ABSLI Vision Endowment Plus Plan Review: Is It Worth Buying?

Entry Age	30 days – 60 years
Policy Term	10- 20 Years
Premium Paying Term	7,10,15,20 years & Regular pay
Minimum Sum Assured	₹ 1Lakhs
Minimum Premium	₹2495
Premium Paying Frequency	Annual,Semi-Annual, Quarterly & Monthly

 

Band	Sum Assured
Band 1	100000- 199999
Band 2	200000-399999
Band 3	400000-799999
Band 4	800000+

 Benefits under the ABSLI Vision Endowment Plus Plan

Death Benefit

In the unfortunate event of the death of the life insured during the policy term, the death benefit payable to the nominee shall be;

• Sum Assured on Death; plus 
• Accrued regular bonuses as of the date of death; plus 
• Terminal bonus (if any)

Option A – Sum Assured on death is the maximum sum assured or 10 times the annualised premium payable.

Option B – The sum Assured on death is a maximum of 150% of the sum assured or 10 times the annualised premium payable.

The death benefit will be subject to a minimum of 105% of the total premium paid up to the date of death.

Maturity Benefit

In the event of the life insured survives the policy term, the following maturity benefit will be payable;

• Sum Assured on maturity; plus 
• Accrued bonuses to date; plus 
• Terminal bonus (if any)

Grace Period, Discontinuance, Reduced paid-up & Revival of the ABSLI Vision Endowment Plan

Grace period

If you are unable to pay the premium by the due date, you will be given a grace period of 30 days. 

Discontinuance

In case, the premiums are not paid for two full years, then all benefits under the policy will cease immediately.

In case, the premiums have been paid for at least two full years, then your policy will continue on a Reduced Paid-Up basis

Reduced paid-up

In case of discontinuance of premiums after having paid premiums for at least two full years, the policy will not lapse but continue on a Reduced Paid-Up basis.

Under Reduced Paid-Up, your sum assured and sum assured on maturity shall be reduced in proportion to the number of premiums actually paid to the total premiums payable during the premium-paying term.

Revival

You can revive your policy for its full coverage within five years from the due date of the first unpaid premium by paying all outstanding premiums together with interest.

Free Look-Up Period of the ABSLI Vision Endowment Plus Plan

You will have the right to return your policy to the corporation within 15 days or 30 days in case the policy was issued through Distance Marketing or online under the provisions of IRDAI Guidelines on Distance Marketing of Insurance products from the date of receipt of the policy.

Surrendering the ABSLI Vision Endowment Plus Plan

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 the higher Guaranteed Surrender Value or Special Surrender Value.

Advantages of the ABSLI Vision Endowment Plus Plan

• A part of the benefits is a guaranteed amount.
• Premium Rebate for higher sum assured.
• Simple revisionary bonus enhances your benefit.
• Loan option is available with a maximum of 85% of surrender value.
• Riders enhance your life cover.

Disadvantages of the ABSLI Vision Endowment Plus Plan

• The plan has inadequate life cover.
• The maturity benefit will not be sufficient to meet any of your financial goals.

You can refer to the ABSLI Vision Endowment Plus Policy Brochure for more details.

Research Methodology

Let us take this analysis to the next level & find out how the ABSLI Vision Endowment Plus Policy will benefit you in terms of returns. 

For this purpose, let us find out the Internal Rate Return (IRR) of the ABSLI Vision Endowment Plus Plan. 

Comparing the return of the ABSLI Vision Endowment Plus Plan with other investment alternatives will help you in your decision-making.

IRR Analysis of the ABSLI Vision Endowment Plus Plan

Let us assume that a  35-year-old male buys the ABSLI Vision Endowment Plus Plan for a sum assured of ₹ 2,50,000, policy term of 20 years & premium paying term is 10 years. The annual premium is ₹ 18,430. If he pays a premium for 10 years, he gets the maturity benefit after 20 years.

Male	35 years
Sum Assured	2,50,000
Policy term	20 years
Premium paying term	10 years
Annualised premium	18430

		At 4% p.a.		At 8% p.a.
Age	Year	Annualised premium / Maturity benefit	Death benefit	Annualised premium / Maturity benefit	Death benefit
35	1	-18,430	2,50,000	–18,430	2,50,000
36	2	-18,430	2,50,000	-18,430	2,50,000
37	3	-18,430	2,50,000	-18,430	2,50,000
38	4	-18,430	2,50,000	-18,430	2,50,000
39	5	-18,430	2,50,000	-18,430	2,50,000
40	6	-18,430	2,50,000	-18,430	2,50,000
41	7	-18,430	2,50,000	-18,430	2,50,000
42	8	-18,430	2,50,000	-18,430	2,50,000
43	9	-18,430	2,50,000	-18,430	2,50,000
44	10	-18,430	2,50,000	-18,430	2,50,000
45	11	0	2,50,000	0	2,50,000
46	12	0	2,50,000	0	2,50,000
47	13	0	2,50,000	0	2,50,000
48	14	0	2,50,000	0	2,50,000
49	15	0	2,50,000	0	2,50,000
50	16	0	2,50,000	0	2,50,000
51	17	0	2,50,000	0	2,50,000
52	18	0	2,50,000	0	2,50,000
53	19	0	2,50,000	0	2,50,000
54	20	0	2,50,000	0	2,50,000
55		2,22,585	2,50,000	4,05,085	2,50,000
	IRR	1.22%		5.14%

The maturity benefit includes both the guaranteed & non-guaranteed amount. The non-guaranteed amount is based on the performance of the company.

