Axis Max Life Forever Young Pension Plan
Can the Axis Max Life Forever Young Pension Plan truly help you build a sufficient retirement corpus, or is it just another pension ULIP with limitations worth examining?
Does the Axis Max Life Forever Young Pension Plan offer the right balance between market-linked growth and retirement security, or are there better alternatives available?
Is the Axis Max Life Forever Young Pension Plan a smart way to prepare for retirement, or would a more flexible investment strategy serve you better?
This article explores the key features of Axis Max Life Forever Young Pension and examines how you can build the retirement corpus needed to maintain your lifestyle in the years ahead.
What is the Axis Max Life Forever Young Pension?
What are the features of the Axis Max Life Forever Young Pension?
Who is eligible for the Axis Max Life Forever Young Pension?
What are the benefits of the Axis Max Life Forever Young Pension?
What are the fund options of the Axis Max Life Forever Young Pension?
What are the charges of Axis Max Life Forever Young Pension?
Grace Period, Discontinuance and Revival of the Axis Max Life Forever Young Pension
Free Look Period for the Axis Max Life Forever Young Pension
Surrendering the Axis Max Life Forever Young Pension
What are the advantages of the Axis Max Life Forever Young Pension?
What are the disadvantages of the Axis Max Life Forever Young Pension?
Research Methodology of Axis Max Life Forever Young Pension
Benefit Illustration – IRR Analysis of Axis Max Life Forever Young Pension
Axis Max Life Forever Young Pension Vs. Other Investments
Axis Max Life Forever Young Pension Vs. Pure-term + PPF/Equity Mutual Fund
Final Verdict on Axis Max Life Forever Young Pension Plan
Axis Max Life Forever Young Pension is a Unit-Linked Non-Participating Individual Pension Plan.
It provides the benefits of equity participation to build a large retirement corpus, while also protecting your savings from market downturns. It also offers additional benefits to safeguard your family against unforeseen eventualities.
Base Policy: Higher of
The nominee shall have the option to utilise the death benefit in one of the following ways:
In case the proceeds of the policy are not sufficient to purchase minimum annuity as required by IRDAI from time to time, the proceeds of the policy may be paid as lump sum to the claimant.
On the Vesting Date, a benefit equal to the Fund Value will be paid to the Axis Max Life Forever Young Pension Plan policyholder.
On maturity, the policyholder shall be entitled to exercise one of the following options with regard to the maturity benefit:
0.50% of the Fund Value shall be added to the fund by creation of additional units, at the end of every policy year starting from the end of the 10th policy year.
The Guaranteed Loyalty Additions increase by 0.02% (absolute) each year from the 11th policy year.
The Axis Max Life Forever Young Pension Planoffers you the choice of any of the Eleven investment funds offered under the product. The details of the investment funds are as below
| S.no | Fund Name | Govt Securities | Corporate Bonds | Money Market & Cash Instruments | Equities | Risk |
| 1 | Axis Max Life UL Pension Growth Super Fund | 0-20% | 0-20% | 0-30% | 70-100% | High |
| 2 | Axis Max Life Pension Life Growth Fund | 0-30% | 0-30% | 0-40% | 20-70% | High |
| 3 | Axis Max Life High Growth Pension Fund | 0-30% | 0-30% | 0-30% | 70-100% | Very High |
| 4 | Axis Max Life Smart Innovation Pension Fund | 0-30% | 0-30% | 0-30% | 70-100% | Very High |
| 5 | Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund | 0 | 0 | 0-20% | 80-100% | Very High |
| 6 | Axis Max Life BSE 500 Value 50 Index Pension Fund | 0 | 0 | 0-20% | 80-100% | Very High |
| 7 | Axis Max Life Sustainable Wealth 50 Index Pension Fund | 0 | 0 | 0-20% | 80-100% | Very High |
| 8 | Axis Max Life NIFTY 500 Multifactor 50 Index Pension Fund | 0 | 0 | 0-20% | 80-100% | Very High |
| 9 | Axis Max Life Pension Life Balanced Fund | 20-50% | 20-40% | 0-40% | 10-40% | Moderate |
| 10 | Axis Max Life Pension Life Conservative Fund | 50-80% | 0-50% | 0-40% | 0-15% | Low |
| 11 | Axis Max Life Pension Life Secured Fund | 50-100% | 0-50% | 0-40% | Nil | Low |
A. Premium Allocation Charge (as a % of Annual Premium or Single Premium)
Single Pay (as a % of Single Premium) – 0%
Regular Pay and Limited Pay (as a % of Annual Premium)
Channels other than online Annual premium payment mode: 12% of each modal premium in the first policy year, 4% of each modal premium in the 2nd policy year onwards. Non-Annual premium payment mode: 9% of each modal premium in the first policy year, 3% of each modal premium in the 2nd policy year onwards
Online channel Annual premium payment mode: 0.75% of each modal premium; non-annual premium payment mode: 0% of each modal premium
Allocation Charge on Top-up Premium: 1% of Top Up Premium
B. Fund Management Charge
| Fund Name | Fund Management Charge (p.a.) |
| Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund | 1.35% |
| Axis Max Life BSE 500 Value 50 Index Pension Fund | 1.35% |
| Axis Max Life Sustainable Wealth 50 Index Pension Fund | 1.35% |
| Axis Max Life High Growth Pension Fund | 1.35% |
| Axis Max Life Smart Innovation Pension Fund | 1.35% |
| Axis Max Life NIFTY 500 Multifactor 50 Index Pension Fund | 1.35% |
| Axis Max Life UL Pension Growth Super Fund | 1.25% |
| Axis Max Life Pension Life Growth Fund | 1.25% |
| Axis Max Life Pension Life Balanced Fund | 1.10% |
| Axis Max Life Pension Life Conservative Fund | 0.90% |
| Axis Max Life Pension Life Secured Fund | 0.90% |
C. Policy Administration Charge
Single Pay: 0.08% of the Single Premium per month increasing @ 4% p.a. starting year.The charge will not exceed Rs. 400 p.m. in any year.
