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Can the ABSLI Wealth Aspire Plan secure your future and achieve your long-term goals by investing in a comprehensive and flexible plan?
Can the ABSLI Wealth Aspire Plan genuinely stand out as the optimal choice for securing your family’s future?
Can the ABSLI Wealth Aspire Plan offer guaranteed benefits along with market-linked returns for a prosperous tomorrow?
This article will delve into the plan’s features, advantages, disadvantages, costs involved, and returns through IRR analysis, offering you valuable insights into how the plan works.
Table of Contents:
What is the ABSLI Wealth Aspire Plan?
What are the features of the ABSLI Wealth Aspire Plan?
Who is eligible for the ABSLI Wealth Aspire Plan?
What are the benefits of the ABSLI Wealth Aspire Plan?
Investment Strategies and Fund Options in ABSLI Wealth AspirePlan
What are the charges in the ABSLI Wealth Aspire Plan?
Grace period, Discontinuance and Revival of the ABSLI Wealth Aspire Plan
Free Look period of ABSLI Wealth Aspire Plan
Surrendering ABSLI Wealth Aspire Plan
What are the advantages of the ABSLI Wealth Aspire Plan?
What are the disadvantages of the ABSLI Wealth Aspire Plan?
Research Methodology of ABSLI Wealth Aspire Plan
Benefit Illustration – IRR Analysis of ABSLI Wealth Aspire Plan
ABSLI Wealth Aspire Plan Vs. Other Investments
ABSLI Wealth Aspire Plan Vs. Pure-Term + ELSS
Final Verdict on the ASBL Wealth Aspire Plan
What is the ABSLI Wealth Aspire Plan?
Aditya Birla Sun Life Insurance Wealth Aspire Plan is a unit-linked life insurance plan. ABSLI Wealth Aspire Plan helps you fulfil your goals by offering to empower you in wealth creation as well as provides protection to you.
What are the features of the ABSLI Wealth Aspire Plan?
- Option to select from two plan variants tailored to your aspirations
- Choice of various policy terms to fit your needs
- Selection of multiple premium payment terms for convenience
- Availability of four investment options to match your investment goals
- Ability to add top-ups whenever you have extra savings
- Facility for partial withdrawals to address emergency fund requirements
Who is eligible for the ABSLI Wealth Aspire Plan?
| Classic Option | Assured Option | |
| Entry Age | Minimum – 30 days Maximum – For 5 Pay: 50 years For 6 Pay & 7 Pay: 55 years For 8 Pay and above: 65 years |
Minimum -18 years Maximum -For 5 to 8 Pay: 45 years For 9 Pay and above: 50 years |
| Maturity Age | Minimum: 18 years Maximum: For 5 to 7 Pay: 70 years For 8 Pay and above: 75 years |
Minimum: 28 years Maximum: 60 years |
| Premium Payment Mode | Annual, Semi-Annual, Quarterly and Monthly | |
| Minimum Annualized Premium | 40,000 p.a. for annual mode 45,000 p.a. for semi-annual mode 50,000 p.a. for quarterly and monthly mode 5,00,000 p.a. if the age at entry is between 61 to 65 years, both inclusive |
|
| Maximum Annualized Premium | No Limit | |
| Minimum Sum Assured | 4,00,000 | |
| Premium Payment Term (PPT) |
Minimum – 5 years Maximum – 40 years |
|
| Minimum Policy Term | 10 years | |
| Maximum Policy Term | 40 years | |
| Top-up Premium | Minimum – ₹ 5000 | |
What are the benefits of the ABSLI Wealth Aspire Plan?
1.) Death Benefit
Classic Option
In the unfortunate event, that the life insured dies while the ABSLI Wealth Aspire Plan policy is in effect, the nominee will get the higher of:
- Fund Value as on date of intimation of death; or
- Sum Assured
Assured Option
In the unfortunate event, that the life insured dies while the ABSLI Wealth Aspire Plan policy is in force, the nominee will get higher of:
- Sum Assured on the date of death, and Top-up Sum assured
- 105% of the Annualized Premiums paid (excluding GST, if any)
Further, the ABSLI Wealth Aspire Plan policy will not terminate once this death benefit is paid to the nominee and it continues till the policy maturity date.
2.) Maturity benefit
Under both Options, at the end of the ABSLI Wealth Aspire Plan Policy Term, the Fund Value plus the top-up fund value in a lump sum is payable to you.
3.) Guaranteed Additions
On the 6th policy anniversary (11th policy anniversary for Band 1) and every policy anniversary thereafter, Guaranteed Addition as a percentage of the average Policy Fund Value in the last 12 months will be added to your ABSLI Wealth Aspire Plan policy.
On the 10th policy anniversary and on every 5th policy anniversary thereafter, an Extra Guaranteed Addition is added to the fund value.
