs Other Investment Plans – Comparison Review
- ABSLI Nishchit Aayush Plan vs ABSLI Vision Star Plan – Review
- ABSLI Nishchit Aayush Plan vs ABSLI Wealth Assure Plus Plan – Review
- ABSLI Nishchit Aayush Plan vs Alternate Investment Strategy (Solution) – Analysis
- ABSLI Nishchit Aayush Plan vs Other Investment Plans – Review Conclusion
14.)Final verdict on ABSLI Nishchit Aayush Plan – Good or Bad?
An Overview of ABSLI Nishchit Aayush Plan
It is a non-linked non-participating individual savings life insurance plan. It provides life insurance coverage with guaranteed regular income and lump sum benefits, empowering you to fulfill your goals and financially secure your family even in your absence.
Before getting into the review of the ABSLI Nishchit Aayush Plan, read the Official Brochure(pdf) for a better perspective of this plan.
Let us analyse the features of the ABSLI Nishchit Aayush Plan in short and crisp points.
Features of ABSLI Nishchit Aayush Plan – Analysis
- You get a Guaranteed Income from the 1st /2nd policy anniversary till the end of the policy term.
- Lumpsum Benefit at policy maturity, in addition to Income.
- Life Cover across policy term
- The income variant could be long-term or Whole life. There is also the choice of increasing income or level income option.
- You have the flexibility to build your own plan with a choice of income benefit, income variant, premium payment term, policy term, and deferment period.
Who are eligible for ABSLI Nishchit Aayush Plan?
| Minimum | Maximum | ||
|---|---|---|---|
| Age at Entry | Long-Term Income: 30 days
Whole Life Income: 30 years |
55 years | |
| Age at Maturity | 18 years | Long-Term Income: 85 years
Whole Life Income: 100 years |
|
| Policy term | |||
| Premium Payment Term (PPT) & Policy Term (PT) | Premium Payment Term (Years) | Long term Income | Whole life income |
| 6 pay | 25/30/35/40 | 100 – the age at entry | |
| 8 pay | 25/30/35/40 | ||
| 10 pay | 30/35/40 | ||
| 12 pay | 30/35/40 | ||
| Premium Payment Modes | Annual | Semi-Annual | Quarterly | Monthly | ||
| Modal Factors | Frequency | Modal Factors | |
| Annual | 0% | ||
| Semi-annual | 2% | ||
| Quarterly | 3% | ||
| Monthly | 4% | ||
| Annualized Premium | ₹ 30,000 | No Limit | |
| Sum Assured | ₹ 3,00,000 | No Limit | |
Review of Benefits under ABSLI Nish chit Aayush Plan
Death benefit – Analysis
If the Life Insured, unfortunately, passes away at any point during the Policy Term, provided the ABSLI Nishchit Aayush Policy is in force, Death Benefit shall be payable as a lump sum to the nominee. Death Benefit is defined as higher of:
- Sum Assured on Death
- Surrender Benefit
Where ‘Sum Assured on Death is higher of
- 10 times the Annualized Premium.
- Sum Assured
- 105% of Total Premiums Paid till the date of death
Staggered death benefit option
The Nominee will have the option to receive the amount of the Death Benefit in Annual/ Monthly installments instead of in one lump payment, at the end of each year or month, over the course of five years.
Survival Benefit – Analysis
On Survival of life insured, provided all due premiums have been paid, Survival Benefit in the form of Guaranteed Income will be paid at the end of each year beginning with the first policy year (if ‘0 Year’ deferment is selected) and continuing until Policy Maturity.
Income Benefit Payout Frequency: You have the option to receive the Income Benefit in annual or semi-annual or quarterly or monthly frequency (at the end of the term). The Income Variants are explained below,
Level Income with Lump Sum Benefit/Level Income with Enhanced Lump Sum Benefit:
Level Income Benefit expressed as a percentage of Annualized Premium will be paid to you which varies by Benefit Option, Income Variant, Deferment Period, Premium Payment Term, Policy Term, Life Insured’s Age at the inception of the policy, and Annualized Premium.
Increasing Income with Lump Sum Benefit:
Under this option, the Income benefit payout will increase at a simple interest rate of 5% every 5 years from the policy commencement date as per the deferment option chosen.
ABSLI Nishchit Aayush Plan Maturity Benefit Calculator & Analysis
On survival of life insured till the end of the policy term, Guaranteed Lump sum Benefit (GLB) is payable.
