ABSLI Wealth Smart Plus Plan
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?
What are the features of the ABSLI Wealth Smart Plus Plan?
Who is eligible for the ABSLI Wealth Smart Plus Plan?
What are the benefits of the ABSLI Wealth Smart Plus Plan?
What are the Investment strategies and Fund options in the ABSLI Wealth Smart Plus Plan?
What are the Charges under the ABSLI Wealth Smart Plus Plan?
Grace period, Discontinuance and Revival of ABSLI Wealth Smart Plus Plan
Free Look Period of ABSLI Wealth Smart Plus Plan
Surrendering ABSLI Wealth Smart Plus Plan
What are the advantages of the ABSLI Wealth Smart Plus Plan?
What are the disadvantages of the ABSLI Wealth Smart Plus Plan?
Research Methodology of the ABSLI Wealth Smart Plus Plan
Benefit Illustration – IRR Analysis of ABSLI Wealth Smart Plus Plan
ABSLI Wealth Smart Plus Plan Vs other investments
ABSLI Wealth Smart Plus Plan Vs Pure Term + ELSS
Final Verdict on 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.
| 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 |
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
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
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.
Under ABSLI Wealth Smart Plus, you can choose to invest your premiums in one of the five investment strategies.
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.
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.
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% | – | ||
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.
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% |
NIL
NIL
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
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 |
NIL
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.
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 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.
The ABSLI Wealth Smart Plus Plan policy can be revived within the revival period of three years.
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 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.
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.
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.
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.
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.
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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