The illustration is based on the assumed return of 4% & 8% p.a. The returns are illustrative and not guaranteed, subject to Policy terms & conditions and do not indicate the upper or lower limits of returns under the Policy.

The IRR under the 4% scenario is 1.22% & the IRR for the 8% scenario is 5.14%. Both these rates are far below a bank FD rate. 

This rate is not appreciable for a long-term investment. For a policy term of 20 years, your funds get locked & the return is also not beneficial. 

The maturity benefit will not be sufficient to meet any of your financial goals. Also, the death benefit is very meagre compared to other policies available in the market.

ABSLI Vision Endowment Plus Plan Vs. Other Investment Choices

Any investment should yield more than the inflation rate. 

ABSLI Vision Endowment Plus Plan fails to beat the inflation. 

So, let us look for other investment products with better investment returns.  

In the above illustration, the death benefit is inadequate. 

The minimum sum assured for the Saral Jeevan Bima policy (Standard Pure Term Insurance) is ₹ 5lakhs. 

ABSLI Vision Endowment Plus Plan Vs. Pure Term Insurance + ELSS/PPF

For life cover, let us assume a sum assured of ₹ 5 lakhs – Pure Term Insurance. The annual premium for Pure Term Insurance would cost ₹ 4,300.  

After paying the premium for the Pure Term Policy, the balance could be utilised for investment purposes. 

The investment vehicle could be equity or debt based on your risk appetite.

Pure Term Insurance Policy
Sum Assured	500000
Policy term	20 years
Premium paying term	10 years
Annualised premium	4300
Balance amount (PPF/ELSSinvestment)	14130

PPF – 15-year minimum contribution is compulsory. But in the illustration, the premium paying term is 10 years.  For comparison, adjustments are made in the next 5 years.

A minimum contribution of ₹ 500 is made in the last 5 years. After 15 years, it is extended for the next 5 years. The final maturity value is available at the end of 20 years. 

ELSS – For the first 10 years, the balance amount is invested in the ELSS Mutual Fund. 

In the next 10 years, the fund grows & the proceeds are available after 20 years. The ELSS capital gain is taxed. The tax calculation is given below.

		Term Insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death benefit	Term Insurance premium + ELSS	Death benefit
35	1	-18,430	5,00,000	18,430	5,00,000
36	2	-18,430	5,00,000	-18,430	5,00,000
37	3	-18,430	5,00,000	-18,430	5,00,000
38	4	-18,430	5,00,000	-18,430	5,00,000
39	5	-18,430	5,00,000	-18,430	5,00,000
40	6	-18,430	5,00,000	-18,430	5,00,000
41	7	-18,430	5,00,000	-18,430	5,00,000
42	8	-18,430	5,00,000	-18,430	5,00,000
43	9	-18,430	5,00,000	-18,430	5,00,000
44	10	-15,930	5,00,000	-18,430	5,00,000
45	11	-500	5,00,000	0	5,00,000
46	12	-500	5,00,000	0	5,00,000
47	13	-500	5,00,000	0	5,00,000
48	14	-500	5,00,000	0	5,00,000
49	15	-500	5,00,000	0	5,00,000
50	16	0	5,00,000	0	5,00,000
51	17	0	5,00,000	0	5,00,000
52	18	0	5,00,000	0	5,00,000
53	19	0	5,00,000	0	5,00,000
54	20	0	5,00,000	0	5,00,000
55		4,16,165	5,00,000	8,00,428	5,00,000
	IRR	5.33%		9.69%

ELSS Post-Tax Calculation

Maturity value after 20 years	8,62,554
Less
Purchase price	1,41,300
Long-term capital gains	7,21,254
Exemption limit	1,00,000
Taxable LTCG	6,21,254
Tax paid on LTCG	62,125
Maturity value after tax	8,00,428

The IRR for the Pure Term Insurance + PPF is 5.33% & the IRR for the Pure Term Insurance + ELSS (Post-tax) is 9.69%. 

Here we have assumed a Pure Term Insurance Cover of ₹ 5 lakhs (Minimum Pure Term Cover recommended by IRDAI). 

That is the reason why the PPF IRR is similar to the ABSLI Vision Endowment Plus Plan (8% scenario) IRR. 

The IRR of the ELSS investment is better than the ABSLI Vision Endowment Plus Plan & also provides you with an inflation-beating return. 

Final Verdict on the ABSLI Vision Endowment Plus Plan

An Endowment Plan will inculcate the habit of regular savings & give financial protection to your family in case of contingencies. 

ABSLI Vision Endowment Plus Plan works in the same way. You can regularly route your savings in this plan & at the same time, it provides you with life cover.

But when you look at the returns, it is not beneficial for a long-term investor. A long-term investment return should be higher than the inflation rate. 

The potential return of the ABSLI Vision Endowment Plus Plan is not beneficial to an investor. The maturity benefit is meagre to meet your life’s financial goals.

Always consult your Financial Advisor before selecting your Investment Product. 

A Pure Term Life Insurance Policy is available at a moderate premium with a high life cover. A separate Investment Portfolio will help to meet your life’s Financial Goals.