“Guaranteed Lump sum Benefit is equal to the Total Premiums Paid by You multiplied by the applicable Lump sum Factor”.
The ABSLI Nish Chit Aayush Plan’s lump sum Factor changes depending on the Benefit Option, Income Variant, Premium Payment Term, and Policy Term.
ABSLI Nishchit Aayush Plan – Review of The Grace Period, Discontinuance & Revival – Good or Bad?
Grace period
You will be given a Grace Period of thirty days from the due date for payment of each premium for all premium paying modes except for the monthly mode, where a grace period of only fifteen days will be allowed.
Discontinuance
Discontinuance of Payment of Premium in ABSLI Nishchit Aayush Plan before the Policy has acquired surrender value.
If the required premium is not paid during the grace period, the policy expires as of the due date for the unpaid premium, and all benefits under the policy—including the insurance cover—cease to exist and are no longer payable.
Discontinuance of Payment of Premium in ABSLI Nishchit Aayush Plan after the Policy has acquired surrender value.
If you don’t pay the due premium during the grace period, the Policy shall become a Reduced Paid Up (RPU) Policy.
Revival
You can revive Your ABSLI Nish chit Aayush Policy within a revival period of five years from the due date of the first unpaid premium.
A Look into the Free Look Period of ABSLI Nishchit Aayush Plan
If the terms and conditions of your policy do not meet your needs, you have the right to return it within 15 days (or 30 days in the case of electronic policies and policies issued in accordance with the IRDAI Guidelines on Distance Marketing of Insurance Products) of the date you received it.
How to surrender ABSLI Nishchit Aayush Plan?
You can surrender the policy any time during the Policy Term after the policy has acquired a Surrender Value.
Your policy will acquire a Surrender Value after all due premiums for at least two full policy years are paid.
The Surrender Value payable will be higher than Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV).
Advantages of ABSLI Nishchit Plan – Analysis
- You start receiving the survival benefit from the beginning of 2nd policy anniversary itself. You receive it till the end of the policy term or your whole life.
- Riders can be added to the base policy.
- Premium paying terms, policy terms, and Income benefits can be chosen at your convenience.
- Under the increasing income benefit option, the Income benefit payout will increase at a simple interest rate of 5% every 5 years.
- The death benefit could be received in installments.
- Laon option is available up to a maximum of 80% of the surrender value.
Disadvantages of ABSLI Nishchit Aayush Plan – Analysis
- All the benefits are staggered over the years, so it may not help you to meet your big-ticket expenses.
- Since the plan offers survival benefits from the 2nd policy year, the return is meager i.e., the investment is not allowed to grow to fetch better returns.
- The sum assured is low when compared to Pure -Term life insurance policies.
- No loyalty addition or bonus for this plan.
Research Methodology of ABSLI Nishchit Plan
ABSLI Nishchit Aayush offers both Survival Benefits (regular income) & maturity benefits (lumpsum). To understand the plan better we shall look at a benefit illustration given in the policy brochure. With the given information, the Internal rate of return i.e. Interest Rate is calculated below.
Benefit Illustration – IRR (Internal Rate of Return i.e. Interest Rate) analysis of ABSLI Nishchit Plan
A 40-year-old male invests J1,00,000 p.a. in ABSLI Nishchit Aayush Plan. He opts for a Long-Term Income variant with a Premium Payment Term of 10 years and a Policy Term of 40 years and chooses to receive his income immediately (0-year deferment) on an annual basis.
| Male | 40 years old |
|---|---|
| Sum Assured | 10,00,000 |
| Policy term | 40 years |
| Premium paying term | 10 years |
| Annual premium | 1,00,000 |
| Income option | Level Income with Lumpsum benefit |
He pays a premium of ₹1,00,000 for 10 years & receives a Survival Benefit of ₹ 37,750 per year during the policy term and a Maturity Benefit of ₹ 14 lakhs at the end of the Policy Term. In the initial years, the Survival Benefit is adjusted with the premium.
