ABSLI Wealth Smart Plus Plan: Good or Bad? A Detailed ULIP Review

Q: What are the benefits of the ABSLI Wealth Smart Plus Plan?

Death Benefit In case of Death of the Life Insured anytime during the ABSLI Wealth Smart Plus Plan Policy Term, the nominee/legal heir will get the higher of Fund Value as on date of intimation of death of the Life Insured; or Sum Assured (reduced by partial withdrawals made during the two years immediately preceding the date of death of the Life Insured, if any) or 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-year period immediately preceding the death of the life insured. Where the Sum Assured is 10 times the Annualized Premium for entry ages up to 50 years and 7 times the Annualized Premium for entry ages above 50 years Maturity Benefit On survival of Life Insured up to the end of the ABSLI Wealth Smart Plus Plan Policy Term, the Fund Value in a lump sum or as a structured payout using Settlement Option is payable as maturity benefit.

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Can the ABSLI Wealth Smart Plus Plan grow your wealth and secure your financial future?

Is ABSLI Wealth Smart Plus Plan that combines the best of wealth creation and insurance protection?

Does the ABSLI Wealth Smart Plus Plan offer such assurance?

In this review, we will examine the ABSLI Wealth Smart Plus plan’s features, advantages, disadvantages, costs, and returns through an IRR analysis. Evaluating these aspects before investing allows for an informed decision.

What is the ABSLI Wealth Smart Plus Plan?

Aditya Birla Sun Life Insurance Wealth Smart Plus Plan is a Unit-Linked Non-Participating Individual Life Insurance Savings Plan. Aditya Birla Sun Life Insurance Wealth Smart Plus Plan focuses on providing investment options and acts as a tool for securing your financial future.

What are the features of the ABSLI Wealth Smart Plus Plan?

Two Plan Options – Smart Life Option (coverage till Age 75) and Whole Life Option (coverage till Age 100)
Zero Premium Allocation Charge and Zero Policy Administration Charge throughout Aditya Birla Sun Life Insurance Wealth Smart Plus Plan Policy Term
Choice of 5 investment strategies and 20 funds to suit your varied investment needs.
Systematic Withdrawal Facility to enable regular withdrawals from your Fund Value during the Aditya Birla Sun Life Insurance Wealth Smart Plus Plan policy term to cater to your recurring monetary needs
Tax Benefits will be applicable on Premiums paid and Benefits received as per prevailing tax laws.
Flexibility of partial withdrawals to meet any emergency fund requirements

Who is eligible for the ABSLI Wealth Smart Plus Plan?

	Smart Life option	Whole Life option
Entry Age	Minimum – 30 days Maximum – 60 years	Minimum – 18 years Maximum: 5 pay – 40 years 6 pay and above – 45 years For Regular pay – 45 years
Maturity Age	Minimum – 18 years Maximum – 75 years	100 years
Premium Payment Mode	Annual, Semi-annual, Quarterly, Monthly
Minimum Premium	Annual – ₹ 12,000 Semi-annual – ₹ 6,000 Quarterly – ₹ 3,0000 Monthly – ₹ 1,000
Maximum premium	No limit
Minimum Sum Assured	For Entry Age: 30 days to 50 years – ₹1,20,000 For Entry Age: 51 years and above – ₹ 84,000	₹ 1,20,000
Maximum Sum Assured	No limit
Premium Payment Term (PPT)	Limited pay: 5 to 15 years Regular Pay: 10 to 40 years	Limited pay: 5 to 15 years Regular Pay: 100 minus entry age
Minimum Policy term	Limited pay: 5 to 9 years – 10 years Limited pay 10 to 15 years – PPT + 1 Regular Pay: 10 years	100 minus entry age
Maximum Policy term	40 years	100 minus entry age

What are the benefits of the ABSLI Wealth Smart Plus Plan?

Death benefit

In case of Death of the Life Insured anytime during the ABSLI Wealth Smart Plus Plan Policy Term, the nominee/legal heir will get the higher of

Fund Value as on date of intimation of death of the Life Insured; or
Sum Assured (reduced by partial withdrawals made during the two years immediately preceding the date of death of the Life Insured, if any) or
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-year period immediately preceding the death of the life insured.

Where the Sum Assured is 10 times the Annualized Premium for entry ages up to 50 years and 7 times the Annualized Premium for entry ages above 50 years

Maturity benefit

On survival of Life Insured up to the end of the ABSLI Wealth Smart Plus Plan Policy Term, the Fund Value in a lump sum or as a structured payout using Settlement Option is payable as maturity benefit.

What are the Investment strategies and Fund options in the ABSLI Wealth Smart Plus Plan?

Under ABSLI Wealth Smart Plus, 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.

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

Nifty Alpha 50 Index Fund

Nifty Midcap150 Momentum 50 Index

This option is available only for the premium payable in annual mode.

ii.) Return Optimiser 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 20 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%
19	Nifty Alpha 50 Index Fund	High	0-20%	0-20%	80-100%
20	Nifty Midcap150 Momentum 50 Index	High	0-10%	0-10%	90-100%
			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%

v.) Life-cycle Investment Option

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.

