Categories: Insurance

ABSLI Salaried Suraksha ULIP: Good or Bad? A Detailed ULIP Review

ABSLI Salaried Suraksha ULIP

Listen to this article

Can the ABSLI Salaried Suraksha ULIP secure your financial future while enjoying tax benefits?

Can the ABSLI Salaried Suraksha ULIP address your life insurance, savings, and investment needs?

Is investing in the ABSLI Salaried Suraksha plan a potential strategy to consider?

To determine if this investment aligns with your goals, we’ll explore its features, advantages, disadvantages, associated costs, and potential returns through an IRR analysis. This comprehensive evaluation will help you decide if this investment strategy is suitable for your portfolio.

What is the ABSLI Salaried Suraksha ULIP?

ABSLI Salaried Suraksha ULIP is a unit-linked non-participating individual life insurance plan. It is an exclusive solution tailored especially for Salaried individuals. ABSLI Salaried Suraksha ULIP plan not only grows your wealth but also ensures comprehensive financial security for your family.

What are the features of the ABSLI salaried Suraksha ULIP?

Choice of Life Insurance cover as high as 125X based on the Age/PPT/PT chosen at ABSLI Salaried Suraksha ULIP 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 ABSLI Salaried Suraksha ULIP policy term
Systematic Withdrawal Facility to enable regular withdrawals from your Fund Value during the ABSLI Salaried Suraksha ULIP policy term
Choice of 5 investment strategies and 18 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 Salaried Suraksha ULIP?

	Minimum	Maximum
Entry Age	18 years	50 years
Maximum maturity age	75 years
Premium	As per Sum Assured	No limit
Sum Assured	₹ 50,00,000	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 ABSLI Salaried Suraksha ULIP?

Death benefit

In case of Death of the Life Insured anytime during the ABSLI Salaried Suraksha ULIP Policy Term, while the policy is in force, the nominee will get the higher of:

Fund Value as on date of intimation of death of the Life Insured;
Sum Assured (reduced by partial withdrawals made during the two years immediately preceding the date of death of the Life Insured, if any)
105% of the Total Annualized Premiums received up to the date of death less any partial withdrawals made from the Fund Value, during the two years immediately preceding the death of the life insured.

Maturity Benefit

When the ABSLI Salaried Suraksha ULIP policy matures upon Life Insured surviving up to the end of the Policy Term, the ABSLI Salaried Suraksha ULIP Policyholder will receive the Fund Value as a lump sum, unless the Policyholder has opted for a settlement option.

At maturity, the allocation charge and the Mortality Charge collected, excluding GST, over the ABSLI Salaried Suraksha ULIP Policy Term are returned to the Policyholder.

Investment strategies and Fund options in ABSLI Salaried Suraksha ULIP

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

i.) 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

ii.) 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.

iii.) Self-Managed Option

The ABSLI Wealth Smart Plus Plan policyholder has the full freedom to control & switch from one segregated fund to another among 18 segregated funds.

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%
			Govt Sec	Money market	Equities
	Linked discontinued policy fund	Very low	60-100%	0-40%	–

iv.) 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 Wealth Smart Plus 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	90%	10%	70%	30%	50%	50%
16 to 20	80%	20%	60%	40%	40%	60%
8 to 15	65%	35%	50%	50%	30%	70%
4 to 7	50%	50%	25%	75%	15%	85%
0 to 3	20%	80%	10%	90%	5%	95%

Your portfolio will be structured as per your age and risk profile – you need to decide on your risk profile – Conservative, Moderate or Aggressive. The funds will be shifted from riskier assets to safer assets progressively with your age.

v.) 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 under the ABSLI Salaried ULIP?

A. Premium Allocation Charge

A Premium Allocation Charge is levied on the Annualized Premium and it is as follows:

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

B. 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 and Value & Momentum

0.50% p.a. for Linked Discontinued Policy Fund

C. Policy Administration Charge

Policy Year	% Annualized Premium charged per month
Year 1 to 4	NIL
Year 5 and subsequent years	0.32% per month of the annualised premium increasing at 5% per annum on each policy anniversary.

D. 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 Wealth Smart Plus 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	0.66	0.85	1.84	5.37	11.39
Female	0.66	0.74	1.4	3.96	9.17

E. Miscellaneous Charges

NIL

F. Surrender Charges

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

Inference from the charges: The ABSLI Salaried Suraksha ULIP imposes various fees for investing your money in the market. Unlike other market-related instruments, it includes charges for discontinuance/surrender, policy administration, and premium redirection.

These additional costs can reduce the overall return on investment over time.

Grace period, Policy Discontinuance and Revival of ABSLI Salaried Suraksha ULIP

Grace Period

You will be given a Grace Period of 30 days to make the payment of the due instalment premium(s).