| Age | Year | Annualized premium / Maturity benefit | Death benefit |
|---|---|---|---|
| 40 | 1 | -1,00,000 | 10,00,000 |
| 41 | 2 | -62,250 | 10,00,000 |
| 42 | 3 | -62,250 | 10,00,000 |
| 43 | 4 | -62,250 | 10,00,000 |
| 44 | 5 | -62,250 | 10,00,000 |
| 45 | 6 | -62,250 | 10,00,000 |
| 46 | 7 | -62,250 | 10,00,000 |
| 47 | 8 | -62,250 | 10,00,000 |
| 48 | 9 | -62,250 | 10,00,000 |
| 49 | 10 | -62,250 | 10,00,000 |
| 50 | 11 | 37,750 | 10,00,000 |
| 51 | 12 | 37,750 | 10,00,000 |
| 52 | 13 | 37,750 | 10,00,000 |
| 53 | 14 | 37,750 | 10,00,000 |
| 54 | 15 | 37,750 | 10,00,000 |
| 55 | 16 | 37,750 | 10,00,000 |
| 56 | 17 | 37,750 | 10,00,000 |
| 57 | 18 | 37,750 | 10,00,000 |
| 58 | 19 | 37,750 | 10,00,000 |
| 59 | 20 | 37,750 | 10,00,000 |
| 60 | 21 | 37,750 | 10,00,000 |
| 61 | 22 | 37,750 | 10,00,000 |
| 62 | 23 | 37,750 | 10,00,000 |
| 63 | 24 | 37,750 | 10,00,000 |
| 64 | 25 | 37,750 | 10,00,000 |
| 65 | 26 | 37,750 | 10,00,000 |
| 66 | 27 | 37,750 | 10,00,000 |
| 67 | 28 | 37,750 | 10,00,000 |
| 68 | 29 | 37,750 | 10,00,000 |
| 69 | 30 | 37,750 | 10,00,000 |
| 70 | 31 | 37,750 | 10,00,000 |
| 71 | 32 | 37,750 | 10,00,000 |
| 72 | 33 | 37,750 | 10,00,000 |
| 73 | 34 | 37,750 | 10,00,000 |
| 74 | 35 | 37,750 | 10,00,000 |
| 75 | 36 | 37,750 | 10,00,000 |
| 76 | 37 | 37,750 | 10,00,000 |
| 77 | 38 | 37,750 | 10,00,000 |
| 78 | 39 | 37,750 | 10,00,000 |
| 79 | 40 | 37,750 | 10,00,000 |
| 80 | 41 | 14,37,750 | 10,00,000 |
| IRR | 5.28% |
In the above illustration, the internal rate of return (IRR) is calculated at 5.28%.
This rate is lower than the economy’s inflation rate!
“Though you receive regular income benefits from the policy, the IRR is low”.
The reason behind this is the investment should be allowed to grow over time, which is missing in the ABSLI Nishchit Aayush plan.
ABSLI Nishchit Aayush Plan vs Other Investment Plans – Comparison Review
- ABSLI Nishchit Aayush Plan vs ABSLI Vision Star Plan – Review
Both the plans are non-linked insurance plans but ABSLI Nishchit Aayush Plan is non-participating while ABSLI Wealth Assure Plus Plan is participating insurance plan. ABSLI Wealth Assure Plus Plan is mainly focused on the future of your children.
Click below to read the complete review of the ABSLI Wealth Assure Plus Plan.
ABSLI Vision Star Plan Review: Is It Worth Buying or Not?
- ABSLI Nishchit Aayush Plan vs ABSLI Wealth Assure Plus Plan – Review
ABSLI Wealth Assure Plus Plan is a non-participating unit-linked life insurance plan (ULIP) whereas ABSLI Nishchit Aayush Plan is a non-linked non-participating individual savings life insurance plan.
Read the complete review below with insights on surrendering the policy, Maturity Benefit, and different charges.
ABSLI Wealth Assure Plus Plan – Review (2023) – Is it worth buying?
- ABSLI Nishchit Aayush Plan vs Alternate Investment Strategy (Solution) – Analysis
Investments are often made with long-term financial goals in mind, such as retirement planning, education funds, or wealth accumulation.
The longer an investment is allowed to compound, the greater the growth potential.
By allowing investments to remain undisturbed, you allow them to benefit from the time value of money. Let us understand this with an example.
In the ABSLI Nishchit Illustration, you pay an annual premium of ₹ 1 lakh for the first 10 years. Instead of investing here, let us assume we split this into the monthly investment of ₹ 8300 & deposit in a post office Recurring deposit account (8300*12=99,600).
The actual tenure is 5 years in post office RD but it can be extended. The current interest rate (June 2023) is 6.2%p.a. compounded quarterly.
Compound interest or returns have a compounding effect over time. Thus, the final accumulated corpus under the RD investment at the end of 10 years is calculated at ₹13,79,700.