Investment Strategies and Fund Options in ABSLI Wealth Aspire Plan
Under ABSLI Wealth Aspire Plan, you decide how to invest your premiums in one of the four investment options – Smart Option, Systematic Transfer Option, Return Optimiser Option or the Self-Managed Option.
i.) Smart 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 |
||
|
31 to 40 |
80% |
20% |
65% |
35% |
50% |
50% |
|
|
21 to 30 |
65% |
35% |
50% |
50% |
35% |
65% |
|
|
16 to 20 |
50% |
50% |
40% |
60% |
30% |
70% |
|
|
11 to 15 |
35% |
65% |
25% |
75% |
15% |
85% |
|
|
6 to 10 |
15% |
85% |
10% |
90% |
5% |
95% |
|
|
0 to 5 |
0% |
100% |
0% |
100% |
0% |
100% |
|
ii.) 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%. This option is available only if you have opted for a policy taken with annual mode as their Premium Payment mode
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
iii.) 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.
iv.) Self-Managed Option
The ABSLI Wealth Aspire 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% | – | |
What are the charges in the ABSLI Wealth Aspire Plan?
A. Premium allocation charge
A premium allocation charge is levied on the Basic Premium and Top-Up Premium when received
| Policy Year / Premium Band | Band 1 | Band 2 | Band 3 |
| 1 | 7% | 6% | 4.5% |
| 2+ | 5% | 4% | 3% |
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 | Band 1 | Band 2 & 3 |
| Year 1 to 5 | ₹ 450 p.a. | 1.2% of Annualized Premium p.a. |
| Year 6 and subsequent years | ₹ 600 p.a. inflating @5% thereafter | NIL |
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 Aspire 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 | 1.088 | 1.0452 | 3.339 | 9.037 | 19.509 |
| Female | 1.047 | 1.255 | 2.469 | 6.981 | 15.351 |
E. Miscellaneous Charges
NIL
F. Surrender Charges
The charge on discontinuance or surrender of the ABSLI Wealth Aspire Plan policy will be based on the year of discontinuance/surrender, the premium amount and the fund value.
G. Miscellaneous charge
₹ 50 per request for change in investment option, premium re-direction, fund switch and partial withdrawal.
Inference from the charges – The charges under the ABSLI Wealth Aspire 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 Wealth Aspire 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 Wealth Aspire 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 Wealth Aspire 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 Wealth Aspire Plan policy within the revival period of three years.
Free Look period of ABSLI Wealth Aspire Plan
You will have the right to return your ABSLI Wealth Aspire 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 Wealth Aspire Plan
Surrendering during the first five policy years: you will have an option to surrender the ABSLI Wealth Aspire Plan 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 Wealth Aspire 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 Wealth Aspire Plan?
- Riders can be added to the base policy
- 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.
- Under the Self-Managed option, you can choose to redirect future premiums.
What are the disadvantages of the ABSLI Wealth Aspire Plan?
- Policy loans are not permitted under this ABSLI Wealth Aspire Plan .
- There is no liquidity available during the first policy years.
- The sum assured is inadequate.
Research Methodology of ABSLI Wealth Aspire Plan
The ABSLI Wealth Aspire Plan offers a market-linked investment opportunity that comes with inherent risks. As investors, it’s essential to evaluate the returns and determine if they are proportionate to the risks involved.
Let’s consider a scenario to estimate the Internal Rate of Return (IRR) of the ABSLI Wealth Aspire Plan.
Benefit Illustration – IRR Analysis of ABSLI Wealth Aspire Plan
A 35-year-old male purchases the ABSLI Wealth Aspire Plan with a sum assured of ₹15 Lakhs. The policy term is 15 years, and the premium paying term is 10 years, with an annual premium of ₹1.5 Lakhs. He selects the classic option.
| Male | 35 years |
| Sum Assured | ₹ 15,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,50,000 |
If he consistently pays the premiums, he will receive the fund value as a maturity benefit. According to illustrations, an assumed rate of future investment returns is 8% per annum. This rate is not guaranteed and does not represent the upper or lower limits of potential returns.
| At 8% p.a. | |||
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -1,50,000 | 15,00,000 |
| 36 | 2 | -1,50,000 | 15,00,000 |
| 37 | 3 | -1,50,000 | 15,00,000 |
| 38 | 4 | -1,50,000 | 15,00,000 |
| 39 | 5 | -1,50,000 | 15,00,000 |
| 40 | 6 | -1,50,000 | 15,00,000 |
| 41 | 7 | -1,50,000 | 15,00,000 |
| 42 | 8 | -1,50,000 | 15,00,000 |
| 43 | 9 | -1,50,000 | 15,00,000 |
| 44 | 10 | -1,50,000 | 15,00,000 |
| 45 | 11 | 0 | 15,00,000 |
| 46 | 12 | 0 | 15,00,000 |
| 47 | 13 | 0 | 15,00,000 |
| 48 | 14 | 0 | 15,00,000 |
| 49 | 15 | 0 | 15,00,000 |
| 50 | 28,04,000 | 15,00,000 | |
| 6.00% | |||
At an 8% return scenario, the fund value is projected to be ₹28.04 Lakhs with an IRR of 6.00% as per the ABSLI Wealth Aspire Plan maturity calculator.
