Ageas Federal Golden Years Pension Plan: Good or Bad? An Insightful ULIP Review
Is the Ageas Federal Golden Years Pension Plan truly the key to a worry-free retirement, or just another insurance product with promises on paper?
Is this plan the golden gateway to lifelong income, or simply a polished version of a traditional pension product?
Can the Ageas Federal Golden Years Pension Plan really balance growth and security, or does it fall short of expectations?
In this review, we will explore how the plan works, along with its key features, benefits, and limitations. Also, we will be discussing a case to understand the cash flow pattern of the plan.
What is the Ageas Federal Golden Years Pension Plan?
What are the features of the Ageas Federal Golden Years Pension Plan?
Who is eligible for the Ageas Federal Golden Years Pension Plan?
What are the benefits of the Ageas Federal Golden Years Pension Plan?
What are investment strategies and fund options in the Ageas Federal Golden Years Pension Plan?
What are the charges of the Ageas Federal Golden Years Pension Plan?
Grace Period, Discontinuance and Revival of the Ageas Federal Golden Years Pension Plan
Free Look Period of the Ageas Federal Golden Years Pension Plan
Surrendering the Ageas Federal Golden Years Pension Plan
What are the advantages of the Ageas Federal Golden Years Pension Plan?
What are the disadvantages of the Ageas Federal Golden Years Pension Plan?
Research Methodology of Ageas Federal Golden Years Pension Plan
Benefit Illustration – IRR Analysis of Ageas Federal Golden Years Pension Plan
Ageas Federal Golden Years Pension Plan Vs. Other Investments
Ageas Federal Golden Years Pension Plan Vs. Pure-Term + PPF/Equity Mutual Fund
Final Verdict on the Ageas Federal Golden Years Pension Plan
Ageas Federal Golden Years Pension Plan is a Unit-Linked, Non-Participating, Individual Pension Plan.
This pension plan offers a range of benefits and features like early investment boosters, Return of Allocation Charges, Golden Waiver of Premium Option, Top-up Premium and reduction in premium to ensure that your golden years are the best years of your life.
Classic Option:
Death Benefit shall be the higher of:
On payment of the Death Benefit, the Ageas Federal Golden Years Pension Plan policy shall terminate
Golden Waiver of Premium Option:
Death Benefit equals 105% of Total Premiums Paid, including top-up premiums paid, less applicable partial withdrawals.
Further, the Ageas Federal Golden Years Pension Plan policy shall continue as an in-force policy without any death cover and future premiums, if any are waived off and shall be funded on the respective due date.
Utilisation of the Death benefit
On maturity, provided all premiums due till date are paid/waived and policy is in force, Fund Value (inclusive of Return of Allocation Charge and Guaranteed Loyalty Booster) shall be payable.
Utilisation of Vesting benefit
Guaranteed Loyalty Booster
Guaranteed Loyalty Booster shall be added to the Fund at the end of every year, starting from the end of the 7th policy year, till the end of the Ageas Federal Golden Years Pension Plan policy term, provided all premiums due to date are paid/waived and the policy is in force
| Premium Paying Term | Guaranteed Loyalty Booster as a % of Annualised Premium |
| 1 & 6 | 2% |
| 8 | 2.20% |
| 10 & 11 | 2.40% |
| 12 & above | 2.50% |
Early Investment Booster
For Life Assured aged 18 to 35 years at entry, an Early Investment Booster of 25% is applicable on the Guaranteed Loyalty Booster.
Return of Allocation Charge
On maturity, provided all premiums due till date are paid/waived and policy is in force, the sum of all premium allocation charge deducted during the Ageas Federal Golden Years Pension Plan policy term (excluding Goods and Service Tax (GST) and cess, as applicable) shall be added to the Fund Value at maturity.
Self-managed strategy
You may decide to invest in any of the funds (except the Discontinued Policy Fund) provided below. The Ageas Federal Golden Years Pension Plan policyholder will also have the flexibility to change the allocation between various available funds from time to time.
| Asset Category | ||||
| Fund Name | Equities and Equity-linked instruments | Fixed Income | Cash and Money Market | Risk Profile |
| Equity Growth Fund – Pension | 50-100% | 0 | 0-50% | High |
| Income Fund – Pension | 0 | 0-100% | 0 | Moderate |
| Blue Chip Fund – Pension | 50-100% | 0 | 0-50% | High |
| Govt. Securities | Money Market Instrument | |||
| Discontinued Policy Fund – Pension | 60-100% | 0-40% | Low | |
Systematic Allocator
Under this programmed investment solution, the fund mix becomes more conservative as the investment goal approaches.