Policy Discontinuance

Discontinuance during the first five policy years: the 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 Salaried Suraksha ULIP 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 Salaried Suraksha ULIP policy within the revival period of three years.

Free Look period of ABSLI Salaried Suraksha ULIP

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

Surrendering ABSLI Salaried Suraksha ULIP

Surrendering during the first five policy years: you will have an option to surrender the ABSLI Salaried Suraksha ULIP 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 Salaried Suraksha ULIP policy anytime and the Fund Value shall be payable upon receipt of such request of surrender.

What are the advantages of the ABSLI Salaried Suraksha ULIP?

There is no limit on the number of switches (Self-managed/Systematic Transfer Investment Option) that can be made in a policy year, and all switches are free of charge.
After the first policy year, you can change from one investment option to another.
Under the Self-Managed option, you can choose to redirect future premiums.
After completing the first five ABSLI Salaried Suraksha ULIP policy years, you have the option to decrease the sum assured and premium by up to 50% of the original amount.
Unlimited partial withdrawals from the fund value are allowed at any time after five complete policy years, provided the policyholder is at least 18 years old.
For the maturity benefit, you may opt for a Settlement Option, where the company will continue to manage the funds and make periodic payments for up to 5 years.

What are the disadvantages of ABSLI Salaried Suraksha ULIP?

Policy loans are not permitted under this ABSLI Salaried Suraksha ULIP plan.
There is no liquidity available during the first policy years.
Although the plan refunds some of the charges, it does not account for the time value of money.

Research Methodology of ABSLI Salaried Suraksha ULIP

In this segment, we’ll calculate the potential returns of the ABSLI Salaried Suraksha ULIP using the Internal Rate of Return (IRR) to compare it with other investment options. Solid numbers provide a clearer understanding.

We’ll analyse a case study provided in the ABSLI Salaried Suraksha ULIP policy brochure for ABSLI Salaried Suraksha ULIP.

Benefit Illustration – IRR Analysis of ABSLI Salaried Suraksha ULIP

Consider a 35-year-old male who purchases the ABSLI Salaried Suraksha ULIP with a sum assured of ₹1 crore. The policy term is 30 years, with a premium-paying term of 12 years and an annualized premium of ₹1 lakh.

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

If he pays the premium regularly, he will receive the fund value as a maturity benefit. The illustrations show two assumed rates of future investment returns: 8% p.a. and 4% p.a. These rates 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	1,00,00,000	-1,00,000	1,00,00,000
36	2	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
37	3	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
38	4	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
39	5	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
40	6	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
41	7	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
42	8	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
43	9	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
44	10	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
45	11	0	1,00,00,000	0	1,00,00,000
46	12	0	1,00,00,000	0	1,00,00,000
47	13	0	1,00,00,000	0	1,00,00,000
48	14	0	1,00,00,000	0	1,00,00,000
49	15	0	1,00,00,000	0	1,00,00,000
50	16	0	1,00,00,000	0	1,00,00,000
51	17	0	1,00,00,000	0	1,00,00,000
52	18	0	1,00,00,000	0	1,00,00,000
53	19	0	1,00,00,000	0	1,00,00,000
54	20	0	1,00,00,000	0	1,00,00,000
55	21	0	1,00,00,000	0	1,00,00,000
56	22	0	1,00,00,000	0	1,00,00,000
57	23	0	1,00,00,000	0	1,00,00,000
58	24	0	1,00,00,000	0	1,00,00,000
59	25	0	1,00,00,000	0	1,00,00,000
60	26	0	1,00,00,000	0	1,00,00,000
61	27	0	1,00,00,000	0	1,00,00,000
62	28	0	1,00,00,000	0	1,00,00,000
63	29	0	1,00,00,000	0	1,00,00,000
64	30	0	1,00,00,000	0	1,00,00,000
65		12,83,050		42,41,656

	IRR	0.98%		5.78%

At a 4% return scenario, the fund value is ₹12.83 lakhs with an IRR of 0.98%, essentially providing no value addition. At an 8% return scenario, the fund value is ₹42.41 lakhs with an IRR of 5.78% as per the ABSLI Salaried Suraksha ULIP maturity calculator.

Although the policy term under the ABSLI Salaried Suraksha Plan is 30 years, the returns are not favourable for long-term investment.

Over time, inflation will increase the cost of your life goals, while the returns from the ABSLI Salaried Suraksha ULIP may not keep pace. This indicates a potential shortfall in the required corpus if you choose the ABSLI Salaried Suraksha ULIP.

ABSLI Salaried Suraksha ULIP Vs Other Investments

The ABSLI Salaried Suraksha ULIP is a market-linked product, yet its returns do not even match those of a debt instrument. The risk and return are not proportionate in this case. To achieve better risk-adjusted returns, let’s explore alternative investment opportunities.