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 Wealth Smart Plus Plan?

1. Premium Allocation Charge

NIL

2. Policy Administration Charge

NIL

3. 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, Small Cap Fund, Nifty Alpha 50 Index Fund, and Value & Momentum, Nifty Midcap150 Momentum 50 Index

0.50% p.a. for Linked Discontinued Policy Fund

4. Mortality charge

It is based on the Sum at Risk and is deducted at the start of each month by the cancellation of units proportionately 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	1.30	1.68	3.61	10.52	22.30
Female	1.30	1.46	2.76	7.77	17.96

5. Miscellaneous Charges

NIL

6. Discontinuance / Surrender charges

It depends on the year of discontinuance/surrender, the annualised premium amount and the fund value.

Inference from the charges: Compared to other ULIP products, the charges of the ABSLI Wealth Smart Plus Plan are lower. This is a significant advantage for investors. Generally, ULIP products lack the transparency in costs and investments that are found in other market-related instruments.

Grace period, Discontinuance and Revival of ABSLI Wealth Smart Plus Plan

Grace Period

You will be given a Grace Period of 30 days (15 days for monthly mode of premium payment) to pay the due instalment premium.

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.

In case You do not exercise the revival option, your ABSLI Wealth Smart Plus Plan policy shall continue without any risk cover and rider cover, if any, and the Fund Value shall remain invested in the Linked Discontinued Policy Fund.

At the end of the lock-in period, the proceeds in the Linked Discontinued Fund shall be paid to you and your ABSLI Wealth Smart Plus Plan policy will terminate.

Discontinuance after the first five policy years: your ABSLI Wealth Smart Plus 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

The ABSLI Wealth Smart Plus Plan policy can be revived within the revival period of three years.

Free Look Period of ABSLI Wealth Smart Plus Plan

You will have the right to return your ABSLI Wealth Smart Plus Plan Policy within 30 days from the date of receipt of the Policy, in case You disagree with the terms & conditions of Your ABSLI Wealth Smart Plus Plan Policy.

Surrendering ABSLI Wealth Smart Plus Plan

Surrendering 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.

Surrendering after the first five policy years: You will have an option to surrender the policy anytime and the Fund Value shall be payable upon receipt of such request of surrender.

What are the advantages of the ABSLI Wealth Smart Plus Plan?

There is no limit on the number of switches that can be exercised in an ABSLI Wealth Smart Plus Plan policy year and all switches are free of charge.
You can change your investment option and risk profile option after the first policy year.
A maximum of 12 Premium Redirections are allowed in an ABSLI Wealth Smart Plus Plan policy year and all are free of charge.
You can receive the maturity benefit in instalments under the settlement option
You can enhance your risk coverage by adding riders at a nominal extra cost
An automated partial withdrawal facility – Systematic Withdrawal Facility (SWF) can be opted for any time the ABSLI Wealth Smart Plus Plan policy has completed 5 policy years provided the attained age of the Policyholder is 18 years or above.

What are the disadvantages of the ABSLI Wealth Smart Plus Plan?

The ABSLI Wealth Smart Plus Plan policyholder will not be able to withdraw/surrender the monies invested till the end of the fifth year from inception.
Policy loans are not allowed in this plan.
Switches are not available under the Systematic Transfer Option when the funds are in the Liquid Plus fund.
There are no loyalty additions for staying invested.

Research Methodology of the ABSLI Wealth Smart Plus Plan

The primary goal of a ULIP Plan is to channel your savings into a market-related product. Calculating potential returns is crucial for evaluating a ULIP.

In this segment, we will estimate the potential return of the ABSLI Wealth Smart Plus Plan by calculating the Internal Rate of Return (IRR) using the benefit illustration in the policy brochure.

Benefit Illustration – IRR Analysis of ABSLI Wealth Smart Plus Plan

Consider a 35-year-old male who opts for the ABSLI Wealth Smart Plus Plan with a sum assured of ₹10 Lakhs. The premium paying term is 5 years, and the ABSLI Wealth Smart Plus Plan policy term is 20 years. The annualized premium is ₹1 Lakh.

Male	35 years
Sum Assured	₹ 10,00,000
Policy Term	20 years
Premium Paying Term	5 years
Annualised Premium	₹ 1,00,000

After the premium paying term, the fund is allowed to grow, and the fund value is available at the end of 20 years. The illustrations show two different assumed rates of future investment returns: 8% p.a. and 4% p.a. as per the ABSLI Wealth Smart Plus Plan maturity calculator.