The funds are invested in the Equity Growth Fund – Pension and Income Fund – Pension on the residual time to maturity of the plan.
This strategy moves the fund allocation towards Income Fund – Pension as the plan approaches the maturity date. By reducing exposure to Equity Growth Fund – Pension, the risk of a sudden drop in the equity market affecting the accumulated value diminishes.
| Balance/Residual time to maturity of the plan (in years) | Proportion allocated to Equity Growth Fund – Pension | Proportion allocated to Income Fund – Pension |
| 1 | 5.00% | 95.00% |
| 2 | 10.00% | 90.00% |
| 3 | 15.00% | 85.00% |
| 4 | 20.00% | 80.00% |
| 5 | 25.00% | 75.00% |
| 6 | 30.00% | 70.00% |
| 7 | 35.00% | 65.00% |
| 8 | 45.00% | 55.00% |
| 9 | 50.00% | 50.00% |
| 10 | 55.00% | 45.00% |
| 11 | 60.00% | 40.00% |
| 12 | 65.00% | 35.00% |
| 13 | 70.00% | 30.00% |
| 14 | 75.00% | 25.00% |
| 15 and above | 80.00% | 20.00% |
i). Premium Allocation Charge
Premiums are allocated to the funds after deducting the Premium Allocation Charge. Premium allocation charge as a percentage of Instalment / Single Premium is as below
ii). Premium Allocation Charge
| Premium Type | Charge (throughout policy term) |
| Sigle Pay | 1% of Single Premium |
| Limited/Regular Pay | 1% of Annualised Premium |
iii). Fund Management Charge
| Fund Name | Fund Management Charge (FMC) per Annum |
| Equity Growth Fund – Pension | 1.35% |
| Income Fund – Pension | 1.25% |
| Blue Chip Fund – Pension | 1.35% |
| Discontinued Policy Fund – Pension | 0.50% |
iv). Mortality Charges
Mortality Charge is levied by cancellation of units at the beginning of each policy month as below: 1/12 x (Mortality Charge based on the attained age and gender of the Life Assured) x Sum at Risk/1000
v). Partial withdrawal charge: There is no partial withdrawal charge.
vi). Switching charge: There is no switching charge.
vii). Discontinuance Charge
The premium discontinuance charge will be decided based on the Ageas Federal Golden Years Pension Plan policy year in which the policy is discontinued, annualised/ single premium.
Inference from the charges: These charges reduce the investable amount, which in turn slows down the process of building your retirement corpus.
Other than Single Premium Policies
Grace Period
You get a grace period of 15 days for the monthly mode and 30 days for other modes (Half-Yearly or Yearly) from the date of the first unpaid premium.
Discontinuance
During the Lock-in Period: the fund value after deducting the applicable discontinuance charges shall be credited to the discontinued policy fund, and the risk cover and rider cover, if any, shall cease.
The proceeds of the Discontinued Policy Fund shall be paid to the Ageas Federal Golden Years Pension Plan policyholder at the end of the revival period or lock-in period, whichever is later.
After the Lock-in period: the policy shall be converted into a reduced paid-up policy with the paid-up sum assured, i.e. original sum assured multiplied by a ratio of “total period for which premiums have already been paid” to the “maximum period for which premiums were originally payable”.
Revival
All such discontinued policies shall be provided a revival period of three years from the date of the first unpaid premium.
In case you do not agree to any of the Ageas Federal Golden Years Pension Plan policy terms and conditions, or otherwise and have not made any claim, you have the option to return the policy within a fee look period of 30 days beginning from the date of receipt of the policy document (whether received electronically or otherwise).
A). Single Premium Policies
During the Lock-in Period: You have the option to surrender at any time during the lock-in period. Upon receipt of a request for surrender, the fund value, after deducting the applicable discontinuance charges, shall be credited to the discontinued policy fund.
