Listen to this article

Can the ABSLI Param Suraksha Plan balance the dual goals of life insurance protection and wealth creation without compromise?

Can the ABSLI Param Suraksha Plan help you achieve your goals and provide the support you need?

Can the ABSLI Param Suraksha Plan offer both transparency and flexibility to match your long-term goals?

In this article, we explore the plan’s features, benefits, drawbacks, and costs. Additionally, a detailed Internal Rate of Return (IRR) analysis is included to help you assess its financial viability.

What is the ABSLI Param Suraksha Plan?

ABSLI Param Suraksha is a unit-linked non-participating individual life insurance savings plan. ABSLI Param Suraksha is tailored specially for growing your wealth through market-linked returns along with providing ample protection to your loved ones with Life Insurance cover.

What are the features of the ABSLI Param Suraksha Plan?

Choice of Sum Assured Multiple as high as 30X basis the Age and Policy Term chosen at policy inception
Return of 2X Premium Allocation Charges from the end of the 10^th year to the 13^th year to boost your Fund Value
Return of 2X Mortality Charges from the 11^th policy year till the end of the policy term
Systematic Withdrawal Facility to enable regular withdrawals from your Fund Value during the policy term to cater to your recurring monetary needs
Choice of 5 investment strategies and 19 funds to suit your varied investment needs
Tax Benefits may be applicable on Premiums paid and Benefits received as per prevailing tax laws

Who is eligible for the ABSLI Param Suraksha Plan?

	Minimum	Maximum
Entry Age	18 years	50 years
Minimum Maturity age	75 years
Premium	₹ 1 Lakh	No Limit
Sum assured	₹ 7 Lakhs	No Limit
Premium paying term	6/8/10/12 years
Policy term	15/20/25/26/27/28/29/30 years
Premium Payment Mode	Annual

What are the benefits of the ABSLI Param Suraksha Plan?

Death benefit

In case of Death of the Life Insured anytime during the ABSLI Param Suraksha Plan Policy Term, the nominee will receive the higher of:

Fund Value as on date of intimation of death of the Life Insured; or
Sum Assured (reduced by partial withdrawals made, if any) or
105% of the Total Annualized Premiums received up to the date of death, less any partial withdrawals made

Maturity benefit

The ABSLI Param Suraksha Plan Policyholder will receive the Fund Value as a lump sum unless the policyholder has opted for the settlement option.

Return of charges

2 times the total Premium Allocation Charges (excluding taxes) collected shall be added back to the fund at the end of each of the years between 10 to 13 years

2 times the mortality charges starting from policy year 11 are added to the fund

What are the investment strategies and fund options in the ABSLI Param Suraksha Plan?

Under ABSLI Param Suraksha, you can choose to invest your premiums in one of the five investment strategies.

A. Systematic Transfer Option

Your premium shall be first allocated to the Liquid Plus fund option and thereafter monthly 1/12th or weekly 1/48th of the allocated amount shall be transferred to a segregated fund(s) of your choice.

The percentage allocated to chosen fund(s) is in increments of 1%, ranging from 5% to 100%. The total allocation across all funds must be 100%. You can choose up to a maximum of four segregated funds out of;

Income Advantage
Enhancer
Maximiser
Super 20
Capped Nifty Index
Multiplier
Value & Momentum
Creator
MNC
ESG Fund
Small Cap Fund
Nifty Alpha 50 Index Fund

B. Return Optimiser Investment Option

Basic premiums are invested in the Maximiser fund and it will be tracked every day for any gains.

The gain from the Maximiser fund reaches 10% or more of the net invested amount, the amount equal to the appreciation will be transferred to the Income Advantage fund. Thus, the gains are protected from future market volatility.

C. Self-Managed Investment Option

Self-Managed Investment Option gives you access to our well-established suite of 19 funds, complete control in how to invest your premiums and full freedom to switch from one fund to another.

The only requirement is that the percentage allocated to any fund be in increments of 1%, ranging from 5% to 100%. The total allocation across all funds must be 100%.

