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Can the ABSLI Wealth Max Plan offer maximum growth potential and financial security?
Could ABSLI Wealth Max Plan be the comprehensive solution for securing your financial future?
Is the ABSLI Wealth Max Plan a good fit for your preferences?
In this article, we will explore the features, advantages, disadvantages, and return analysis of the ABSLI Wealth Max Plan through IRR (Internal Rate of Return) analysis. This comprehensive review aims to guide individuals in making informed investment decisions.
Table of Contents:
- What is the ABSLI Wealth Max Plan?
- What are the features of the ABSLI Wealth Max Plan?
- Who is eligible for the ABSLI Wealth Max Plan?
- What are the benefits of the ABSLI Wealth Max Plan?
- Investment strategies and Fund options in ABSLI Wealth Max Plan
- What are the Various charges under the ABSLI Wealth Max Plan?
- Free-look Period of ABSLI Wealth Max Plan
- Discontinuance / Surrender of ABSLI Wealth Max Plan
- What are the advantages of the ABSLI Wealth Max Plan?
- What are the disadvantages of the ABSLI Wealth Max Plan?
- Research Methodology of the ABSLI Wealth Max Plan
- ABSLI Wealth Max Plan Vs Other Investments
- Final Verdict on ABSLI Wealth Max Plan
What is the ABSLI Wealth Max Plan?
Aditya Birla Sun Life Insurance Wealth Max Plan is a single-premium unit-linked life insurance plan. ABSLI Wealth Max Plan provides your family with financial security and offers the potential for better returns by investing in the market.
What are the features of the ABSLI Wealth Max Plan?
- Invest once and get benefits for the full ABSLI Wealth Max Plan policy term
- Get guaranteed additions by staying invested
- Choice of 16 funds under the Self-Managed Option
- Add top-ups whenever you have additional savings
- Flexibility of partial withdrawals to meet any emergency fund requirements
Who is eligible for the ABSLI Wealth Max Plan?
| Entry Age | 30 days – 70 years |
| Minimum Maturity age | 18 years |
| Policy term | 5, 10, 15, 20 years |
| Premium paying term | Single pay |
| Basic premium | Minimum ₹ 1,00,000 for Policy Term 5 & 10 years Minimum ₹ 2,00,000 for Policy Term 15 & 20 years |
| Basic Sum assured | 1.25 / 5 /10 times the basic premium |
What are the benefits of the ABSLI Wealth Max Plan?
1.) Death Benefit
In the unfortunate event, that the life insured dies while the ABSLI Wealth Max Plan policy is in effect, the nominee will receive the higher of:
- Basic Fund Value as on date of intimation of death; or
- Basic Sum Assured
In addition, he will also get the higher of:
- Top-up Fund Value as on date of intimation of death; or
- Top-up Sum Assured
2.) Maturity Benefit
The ABSLI Wealth Max Plan policyholder will receive the Basic Fund Value plus the Top-Up Fund Value as of that date at the end of the Policy Term.
3.) Guaranteed Additions
Additional units will be added to your ABSLI Wealth Max Plan policy:
From 6th to 10th policy anniversary – Guaranteed Addition is 0.25% of the average Policy Fund Value in the last 12 months.
From the 11th policy anniversary and every year thereafter – Guaranteed Addition is 0.60% of the average Policy Fund Value in the last 12 months.
Investment strategies and Fund options in ABSLI Wealth Max Plan
Under the ABSLI Wealth Max Plan, you can invest your basic and top-up premiums in one of the two investment options – The systematic Transfer Option or the Self-Managed Option.
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%.
This option is available only if you have opted for an ABSLI Wealth Max Plan 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
B. Self-Managed Option
The ABSLI Wealth Max 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 | Enhancer | Medium | 25-80% | 0-40% | 20-35% |
| 5 | Creator | Medium | 50-70% | 0-40% | 30-50% |
| 6 | Magnifier | High | 10-50% | 0-40% | 50-90% |
| 7 | Maximiser | High | 0-20% | 0-20% | 80-100% |
| 8 | Multiplier | High | 0-20% | 0-20% | 80-100% |
| 9 | Super 20 | High | 0-20% | 0-20% | 80-100% |
| 10 | Pure equity | High | 0-20% | 0-20% | 80-100% |
| 11 | Value & Momentum | High | 0-20% | 0-20% | 80-100% |
| 12 | Capped Nifty index | High | 0-10% | 0-10% | 90-100% |
| 13 | Asset Allocation | High | 10-80% | 0-40% | 10-80% |
| 14 | MNC | High | 0-20% | 0-20% | 80-100% |
| 15 | Protector | Low | 90-100% | 0-40% | 0-10% |
| 16 | Builder | Low | 80-100% | 0-40% | 10-20% |
| Govt Sec | Money market | Equities | |||
| Linked discontinued policy fund | Very low | 60-100% | 0-40% | – | |
What are the Various charges under the ABSLI Wealth Max Plan?
i.) Premium Allocation Charge
A premium allocation charge of 3% is levied on the basic premium when received. A premium allocation charge of 2% is levied on any top-up premium when paid.