The Ageas Federal Golden Years Pension Plan policy shall continue to be invested in the discontinued policy fund, and the proceeds from the discontinued fund shall be paid at the end of the lock-in period.
After the Lock-in Period: On surrender after the lock-in period, the Fund Value shall be payable.
B). Other than Single Premium Policies
Discontinuance of policy during the lock-in period: On surrender during the lock-in period, the unit fund value after deducting applicable discontinuance charges shall be credited to the discontinued policy fund, and risk cover and rider cover, if any, shall cease.
The proceeds of the discontinued policy fund shall become payable at the end of the lock-in period.
Discontinuance of policy after the lock-in-period: In case of surrender of policy, the surrender value shall be at least equal to the unit fund value as on the date of surrender.
The Ageas Federal Golden Years Pension Plan is designed to help you save for retirement.
But does it really ensure a reliable post-retirement income? To evaluate this, let’s analyse the cash flow pattern by calculating the Internal Rate of Return (IRR) using figures from the Ageas Federal Golden Years Pension Plan policy brochure.
Consider a 35-year-old male investing ₹1 lakh annually for a policy term of 25 years, with premiums payable for the first 10 years. The benefits vest at the end of the term, and the accumulated corpus must then be used—partially or fully—to purchase an annuity.
| Male | 35 years |
| Sum Assured | ₹ 10,50,000 |
| Policy Term | 25 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
The Ageas Federal Golden Years Pension Plan policy illustration provides two growth scenarios:
At 4% growth: Vesting benefit = ₹15.90 lakhs, IRR = 2.28% as per the Ageas Federal Golden Years Pension Plan maturity calculator.
At 8% growth: Vesting benefit = ₹33.90 lakhs, IRR = 6.06% as per the Ageas Federal Golden Years Pension Plan maturity calculator.
| 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 | 10,50,000 | -1,00,000 | 10,50,000 |
| 36 | 2 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 37 | 3 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 38 | 4 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 39 | 5 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 40 | 6 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 41 | 7 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 42 | 8 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 43 | 9 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 44 | 10 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 45 | 11 | 0 | 10,50,000 | 0 | 10,50,000 |
| 46 | 12 | 0 | 10,50,000 | 0 | 10,50,000 |
| 47 | 13 | 0 | 10,50,000 | 0 | 10,50,000 |
| 48 | 14 | 0 | 10,50,000 | 0 | 10,50,000 |
| 49 | 15 | 0 | 10,50,000 | 0 | 10,50,000 |
| 50 | 16 | 0 | 10,50,000 | 0 | 10,50,000 |
| 51 | 17 | 0 | 10,50,000 | 0 | 10,50,000 |
| 52 | 18 | 0 | 10,50,000 | 0 | 10,50,000 |
| 53 | 19 | 0 | 10,50,000 | 0 | 10,50,000 |
| 54 | 20 | 0 | 10,50,000 | 0 | 10,50,000 |
| 55 | 21 | 0 | 10,50,000 | 0 | 10,50,000 |
| 56 | 22 | 0 | 10,50,000 | 0 | 10,50,000 |
| 57 | 23 | 0 | 10,50,000 | 0 | 10,50,000 |
| 58 | 24 | 0 | 10,50,000 | 0 | 10,50,000 |
| 59 | 25 | 0 | 10,50,000 | 0 | 10,50,000 |
| 60 | 15,90,816 | 33,90,590 | |||
| IRR | 2.28% | 6.06% | |||
These returns are not guaranteed and depend on future investment performance. Even at 8% growth, the IRR is barely above debt instruments and falls short of providing inflation-beating returns.
The main drawback is that the vesting corpus must be used to purchase an annuity at prevailing market rates, which are uncertain.
The brochure’s annuity illustrations (₹1.26 lakhs per year at 4% and ₹2.70 lakhs per year at 8%) are indicative only and not guaranteed. Actual income will depend on both the final fund value and future annuity rates.
Since the annuity rates are unpredictable and the fund utilisation is restricted, the Ageas Federal Golden Years Pension Plan may not be an attractive investment option for long-term wealth creation or retirement planning.
The Ageas Federal Golden Years Pension Plan comes with a major drawback—it restricts how you can utilise your accumulated retirement corpus.