S.no	Fund Name	Risk Profile	Asset Allocation
			Debt	Money market	Equities
1	Liquid plus	Very low	20-100%	0-80%	–
2	Income Advantage	Very low	60-100%	0-40%	–
3	Assure	Very low	20-100%	0-80%	–
4	Protector	Low	90-100%	0-40%	0-10%
5	Builder	Low	80-100%	0-40%	10-20%
6	Enhancer	Medium	25-80%	0-40%	20-35%
7	Creator	Medium	50-70%	0-40%	30-50%
8	Asset Allocator	High	10-80%	0-40%	10-80%
9	Magnifier	High	10-50%	0-40%	50-90%
10	Maximiser	High	0-20%	0-20%	80-100%
11	Multiplier	High	0-20%	0-20%	80-100%
12	Super 20	High	0-20%	0-20%	80-100%
13	Pure equity	High	0-20%	0-20%	80-100%
14	Value & Momentum	High	0-20%	0-20%	80-100%
15	Capped Nifty index	High	0-10%	0-10%	90-100%
16	MNC	High	0-20%	0-20%	80-100%
17	ESG Fund	High	0-20%	0-20%	80-100%
18	Small-cap Fund	High	0-20%	0-20%	80-100%
19	Nifty Alpha 50 Index Fund	High	0-20%	0-20%	80-100%
			Govt Sec	Money market	Equities
	Linked discontinued policy fund	Very low	60-100%	0-40%	–

D. Smart Investment option

Your portfolio will be structured as per your maturity date and risk profile (Conservative, Moderate, Aggressive).

Your Annualized Premium (net of premium allocation charge) is allocated between the two funds – Maximiser (equity fund) and Income Advantage (debt fund) in a predetermined proportion.

Over time the allocation is managed such that it will automatically switch from riskier assets to safer assets progressively as your ABSLI Param Suraksha Plan approaches maturity.

The proportion invested in Maximiser (equity fund) and Income Advantage (debt fund) will be according to the schedule given below:

Outstanding Term to Maturity	Aggressive		Moderate		Conservative
	Maximiser	Income Advantage	Maximiser	Income Advantage	Maximiser	Income Advantage
21 & above	0.9	0.1	0.7	0.3	0.5	0.5
16 to 20	0.8	0.2	0.6	0.4	0.4	0.6
8 to 15	0.65	0.35	0.5	0.5	0.3	0.7
4 to 7	0.5	0.5	0.25	0.75	0.15	0.85
0 to 3	0.2	0.8	0.1	0.9	0.05	0.95

E. Life Cycle Investment Option

Your Annualized Premium (net of premium allocation charge) is allocated between the two funds, Maximiser (Equity Fund) and Income Advantage (Debt Fund) in a predetermined proportion based on the selected risk profile and your age when the premium is invested.

The percentage allocation to Maximiser according to age and risk profile is as given below:

Age Group	Aggressive	Moderate	Conservative
1 to 30	90%	70%	50%
31 to 40	80%	60%	50%
41 to 50	70%	50%	30%
51 to 60	55%	35%	15%
61 to 70	40%	20%	0%
71 +	25%	5%	0%

What are the charges of the ABSLI Param Suraksha Plan?

i.) Premium allocation charge

A Premium Allocation Charge is levied on the Annualized Premium received before it is allocated in the funds. This charge is guaranteed for the entire ABSLI Param Suraksha Plan policy term. The Premium Allocation Charge(p.a.) is as follows:

Policy Year	% of the Annualized premium received
1	12%
2	6%
3	4%
4	3%
5+	NIL

ii.) Fund Management Charge

1.00% p.a. for Liquid Plus, Income Advantage, Assure, Protector and Builder

1.25% p.a. for Enhancer, Creator, Capped Nifty Index, Asset Allocation

1.35% p.a. for MNC, Magnifier, Maximiser, Multiplier, Super 20, Pure Equity, ESG Fund and Small Cap Fund, Nifty Alpha 50 Index Fund and Value & Momentum

0.50% p.a. for Linked Discontinued Policy Fund

iii.) Policy Administration charge

There is no policy administration charge in the first 4 policy years and from year 5 onwards, 0.32% per month of the annualized premium increases at 5% per annum on each ABSLI Param Suraksha Plan policy anniversary.

iv.) Mortality charge

It is based on the sum at risk and is deducted at the start of each month by the proportionate cancellation of units from each fund under the ABSLI Param Suraksha Plan policy at the time.

