Ageas Federal Young Star Plus Plan : Good or Bad? An Insightful Review
Is the Ageas Federal Young Star Plus Plan the perfect way to secure your child’s future, or just another traditional savings plan in disguise?
Can the Ageas Federal Young Star Plus Plan truly guarantee your child’s dreams, or are there smarter options you should explore?
Could the Ageas Federal Young Star Plus Plan be the key to stress-free parenting, or a risky commitment with limited returns?
In this article, we explore the importance of effective planning for children’s life goals and take a closer look at the features, benefits, and limitations of the Ageas Federal Young Star Plus Plan.
What is the Ageas Federal Young Star Plus?
What are the features of the Ageas Federal Young Star Plus?
Who is eligible for the Ageas Federal Young Star Plus?
What are the benefits of the Ageas Federal Young Star Plus?
Grace Period, Discontinuance and Revival of the Ageas Federal Young Star Plus
Free Look Period for the Ageas Federal Young Star Plus
Surrendering the Ageas Federal Young Star Plus
What are the advantages of the Ageas Federal Young Star Plus?
What are the disadvantages of the Ageas Federal Young Star Plus?
Research Methodology of Ageas Federal Young Star Plus
Benefit Illustration – IRR Analysis of Ageas Federal Young Star Plus
Ageas Federal Young Star Plus Vs. Other Investments
Ageas Federal Young Star Plus Vs. Pure-term + Equity Mutual Fund
Final Verdict on Ageas Federal Young Star Plus
Ageas Federal Young Star Plus is a Non-Linked, Participating, Individual Life, Savings Insurance Plan. It provides guaranteed payouts in a chosen timeframe to help you fund the crucial milestones of your child’s life.
It also ensures that your loved one’s dreams stay financially safe even in the case of your unfortunate absence.
| Parameter | Minimum | Maximum |
| Age at Entry | 18 years | Regular payment option: 40 years |
| Maturity Age | 30 years | Regular payment option: 60 years |
| Premium Paying Term / Policy Term | Premium Paying Term (years) | Policy Term (years) |
| 7 | 12 | |
| 10 | 12 | |
| 12 | 15 | |
| 15 | 15 | |
| 15 | 20 | |
| 20 | 20 | |
| Premium Paying Frequency | Yearly, Half Yearly and Monthly | |
| Premium | Rs 18,000 p.a. (For Yearly frequency) | No limit (subject to Board-approved Underwriting Policy) |
Maturity benefit is equal to Vested Guaranteed Additions + Last Guaranteed Annual Payout + Vested Simple Reversionary Bonuses, if any + Interim Bonus, if any + Terminal Bonus, if any.
Guaranteed Additions as described in the table below are accrued to your policy from the 5th policy year and every 5 years thereafter, provided all due annualised premiums are paid or waived to date. Accrued Guaranteed Additions are payable at the time of Maturity.
| Policy Term | Accrual of Guaranteed Additions during the policy year | Guaranteed Addition (as a fixed percentage of Maturity Sum Assured) |
| 12 | 5th & 10th | 5.00% |
| 15 | 5th, 10th & 15th | 7.50% |
| 20 | 5th, 10th, 15th & 20th | 10.00% |
The plan pays Guaranteed Annual Payouts totalling 125% of the Maturity Sum Assured, in the last 3 or last 5 years of your policy, depending on the Ageas Federal Young Star Plus Plan policy term that you choose at inception, provided all due premiums have been paid or waived to date.
Schedule for Guaranteed Annual Payouts for the policy term of 12 years:
| Guaranteed annual payout | Due dates | % of Maturity sum assured |
| 1st | 2 years before the maturity date | 25% |
| 2nd | 1 year before the maturity date | 25% |
| Last Payout | Paid on maturity date | 75% |
Schedule for Guaranteed Annual Payouts for the policy term of 10 and 15 years:
| Guaranteed annual payout | Due dates | % of Maturity sum assured |
| 1st | 4 years before the maturity date | 25% |
| 2nd | 3 years before the maturity date | 25% |
| 3rd | 2 years before the maturity date | 25% |
| 4th | 1 year before the maturity date | 25% |
| Last Payout | Paid on maturity date | 25% |
You can choose your maturity sum assured based on the amount of Guaranteed Annual Payouts you wish to receive. Maturity Sum assured is the sum assured that is used to determine your premium and maturity benefit.