To overcome this limitation, an alternative strategy that separates insurance and investment can provide far greater flexibility, liquidity, and returns. Let’s compare this approach using the same assumptions as before.
Instead of combining insurance with investment, opt for a pure-term life insurance policy with a sum assured of ₹10.50 lakhs. This costs about ₹10,300 annually for a 25-year term with a 10-year premium payment period.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,50,000 |
| Policy Term | 25 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 10,300 |
| Investment | ₹ 89,700 |
After paying the term insurance premium, the remaining ₹89,700 can be invested each year. Depending on risk appetite:
Risk-averse investors can choose a PPF account (debt).
Aggressive investors can go for Equity mutual funds.
| Term Insurance + PPF | Term insurance + Equity Mutual Fund | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 35 | 1 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 36 | 2 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 37 | 3 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 38 | 4 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 39 | 5 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 40 | 6 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 41 | 7 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 42 | 8 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 43 | 9 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 44 | 10 | -97,500 | 10,50,000 | -1,00,000 | 10,50,000 |
| 45 | 11 | -500 | 10,50,000 | 0 | 10,50,000 |
| 46 | 12 | -500 | 10,50,000 | 0 | 10,50,000 |
| 47 | 13 | -500 | 10,50,000 | 0 | 10,50,000 |
| 48 | 14 | -500 | 10,50,000 | 0 | 10,50,000 |
| 49 | 15 | -500 | 10,50,000 | 0 | 10,50,000 |
| 50 | 16 | 0 | 10,50,000 | 0 | 10,50,000 |
| 51 | 17 | 0 | 10,50,000 | 0 | 10,50,000 |
| 52 | 18 | 0 | 10,50,000 | 0 | 10,50,000 |
| 53 | 19 | 0 | 10,50,000 | 0 | 10,50,000 |
| 54 | 20 | 0 | 10,50,000 | 0 | 10,50,000 |
| 55 | 21 | 0 | 10,50,000 | 0 | 10,50,000 |
| 56 | 22 | 0 | 10,50,000 | 0 | 10,50,000 |
| 57 | 23 | 0 | 10,50,000 | 0 | 10,50,000 |
| 58 | 24 | 0 | 10,50,000 | 0 | 10,50,000 |
| 59 | 25 | 0 | 10,50,000 | 0 | 10,50,000 |
| 60 | 37,30,039 | 85,71,487 | |||
| IRR | 6.55% | 10.82% | |||
PPF (Debt option): Maturity value = ₹37.30 lakhs, IRR = 6.55%. Only slightly higher than the pension plan corpus, but with the huge benefit of full liquidity—you can use the entire maturity amount as you wish.
Equity Mutual Funds (Equity option): Pre-tax corpus = ₹96.49 lakhs. After capital gains tax, post-tax value = ₹85.71 lakhs, IRR = 10.82%. This is far superior to the pension plan’s returns and provides complete flexibility over fund usage.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 25 years | 96,49,985 |
| Purchase price | 8,97,000 |
| Long-Term Capital Gains | 87,52,985 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 86,27,985 |
| Tax paid on LTCG | 10,78,498 |
| Maturity value after tax | 85,71,487 |
This alternative strategy not only delivers much higher returns but also offers total control over your money.
Unlike the Ageas Federal Golden Years Pension Plan—which locks you into purchasing an annuity—the combination of term insurance + tailored investments ensures better retirement wealth creation and financial independence.
The Ageas Federal Golden Years Pension Plan positions itself as a retirement-focused market-linked product, offering two plan variants:
The waiver option only adds value in terms of plan continuance; otherwise, both variants share the same drawback—you cannot utilise the accumulated corpus freely and it also has a high agent commission.
Another limitation is that the plan concentrates solely on the accumulation phase. The annuity amount is not guaranteed within the Ageas Federal Golden Years Pension Plan policy.
Although the brochure shows indicative annuity figures, the actual benefit at vesting must be used—fully or partially—to purchase an annuity at prevailing market rates, which remain uncertain.
Being a market-linked product, the plan exposes you to higher risk, yet the returns do not justify the risk undertaken.
Add to this the substantial charges and restrictions on fund utilisation, and the Ageas Federal Golden Years Pension Plan becomes a less appealing choice for retirement wealth creation.
A more effective approach is to start early in your career, allowing the power of compounding to work in your favour.
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