The charge per 1000 of Sum at Risk will depend on the gender and attained age of the Life Insured.

Attained Age	Age 25	Age 35	Age 45	Age 55	Age 65
Male	0.84	1.09	2.34	6.83	14.49
Female	0.85	0.94	1.79	5.05	11.67

v.) Miscellaneous charge

NIL

vi.) Surrender Charges

The charge on discontinuance or surrender of the ABSLI Param Suraksha Plan policy will be based on the year of discontinuance/surrender, the premium amount and the fund value.

Inference from the charges – The charges under the ABSLI Param Suraksha Plan are significant for a market-linked product. These substantial fees will reduce the net premium invested, impacting your returns. As a result, your final proceeds over the long term will be affected.

Grace period, Discontinuance and Revival of the ABSLI Param Suraksha Plan

Grace Period

You will be given a Grace Period of 30 days (15 days in case the premium paying mode is monthly) to make the payment of due instalment premium(s).

Policy Discontinuance

Discontinuance during the first five policy years: the ABSLI Param Suraksha Plan policy fund Value after deducting the applicable discontinuance /surrender charges shall be credited to the Linked Discontinued Policy Fund and the risk cover, if any, shall cease immediately.

The proceeds in the Linked Discontinued Policy Fund shall be paid to you at the end of the revival period or lock-in period whichever is later.

Discontinuance after the first five policy years: your ABSLI Param Suraksha Plan policy shall be converted into a reduced paid-up policy with the Reduced paid-up Sum Assured i.e. original Sum Assured multiplied by the total number of Annualized Premiums paid to the original number of Annualized Premiums payable as per the terms and conditions of the policy.

Revival

You can revive the ABSLI Param Suraksha Plan policy within the revival period of three years.

Free Look period of ABSLI Param Suraksha Plan

You will have the right to return your ABSLI Param Suraksha Plan Policy within 30 days from the date of receipt of the Policy, in case you disagree with the terms and conditions of your Policy.

Surrendering ABSLI Param Suraksha Plan

Surrendering during the first five policy years: you will have the option to surrender the policy anytime but, the proceeds in the Linked Discontinued Policy Fund shall be payable at the end of the lock-in period or date of surrender whichever is later.

Surrendering after the first five policy years: you will have an option to surrender the ABSLI Param Suraksha Plan policy anytime and the policy fund Value shall be payable upon receipt of such request of surrender.

What are the advantages of the ABSLI Param Suraksha Plan?

Unlimited free switches are allowed under the Self-Managed and Systematic Transfer Investment Options.
You can switch from one investment option to another after the first policy year.
Risk profile switching is applicable only under the Smart Investment and Life Cycle Investment Options.
Future premiums can be redirected under the Self-Managed Option.
Premiums can be reduced by up to 50% of the original annualized premium after completing the first five policy years.
Unlimited partial withdrawals are allowed after five policy years, provided the policyholder is at least 18 years old.
A settlement option is available for maturity benefits.
Riders can be added to the base policy.

What are the disadvantages of the ABSLI Param Suraksha Plan?

Policy loans are not allowed under this plan.
No liquidity is available during the initial policy years.
The sum assured may not be sufficient.
Only the net premium, after deducting charges, is invested.
Premium payment is restricted to the annual mode, limiting flexibility for policyholders

Research Methodology of the ABSLI Param Suraksha Plan

After reviewing the plan’s features, it is essential for investors to assess its performance. Estimating potential returns helps in comparing it with similar investment options.

Let’s calculate the Internal Rate of Return (IRR) based on the figures provided in the ABSLI Param Suraksha Plan policy brochure.