In the unfortunate event of your death during the term of the Ageas Federal Young Star Plus Plan policy, provided the policy is in force, the Death Benefit, as explained below, will be applicable. Additionally, no future premiums are payable.
Death Benefit shall be:
Where,
Death Sum Assured is the highest of:
Simple Reversionary Bonus, if any, shall be expressed as a percentage of Maturity Sum Assured and vested into the Ageas Federal Young Star Plus Plan policy every year from the 1st policy anniversary till the end of Policy Term.
Interim Bonus, if any, is declared as a percentage of Maturity Sum Assured and is payable on Maturity between two Bonus declaration dates.
Terminal Bonus, if any, shall be expressed as a percentage of Maturity Sum Assured and is payable on maturity of the Ageas Federal Young Star Plus Plan policy.
Grace Period
You get a grace period of 30 days for Yearly and Half-Yearly mode and 15 days for Monthly mode, due from the date of the first unpaid premium.
Discontinuance
Lapse: During the first full policy year, if the premium due is not paid within the Grace Period, the policy will lapse. No benefits will be payable where the Ageas Federal Young Star Plus Plan policy has lapsed.
Reduced paid-up: After payment of the first full policy year’s premium, if the premium due is not paid before the end of the Grace Period, your policy shall acquire a paid-up value with reduced benefits.
Revival
A policy which has lapsed or has been made paid-up may be revived for full benefits within 5 consecutive years from the date of the first unpaid premium.
In case you do not agree with any of the Ageas Federal Young Star Plus Plan policy terms and conditions, or otherwise and have not made any claim, you have the option to return the policy within 30 days beginning from the date of receipt of the policy document (whether received electronically or otherwise).
The policy shall acquire a Surrender value after completion of the first policy year, provided one full year’s premium has been received. Surrender Value = Maximum [(Guaranteed Surrender Value (GSV), Special Surrender Value (SSV)].
Let us now review the cash flow pattern and evaluate the potential returns using the figures provided in the Ageas Federal Young Star Plus Plan policy brochure. The illustration below highlights how the plan functions, enabling you to make an informed choice.
A 30-year-old male has taken the Ageas Federal Young Star Plus Plan. He opted for a policy term of 20 years with a premium paying term of 15 years, with an annual premium of ₹54,649. The sum assured is ₹ 5 Lakhs, and the death benefit is ₹ 5.46 Lakhs
| Male | 30 years |
| Sum Assured | ₹ 5,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 54,649 |
The plan offers 5 instalments, beginning at the end of the 16th year. Each instalment equals 25% of the Maturity Sum Assured.
The final instalment also includes guaranteed additions and bonuses. The illustration assumes investment returns of 8% p.a. and 4% p.a. (for demonstration purposes only; actual returns are not guaranteed).
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 30 | 1 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 31 | 2 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 32 | 3 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 33 | 4 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 34 | 5 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 35 | 6 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 36 | 7 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 37 | 8 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 38 | 9 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 39 | 10 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 40 | 11 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 41 | 12 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 42 | 13 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 43 | 14 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 44 | 15 | -54,649 | 5,46,490 | -54,649 | 5,46,490 |
| 45 | 16 | 0 | 5,46,490 | 0 | 5,46,490 |
| 46 | 17 | 1,25,000 | 5,46,490 | 1,25,000 | 5,46,490 |
| 47 | 18 | 1,25,000 | 5,46,490 | 1,25,000 | 5,46,490 |
| 48 | 19 | 1,25,000 | 5,46,490 | 1,25,000 | 5,46,490 |
| 49 | 20 | 1,25,000 | 5,46,490 | 1,25,000 | 5,46,490 |
| 50 | 5,47,950 | 5,46,490 | 11,06,850 | 5,46,490 | |
| IRR | 2.07% | 5.46% | |||
At 4% scenario, the Internal Rate of Return (IRR) works out to 2.07% as per the Ageas Federal Young Star Plus Plan maturity calculator.
At 8% scenario, the IRR stands at 5.46% as per the Ageas Federal Young Star Plus Plan maturity calculator.
The relatively low returns stem from the periodic payouts, which interrupt the power of compounding. For investors aiming to build a sufficient corpus for their child’s education, these returns may fall short of the actual requirement.