ULIPs combine insurance and investment, but separating the two can be more beneficial. Using the same metrics from the previous illustration, let’s examine two scenarios.

ABSLI Salaried Suraksha ULIP Vs Pure-Term + PPF / ELSS

For life insurance, a pure term life insurance policy with a sum assured of ₹1 crore costs ₹35,100 annually. The policy term is 65 years, with a premium-paying term of 10 years. After paying the premium, you have ₹64,100 left for investment.

In the previous ULIP illustration, the premium-paying term was 12 years, while for a pure-term policy, it is 10 years. For the first 10 years, premiums are paid first, and the remaining amount is invested. In the following 2 years, the entire amount can be invested.

Pure Term Life Insurance Policy
Sum Assured	₹ 1,00,00,000
Policy Term	30 years
Premium Paying Term	12 years
Annualised Premium	₹ 35,100
Investment	₹ 64,900

Investment choices can be based on your personal risk tolerance. Risk-averse investors can opt for debt instruments like PPF, while risk-tolerant investors can choose equity instruments like ELSS funds.

		Term Insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death benefit	Term Insurance premium + ELSS	Death benefit
35	1	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
36	2	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
37	3	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
38	4	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
39	5	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
40	6	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
41	7	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
42	8	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
43	9	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
44	10	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
45	11	0	1,00,00,000	0	1,00,00,000
46	12	0	1,00,00,000	0	1,00,00,000
47	13	0	1,00,00,000	0	1,00,00,000
48	14	0	1,00,00,000	0	1,00,00,000
49	15	0	1,00,00,000	0	1,00,00,000
50	16	0	1,00,00,000	0	1,00,00,000
51	17	0	1,00,00,000	0	1,00,00,000
52	18	0	1,00,00,000	0	1,00,00,000
53	19	0	1,00,00,000	0	1,00,00,000
54	20	0	1,00,00,000	0	1,00,00,000
55	21	0	1,00,00,000	0	1,00,00,000
56	22	0	1,00,00,000	0	1,00,00,000
57	23	0	1,00,00,000	0	1,00,00,000
58	24	0	1,00,00,000	0	1,00,00,000
59	25	0	1,00,00,000	0	1,00,00,000
60	26	0	1,00,00,000	0	1,00,00,000
61	27	0	1,00,00,000	0	1,00,00,000
62	28	0	1,00,00,000	0	1,00,00,000
63	29	0	1,00,00,000	0	1,00,00,000
64	30	0	1,00,00,000	0	1,00,00,000
65		45,65,969		1,27,92,393

	IRR	6.08%		10.34%

A PPF account requires a minimum contribution of ₹500 per year for 15 years. Since the premium-paying term is 12 years, adjustments are made in the last three years. The final maturity value at the end of 30 years is ₹45.65 lakhs with an IRR of 6.08%.

In the ELSS fund scenario, the pre-tax value is ₹1.41 crores. After accounting for capital gains tax, the final maturity amount is ₹1.27 crores with an IRR of 10.34% (post-tax return).

ELSS Tax Calculation
Maturity value after 30 years	1,41,30,548
Purchase price	6,49,000
Long-Term Capital Gains	1,34,81,548
Exemption limit	1,00,000
Taxable LTCG	1,33,81,548
Tax paid on LTCG	13,38,155
Maturity value after tax	1,27,92,393

PPF is a debt instrument, yet its returns are higher than the 8% scenario of the ABSLI Salaried Suraksha ULIP. These returns exceed the inflation rate, thereby effectively contributing to wealth accumulation, which is lacking in the ABSLI Salaried Suraksha ULIP.

Final verdict on ABSLI Salaried Suraksha ULIP

The ABSLI Salaried Suraksha ULIP is designed for salaried individuals, offering both life cover and market investment opportunities. However, like other ULIP plans, it imposes various charges that reduce the investable amount.

While some charges are refunded, the plan does not account for the time value of money.

The returns calculation highlights the real impact of the plan, revealing that the returns are low for a long-term investment. A market-related instrument yielding such low returns indicates a disproportionate risk-to-return ratio and also it has a high agent commission.

Investing in the ABSLI Salaried Suraksha ULIP can negatively affect your overall financial plan in the long run.

Consider opting for a pure-term life insurance policy for life cover, which can act as a shield for your family. Achieving life goals requires a solid investment portfolio, and diversifying across various asset classes can help navigate a challenging financial landscape.

Do Facebook, Twitter, and Quora have the last word when it comes to financial advice?

Choosing the right investment and insurance products involves a detailed analysis. If you find it difficult, seeking professional advice can be beneficial. A Certified Financial Planner, with their expertise, can assist you in selecting the appropriate products for your needs.