Benefit Illustration – IRR Analysis of ABSLI Param Suraksha Plan

A 35-year-old male purchases the ABSLI Param Suraksha Plan with a sum assured of ₹30 lakhs. The policy term is 30 years, and the premium-paying term is 12 years, with an annual premium of ₹1 lakh.

Male	35 years
Sum Assured	₹ 30,00,000
Policy Term	30 years
Premium Paying Term	12 years
Annualised Premium	₹ 1,00,000

Upon paying regular premiums, the fund value is provided as a maturity benefit.

The policy illustrations project two assumed rates of future returns: 8% p.a. and 4% p.a., which are not guaranteed and do not represent the upper or lower limits of potential returns.

		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	30,00,000	-1,00,000	30,00,000
36	2	-1,00,000	30,00,000	-1,00,000	30,00,000
37	3	-1,00,000	30,00,000	-1,00,000	30,00,000
38	4	-1,00,000	30,00,000	-1,00,000	30,00,000
39	5	-1,00,000	30,00,000	-1,00,000	30,00,000
40	6	-1,00,000	30,00,000	-1,00,000	30,00,000
41	7	-1,00,000	30,00,000	-1,00,000	30,00,000
42	8	-1,00,000	30,00,000	-1,00,000	30,00,000
43	9	-1,00,000	30,00,000	-1,00,000	30,00,000
44	10	-1,00,000	30,00,000	-1,00,000	30,00,000
45	11	-1,00,000	30,00,000	-1,00,000	30,00,000
46	12	-1,00,000	30,00,000	-1,00,000	30,00,000
47	13	0	30,00,000	0	30,00,000
48	14	0	30,00,000	0	30,00,000
49	15	0	30,00,000	0	30,00,000
50	16	0	30,00,000	0	30,00,000
51	17	0	30,00,000	0	30,00,000
52	18	0	30,00,000	0	30,00,000
53	19	0	30,00,000	0	30,00,000
54	20	0	30,00,000	0	30,00,000
55	21	0	30,00,000	0	30,00,000
56	22	0	30,00,000	0	30,00,000
57	23	0	30,00,000	0	30,00,000
58	24	0	30,00,000	0	30,00,000
59	25	0	30,00,000	0	30,00,000
60	26	0	30,00,000	0	30,00,000
61	27	0	30,00,000	0	30,00,000
62	28	0	30,00,000	0	30,00,000
63	29	0	30,00,000	0	30,00,000
64	30	0	30,00,000	0	30,00,000
65		18,34,424		51,72,634

	IRR	1.74%		6.06%

At a 4% return scenario, the fund value is ₹18.34 lakhs, yielding an IRR of 1.74% as per the ABSLI Param Suraksha Plan maturity calculator, offering no significant value addition.

At an 8% return scenario, the fund value is ₹51.72 lakhs, with an IRR of 6.06% as per the ABSLI Param Suraksha Plan maturity calculator.

The ABSLI Param Suraksha Plan’s potential returns fall short when compared to other market-linked investments that deliver higher yields and greater transparency.

While the risk is relatively high, the returns are comparable to those of debt instruments, making the plan unworthy of the risk taken. This imbalance in the risk-return profile undermines its effectiveness in supporting long-term wealth accumulation.

ABSLI Param Suraksha Plan Vs. Other Investments

The potential returns of the ABSLI Param Suraksha Plan are comparable to those of debt instruments, making it difficult to classify this plan as an equity investment within your portfolio.

To provide a clearer perspective, we will calculate the returns of alternative investments by separating life insurance and investment components.

ABSLI Param Suraksha Plan Vs. Pure-term + ELSS

Consider a pure-term life insurance policy with a sum assured of ₹50 lakhs (minimum sum assured for pure-term policy is ₹ 50 lakh), costing ₹21,200 annually for a policy term of 30 years and a premium-paying term of 10 years.