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	10,00,000	-1,00,000	10,00,000
36	2	-1,00,000	10,00,000	-1,00,000	10,00,000
37	3	-1,00,000	10,00,000	-1,00,000	10,00,000
38	4	-1,00,000	10,00,000	-1,00,000	10,00,000
39	5	-1,00,000	10,00,000	-1,00,000	10,00,000
40	6	0	10,00,000	0	10,00,000
41	7	0	10,00,000	0	10,00,000
42	8	0	10,00,000	0	10,00,000
43	9	0	10,00,000	0	10,00,000
44	10	0	10,00,000	0	10,00,000
45	11	0	10,00,000	0	10,00,000
46	12	0	10,00,000	0	10,00,000
47	13	0	10,00,000	0	10,00,000
48	14	0	10,00,000	0	10,00,000
49	15	0	10,00,000	0	10,00,000
50	16	0	10,00,000	0	10,00,000
51	17	0	10,00,000	0	10,00,000
52	18	0	10,00,000	0	10,00,000
53	19	0	10,00,000	0	10,00,000
54	20	0	10,00,000	0	10,00,000
55		7,18,924	10,00,000	14,98,985	10,00,000

	IRR	2.04%		6.27%

In the 4% scenario, the fund value is ₹7.18 Lakhs with an IRR of 2.04%. In the 8% scenario, the fund value is ₹14.98 Lakhs with an IRR of 6.27%.

These rates are low for a market-related product and are too low for a long-term investment with the ABSLI Wealth Smart Plus Plan policy term of 20 years. Additionally, the funds are locked until the end of the policy term.

The ABSLI Wealth Smart Plus Plan lacks liquidity, and the return generation does not justify the risk.

ABSLI Wealth Smart Plus Plan Vs other investments

Any market-related product should outpace inflation. Based on the previous illustration, we can infer that the ABSLI Wealth Smart Plus Plan falls short in terms of risk-adjusted returns.

Therefore, we will explore better risk-adjusted options in other market-related products using the same metrics for comparison.

ABSLI Wealth Smart Plus Plan Vs Pure Term + ELSS

The ABSLI Wealth Smart Plus Plan offers life cover of ₹10 Lakhs and market-related investment opportunities. For comparison, let’s consider a pure term life insurance policy with a sum assured of ₹10 Lakhs, costing an annual premium of ₹16,400 for 5 years with a policy term of 20 years.

This leaves a balance of ₹83,600 for investment.

Pure Term Life Insurance Policy
Sum Assured	₹ 10,00,000
Policy Term	20 years
Premium Paying Term	5 years
Annualised Premium	₹ 16,400
Investment	₹ 83,600

We choose an ELSS fund, a market-related instrument, as the investment vehicle. At the end of 20 years, the fund value is ₹32.55 Lakhs. After accounting for capital gains tax, the post-tax value is ₹29.16 Lakhs. The IRR for the combined term insurance policy and ELSS investment is 10.24% (post-tax return).

Age	Year	Term Insurance premium + ELSS	Death benefit
35	1	-1,00,000	10,00,000
36	2	-1,00,000	10,00,000
37	3	-1,00,000	10,00,000
38	4	-1,00,000	10,00,000
39	5	-1,00,000	10,00,000
40	6	0	10,00,000
41	7	0	10,00,000
42	8	0	10,00,000
43	9	0	10,00,000
44	10	0	10,00,000
45	11	0	10,00,000
46	12	0	10,00,000
47	13	0	10,00,000
48	14	0	10,00,000
49	15	0	10,00,000
50	16	0	10,00,000
51	17	0	10,00,000
52	18	0	10,00,000
53	19	0	10,00,000
54	20	0	10,00,000
55		29,16,735	10,00,000

	IRR	10.24%

ELSS Tax Calculation
Maturity value after 20 years	32,55,840
Purchase price	4,18,000
Long-Term Capital Gains	28,37,840
Exemption limit	1,25,000
Taxable LTCG	27,12,840
Tax paid on LTCG	3,39,105
Maturity value after tax	29,16,735

With this investment strategy, you benefit from liquidity and returns that outpace inflation. This comparison demonstrates that separating investments from insurance typically yields better returns, helping you achieve your financial goals more effectively.

Final Verdict on ABSLI Wealth Smart Plus Plan

The ABSLI Wealth Smart Plus Plan is a typical ULIP plan that offers both life cover and market-linked investment opportunities, with a wide range of investment strategies and fund options. However, the fund options are somewhat repetitive, as the asset allocation is similar across each option.

The charges under the ABSLI Wealth Smart Plus Plan are moderately high compared to other market-linked investments. The returns analysis indicates that the risk and return are not proportionate.

Investors are generally willing to take on additional risk for higher returns. Still, this potential for “alpha” generation is lacking in the ABSLI Wealth Smart Plus Plan, ultimately failing to accelerate wealth accumulation and it also has a high agent commission

Adequate life insurance is essential as it provides a financial shield for your family. A pure-term life insurance policy offers high coverage at an affordable premium.

Combining insurance and investment is not ideal for wealth accumulation. Other market-related products tend to generate better returns than ULIP plans.

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For prudent investment selection, consult a Certified Financial Planner. They possess professional knowledge about various investment products and can choose investments based on your risk tolerance, investment horizon, and financial goals.

ABSLI Wealth Smart Plus Plan: Good or Bad? A Detailed ULIP Review

Table of Contents:

What is the ABSLI Wealth Smart Plus Plan?

What are the features of the ABSLI Wealth Smart Plus Plan?

Who is eligible for the ABSLI Wealth Smart Plus Plan?