This rate of return does not seem proportionate to the risk undertaken. Investors typically aim to generate alpha from equity investments to comfortably outpace inflation over the long term.
However, the potential return of the ABSLI Wealth Aspire Plan is comparable to that of debt instruments, making it challenging to consider this plan as an equity investment within your portfolio.
ABSLI Wealth Aspire Plan Vs. Other Investments
The ABSLI Wealth Aspire Plan claims to be a market-linked product, but its returns are not convincing. Other market-related products offer better yields and greater transparency in investment.
In this segment, we will compute the returns of similar investments and compare them with the ABSLI Wealth Aspire Plan. The ABSLI Wealth Aspire Plan combines both life cover and investment, which we will split for this comparison.
ABSLI Wealth Aspire Plan Vs. Pure-Term + ELSS
For the same metrics, a pure term life insurance policy with a sum assured of ₹15 Lakhs costs ₹7,100 annually. The policy term is 15 years with a premium paying term of 10 years. This pure-term policy allows you to save ₹1,42,900 per year, which could then be invested.
|
Pure Term Life Insurance Policy |
|
|
Sum Assured |
₹ 15,00,000 |
|
Policy Term |
15 years |
|
Premium Paying Term |
10 years |
|
Annualised Premium |
₹ 7,100 |
|
Investment |
₹ 1,42,900 |
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 35 | 1 | -1,50,000 | 15,00,000 |
| 36 | 2 | -1,50,000 | 15,00,000 |
| 37 | 3 | -1,50,000 | 15,00,000 |
| 38 | 4 | -1,50,000 | 15,00,000 |
| 39 | 5 | -1,50,000 | 15,00,000 |
| 40 | 6 | -1,50,000 | 15,00,000 |
| 41 | 7 | -1,50,000 | 15,00,000 |
| 42 | 8 | -1,50,000 | 15,00,000 |
| 43 | 9 | -1,50,000 | 15,00,000 |
| 44 | 10 | -1,50,000 | 15,00,000 |
| 45 | 11 | 0 | 15,00,000 |
| 46 | 12 | 0 | 15,00,000 |
| 47 | 13 | 0 | 15,00,000 |
| 48 | 14 | 0 | 15,00,000 |
| 49 | 15 | 0 | 15,00,000 |
| 50 | 45,25,310 | 15,00,000 | |
| 10.65% | |||
Depending on your risk appetite, you could choose either equity (high-risk) or debt (low-risk) investments. In this scenario, we select an ELSS fund for investment. The fund value at the end of 15 years is ₹49.49 Lakhs.
These maturity proceeds are subject to capital gains tax, resulting in a post-tax value of ₹45.25 Lakhs. The IRR for the ELSS investment, combined with the pure-term life insurance policy, is 10.65% (post-tax return).
|
ELSS Tax Calculation |
|
|
Maturity value after 15 years |
49,49,783 |
|
Purchase price |
14,29,000 |
|
Long-Term Capital Gains |
35,20,783 |
|
Exemption limit |
1,25,000 |
|
Taxable LTCG |
33,95,783 |
|
Tax paid on LTCG |
4,24,473 |
|
Maturity value after tax |
45,25,310 |
These returns are significantly superior to those of the ABSLI Wealth Aspire Plan. They are higher than the inflation rate, thereby accelerating your wealth accumulation over the long run. Splitting the insurance and investment always yields better results.
Final Verdict on the ASBL Wealth Aspire Plan
The ABSLI Wealth Aspire Plan offers a variety of fund options and investment strategies to choose from based on personal preferences.
However, these options do not add significant value because the potential returns are subpar for a long-term investment. The main reason for the low returns is the high charges and also it has a high agent commission.
Any market-related instrument should help accumulate wealth over the long term, but the ABSLI Wealth Aspire Plan falls short in this regard. Additionally, the sum assured is inadequate. These two aspects make the ABSLI Wealth Aspire Plan unsuitable for your investment portfolio.
Your equity investment portfolio requires higher-yielding products to achieve your goals. Therefore, it is better to opt for a pure-term policy for adequate life cover and build an investment portfolio based on your risk appetite, life goals, and time horizon. Never combine insurance and investment.
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