By opting for this policy, you save ₹78,800 per year, which can be invested separately. Unlike the ABSLI Param Suraksha Plan’s 12-year premium-paying term, this scenario has a 10-year premium payment period. This allows you to invest the full ₹1 lakh annually after the first 10 years.

Pure Term Life Insurance Policy
Sum Assured	₹ 50,00,000
Policy Term	30 years
Premium Paying Term	10 years
Annualised Premium	₹ 21,200
Investment	₹ 78,800

		Term insurance + ELSS
Age	Year	Term Insurance premium + ELSS	Death benefit
35	1	-1,00,000	50,00,000
36	2	-1,00,000	50,00,000
37	3	-1,00,000	50,00,000
38	4	-1,00,000	50,00,000
39	5	-1,00,000	50,00,000
40	6	-1,00,000	50,00,000
41	7	-1,00,000	50,00,000
42	8	-1,00,000	50,00,000
43	9	-1,00,000	50,00,000
44	10	-1,00,000	50,00,000
45	11	-1,00,000	50,00,000
46	12	-1,00,000	50,00,000
47	13	0	50,00,000
48	14	0	50,00,000
49	15	0	50,00,000
50	16	0	50,00,000
51	17	0	50,00,000
52	18	0	50,00,000
53	19	0	50,00,000
54	20	0	50,00,000
55	21	0	50,00,000
56	22	0	50,00,000
57	23	0	50,00,000
58	24	0	50,00,000
59	25	0	50,00,000
60	26	0	50,00,000
61	27	0	50,00,000
62	28	0	50,00,000
63	29	0	50,00,000
64	30	0	50,00,000
65		1,48,09,290

	IRR	10.53%

Based on your risk preference, you could choose either equity (high-risk) or debt (low-risk) investments. Here, we assume investment in an ELSS fund. By the end of 30 years, the fund value is ₹1.67 crores.

After accounting for capital gains tax, the post-tax value is ₹1.48 crores. The IRR for the ELSS investment, combined with the pure-term life insurance policy, is 10.53% (post-tax).

ELSS Tax Calculation
Maturity value after 30 years	1,67,65,903
Purchase price	9,88,000
Long-Term Capital Gains	1,57,77,903
Exemption limit	1,25,000
Taxable LTCG	1,56,52,903
Tax paid on LTCG	19,56,613
Maturity value after tax	1,48,09,290

This return far outperforms the ABSLI Param Suraksha Plan, exceeding inflation and enabling faster wealth accumulation over the long term.

Separating insurance and investment proves to be a more efficient strategy. The low risk-adjusted returns and inadequate sum assured to make the ABSLI Param Suraksha Plan a less suitable choice for meeting financial goals.

Final verdict on the ABSLI Param Suraksha Plan

The ABSLI Param Suraksha Plan provides a range of fund options and investment strategies tailored to individual preferences. However, these options offer limited value, as the plan’s potential returns are inadequate for a long-term investment.

High charges reduce the investable amount, negatively impacting returns and making it challenging to accumulate the corpus needed to achieve life goals.

Investors generally seek to generate alpha from equity investments to comfortably outpace inflation over time. Unfortunately, the ABSLI Param Suraksha Plan fails to deliver in this regard.

Additionally, the sum assured is insufficient, making the plan unsuitable for inclusion in an investment portfolio and it also has a high agent commission.

For effective financial planning, it is advisable to opt for a pure-term life insurance policy for life cover and build a diversified investment portfolio for wealth accumulation. This approach eliminates the inefficiencies of combining insurance and investment.

When it comes to financial advice, are Quora, Facebook, and Twitter the final word?

When selecting financial products, consider your risk tolerance, time horizon, and life goals.

To ensure a comprehensive financial plan tailored to your needs, consult a Certified Financial Planner. They can provide personalized guidance to help you achieve your objectives.

ABSLI Param Suraksha Plan: Good or Bad? A Detailed ULIP Review

Table of Contents:

What is the ABSLI Param Suraksha Plan?

What are the features of the ABSLI Param Suraksha Plan?

Who is eligible for the ABSLI Param Suraksha Plan?