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 Niy Index and Asset Allocation
1.35% p.a. for MNC, Magnifier, Maximiser, Multiplier, Super 20, Pure Equity and Value & Momentum
iii.) Policy Administration Charge
It is ₹ 20 per month for the first five ABSLI Wealth Max Plan policy years. It shall increase to ₹ 25 per month in the sixth year and inflate at 5% p.a. thereafter, subject to a maximum of ₹ 6,000 p.a.
iv.) Mortality charge
It is deducted at the start of every month to provide you with the risk cover. It is charged by cancelling units proportionately from each segregated fund you have at that time. The charge per 1000 of Sum at Risk will depend on the gender and attained age of the life insured.
Charge per 1000 of Sum at Risk
| Attained Age | Age 25 | Age 35 | Age 45 | Age 55 | Age 65 |
| Male | 0.643 | 0.858 | 1.973 | 5.34 | 11.528 |
| Female | 0.619 | 0.742 | 1.459 | 4.126 | 9.071 |
v.) Miscellaneous Charges
₹ 50 per request for change in investment option, fund switch, partial withdrawal or any additional servicing request.
vi.) Surrender Charges
The charge on discontinuance or surrender of the ABSLI Wealth Max Plan policy will be based on the year of discontinuance/surrender, the premium amount and the fund value
Inference from the charges – The premium is not directly invested in the market. The charges mentioned above are deducted, and only the net premium is invested.
Additionally, some of these charges continue until the end of the ABSLI Wealth Max Plan policy term, indirectly affecting your returns.
Free-look Period of ABSLI Wealth Max Plan
You will have the right to return your ABSLI Wealth Max Plan policy within 15 days (30 days in case the policy was issued under the provisions of IRDAI Guidelines on Distance Marketing of Insurance products) from the date of receipt of the policy, in case you are not satisfied with the terms & conditions of your policy.
Discontinuance / Surrender of ABSLI Wealth Max Plan
The discontinuance date is the date when you surrender the ABSLI Wealth Max Plan policy.
During the first five policy years – The policyholder has an option to surrender any time during the lock-in period. Upon receipt of the surrender request, the Policy Fund Value, after deducting the applicable discontinuance charges, shall be credited to the discontinued policy fund.
After five completed policy years – On the discontinuance date of the ABSLI Wealth Max Plan policy, the Policy Fund Value is payable and the policy will terminate.
What are the advantages of the ABSLI Wealth Max Plan?
- Riders can be added to the base policy.
- You are allowed to make unlimited partial withdrawals any time after 5 complete policy years or life insured attaining the age of 18 whichever is later.
What are the disadvantages of the ABSLI Wealth Max Plan?
- Policy loans are not allowed in this ABSLI Wealth Max Plan .
- There is no liquidity available during the first policy years.
- The sum assured is inadequate.
Research Methodology of the ABSLI Wealth Max Plan
To ensure a sufficient corpus, long-term investment returns must outpace the inflation rate. Unfortunately, the ABSLI Wealth Max Plan is likely to deliver low potential returns due to substantial charges. Moreover, the insurance component is unconvincing as the sum assured is insufficient.
For investors, both insurance and investment are crucial. The underperformance of the ABSLI Wealth Max Plan stems from combining these two aspects. Therefore, investing in the ABSLI Wealth Max Plan is not advisable.
ABSLI Wealth Max Plan Vs Other Investments
The ABSLI Wealth Max Plan is a market-linked product, but its returns do not justify the risk involved. Other market-linked options provide better risk-adjusted returns since they do not combine insurance with investment.
For life coverage, it’s advisable to choose a pure-term life insurance policy, which offers high coverage at an affordable premium. The savings from this approach can be directed into separate investments.
You can then select investment products that align with your personal risk appetite. Building a robust investment portfolio based on your life goals and time horizon will help you achieve all your financial objectives.
Final Verdict on ABSLI Wealth Max Plan
The ABSLI Wealth Max Plan offers a hassle-free single investment solution, combining life cover and market-related investment opportunities in one product. However, its numerous charges diminish returns, making it difficult to accumulate a corpus that will help you achieve your goals.
The insurance aspect of the ABSLI Wealth Max Plan is inadequate, and the sum assured is too low to support a family’s future basic needs and also it has a high agent commission.
Overall, neither the insurance nor the investment components of the ABSLI Wealth Max Plan are satisfactory, so it is best to avoid investing in it.
Investing in market-linked products involves risk, so it is essential to assess your risk profile before investing. Diversify your investment portfolio across various asset classes to navigate risk effectively. For life cover, opting for a pure-term life insurance policy is the right choice.
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