Under the ABSLI Nihschit Aayush illustration, you get a Survival Benefit of 37,750 per annum from the 2nd policy year.
But here we assumed the investment is allowed to grow without withdrawal (survival benefit).
By interrupting or withdrawing funds prematurely, you disrupt this compounding process and potentially miss out on substantial future gains.
The accumulated corpus of ₹13.79 lakhs is then invested at the rate of 6% p.a. for annual withdrawal for the next 30 years (Years 11 – 40). After withdrawing ₹ 60,000 p.a. for the next 30 years, you are still left with a corpus of 28.96Lakhs.
You can refer to the calculation with the illustration below for a better understanding.
| Post Office RD (Year 1-10) | |
|---|---|
| Monthly Investment | ₹ 8,300 |
| Interest Rate | 6.2% p.a. compounded quarterly |
| Tenure | 10 years |
| Final Maturity value (Accumulated corpus) | 13,79,700 |
| Survival benefit (Year 11-40) | |
| Interest rate | 6% |
| Tenure | 30 years |
| Annual withdrawal | ₹ 60,000 |
| Final Maturity value (At the end of 30 years)
After withdrawing 60,000 per year |
₹ 28,96,194 |
Under ABSLI Nishchit you get a survival benefit of ₹37,750 & the final maturity benefit of ₹ 14 lakhs. But here, from the illustration we have calculated that you get double the survival benefit & double the final maturity value.
The following table gives you the brief details.
| ASBLI Nishchit Aayush Plan | Post office RD | |
|---|---|---|
| Investment | 1 lakh per annum for 10 years | 8300 per month for 10 years (8300*12=99600) |
| Survival benefit | ₹ 37,750 (Year 2 -40) | ₹ 60,000 (year 11-40) |
| Final maturity value (at the end of 40 years) | ₹ 14 lakhs | ₹ 28.96 lakhs |
-
ABSLI Nishchit Aayush Plan vs Other Investment Plans – Review Conclusion
After a critical analysis of all other alternative plan options for the ABSLI Nishchit Aayush Plan,
As we discussed earlier, the IRR rate of the ABSLI Nishchit Aayush Plan is lower than the economy’s inflation rate!
“Though you receive regular income benefits from the policy, the IRR is low”.
The reason behind this is the investment should be allowed to grow over time, which is missing in the ABSLI Nishchit Aayush plan.
The illustrations have proved that the final survival benefit and final maturity benefit you get from Post Office RD is double the amount you get from ABSLI Nishchit Aayush Plan.
On the whole, bank FDs or Post Office RD is far better investment options than ABSLI Nishchit Aayush Plan.
Final Verdict on ABSLI Nishchit Aayush Plan – Good or Bad?
ABSLI Nishchit Aayush plan offers various benefits to policyholders. Depending on the personal requirement, the policyholder can choose from a wide range of options. All the benefits Viz, survival benefits & maturity benefits are guaranteed amounts.
Policyholders may get lured by the regular cash flow which is guaranteed. But beware staggered benefits reduce your return.
Traditional policies often include a savings or investment component where the premiums you pay accumulate over time.
By withdrawing income benefits before the premium-paying term ends, you may receive a reduced amount compared to what you would have received if you had waited until the end of the term. This could affect your final return on investment.
Paying the premium & at the same time getting Survival income is not a good option. As long as the investment is allowed to grow, it will accelerate your return.
Please don’t get lured by insurance agents who sell you this ABSLI Nishchit Aayush plan for their agent commission.
To cater to your life cover opting for a pure-term insurance policy is the best option.
Do you know that hundreds of people get misled every day by amateur financial advice on social medial platforms like Quora, Twitter, Facebook, etc? Please consult a professional financial planner to plan your finances.
I think the above review doesn’t talk about some critical points:
1. The survival benefit and the lump sum amount at the end of the period, both of them will be 100% tax free under section 10 – 10D. I think this option makes attractive for the people who are thinking to pick this up.
2. The survival benefit which we get, we can use it as a cash flow for some expenses. In case, if you want to generate an alpha returns then please divert that amount to some Nifty 50 which will give at least 11%-12% returns.
Even if we do the investment for 25 years with 10% returns of 8300 per month, we will get 1.1 crore additional. Please note this will be taxable with indentation benefit.
hey today we signed the doc for this Nishchit plan( obviously without knowing) . can we continue or cancel the plan???