Hence, the Ageas Federal Young Star Plus Plan may not be the most effective option to fully cover future expenses.
To generate better returns, it is advisable to separate investment and insurance. In the earlier illustration, while the sum assured was ₹5 lakhs, the death benefit payable was ₹5.46 lakhs. For a fair comparison, let’s consider a pure term life insurance policy with a sum assured of ₹5.5 lakhs.
A pure term life insurance policy with a sum assured of ₹5.5 lakhs costs an annual premium of ₹4,800, with a premium paying term of 10 years and a policy term of 20 years.
This leaves you with ₹49,849 annually to invest towards your child’s future. Additionally, since the Ageas Federal Young Star Plus Plan had a 15-year premium-paying term, you can invest the entire amount for the remaining 5 years.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 5,50,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 4,800 |
| Investment | ₹ 49,849 |
| Term insurance + Equity Mutual Fund | |||
| Age | Year | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 30 | 1 | -54,649 | 5,50,000 |
| 31 | 2 | -54,649 | 5,50,000 |
| 32 | 3 | -54,649 | 5,50,000 |
| 33 | 4 | -54,649 | 5,50,000 |
| 34 | 5 | -54,649 | 5,50,000 |
| 35 | 6 | -54,649 | 5,50,000 |
| 36 | 7 | -54,649 | 5,50,000 |
| 37 | 8 | -54,649 | 5,50,000 |
| 38 | 9 | -54,649 | 5,50,000 |
| 39 | 10 | -54,649 | 5,50,000 |
| 40 | 11 | -54,649 | 5,50,000 |
| 41 | 12 | -54,649 | 5,50,000 |
| 42 | 13 | -54,649 | 5,50,000 |
| 43 | 14 | -54,649 | 5,50,000 |
| 44 | 15 | -54,649 | 5,50,000 |
| 45 | 16 | 0 | 5,50,000 |
| 46 | 17 | 1,25,000 | 5,50,000 |
| 47 | 18 | 1,25,000 | 5,50,000 |
| 48 | 19 | 1,25,000 | 5,50,000 |
| 49 | 20 | 1,25,000 | 5,50,000 |
| 50 | 21,59,598 | 5,50,000 | |
| IRR | 9.26% | ||
We allocate the investible surplus into an equity mutual fund for corpus accumulation. The final Fund Value (15 years) is ₹21.15 lakhs, and the post-tax Maturity Value is ₹19.63 lakhs
At maturity, this corpus is deployed into an instrument generating a 7% return, from which annual withdrawals are made to mirror the cash instalments of the Ageas Federal Young Star Plus Plan. IRR of the combined pure term + equity mutual fund strategy: 9.26%.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 15 years | 21,15,512 |
| Purchase price | 7,71,735 |
| Long-Term Capital Gains | 13,43,777 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 12,18,777 |
| Tax paid on LTCG | 1,52,347 |
| Maturity value after tax | 19,63,165 |
The standout benefit of this strategy is liquidity. While we assumed instalments similar to the Ageas Federal Young Star Plus Plan policy for comparison, you are not locked into fixed payouts. You retain the flexibility to withdraw as per your actual requirement—a feature that is missing in the Ageas Federal Young Star Plus Plan.
The Ageas Federal Young Star Plus Plan is a traditional money-back policy that provides life coverage along with periodic cash payouts, irrespective of the Ageas Federal Young Star Plus Plan policyholder’s survival.
Its key highlight is the premium waiver and policy continuance benefit in case of the policyholder’s death.
However, when it comes to funding your child’s education, the plan falls short. With education costs rising at an inflation rate of 10%–12%, the relatively low returns and restricted liquidity of this policy make it an inefficient choice and it also has a high agent commission.
Such limitations can disrupt your cash flow and leave you unprepared for actual expenses.
For crucial life goals like your child’s education, it is essential to invest smartly. Starting early allows you to build the required corpus and keep pace with inflation. Don’t let inadequate investment products like the Young Star Plus Plan derail your child’s aspirations.
Instead, create a strong safety net with a pure-term life insurance policy that provides adequate coverage for your family in case of uncertainties.
Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?
For a comprehensive strategy tailored to your needs, consult a Certified Financial Planner (CFP). Proper planning and timely action ensure you stay on track to meet your financial goals and secure your child’s future.
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