Regular Pay/ Limited Pay
Non-ISNP o During policy years 1 to 5: 0.1% of Annual Premium per month o During policy years 6 to 10: 0.45% of Annual Premium per month o During policy years 11-15: 0.2% of Annual Premium per month o Policy year 16+: 0.5% of Annual Premium per month The charge is capped at Rs 500 per month.
ISNP 1% of Annual Premium per month.
D. Mortality Charge
Mortality charge is levied for providing risk cover to the life insured during the Axis Max Life Forever Young Pension Plan policy term.
This charge is levied on the attained age for the Sum at Risk, which is equal to an amount equal to 105% of the Total Premiums Paid, excluding rider charges, if any, less prevailing Fund Value.
E. Switching Charges
The Axis Max Life Forever Young Pension Plan Policyholder can switch from one fund to another, subject to a minimum switch amount of Rs. 500.
There is no limit on the number of switches done in a policy year, i.e. the Policyholder may switch any number of times without any charges being levied.
F. Redirection Charge
The Policyholder can redirect the premium between available funds at any time. Partial Withdrawal shall be allowed only three times during the entire term of the policy.
G. Partial Withdrawal Charge
Partial Withdrawal shall be allowed only three times during the entire term of the policy.
H. Discontinuance/ Surrender Charge
It is levied on the Fund Value/Annualized premium/ Single premium on account of surrender/discontinuance of the policy. It depends on the year of discontinuance, premium and policy term.
I. Miscellaneous Charge
The charge will be deducted for any alterations made to the policy such as change in vesting age. A fee of ₹ 250 per transaction will be applicable.
Inference from Charges: These charges act as additional costs for investors. Since some charges continue throughout the Axis Max Life Forever Young Pension Plan policy term, they gradually erode returns over time, reducing overall profitability.
Grace Period
In case the premium is not paid by the premium due date, a grace period of 30 days (Fifteen days in case of monthly mode) from the due date of the first unpaid premium will be allowed.
Discontinuance
Discontinuance of Premium within first five policy years (i.e. before the expiry of the lock-in period): the Company will credit the Fund Value, by creation of units, into the Discontinued Policy Fund after deducting applicable Discontinuance Charges. The risk cover under the policy or any attached rider will stop, and no further charges will be levied by the Company other than the Fund Management Charge applicable on the Discontinuance Policy Fund, i.e., 0.5% p.a. currently. The proceeds of the Discontinuance Policy Fund will be paid to the policyholder at the end of the revival period or lock-in period, whichever is later.
Discontinuance of Premium after first five policy years (i.e. after the expiry of the lock-in period): the policy shall be converted into a reduced paid-up policy. The policy shall continue to be in reduced paid-up status without rider cover, if any. All applicable charges as per the terms and conditions of the policy (i.e. Policy Administration Charge, Mortality Charge and Fund Management Charge) may be deducted during the revival period. However, the mortality charges shall be deducted based on the reduced paid-up sum assured only. At the end of the revival period, the proceeds of the policy fund shall be paid to the policyholder and the policy shall terminate.
Revival
Option to revive the policy within the revival period of three years from the date of first unpaid premium.
“Free Look” means a period of thirty (30) days beginning from the date of receipt of the policy document to review the terms and conditions of the policy.
If the Axis Max Life Forever Young Pension Plan policyholder disagrees with any of the policy terms or conditions or otherwise and has not made any claim, the policyholder shall have the option to return the policy.
Surrender within five years of the inception of the policy
In case you surrender the policy within the lock-in period of five years, the Company shall close the Unit Account and credit the Fund Value to the Pension Discontinuance Policy Fund after deducting the applicable Surrender Charges.
The proceeds of the Pension Discontinuance Policy Fund can be utilised by you at the end of the lock-in period, in the ways mentioned below.
Surrender after five years of the inception of the policy
In case of surrender after the lock-in period, the surrender value can be utilized by you by exercising one of the following options.
Utilisation of Surrender benefit
The Axis Max Life Forever Young Pension Plan is designed to build a retirement corpus through market-linked investments.
However, the accumulated corpus cannot be freely utilised at vesting, as it is subject to annuity purchase requirements. While the plan aims to provide retirement income, this restriction significantly limits flexibility.
Let’s understand how the plan works by analysing the figures provided in the policy brochure.
A 40-year-old male invests ₹50,000 annually for 20 years, with the policy benefits vesting at the end of the term.
At vesting, the accumulated corpus must be partially or fully used to purchase an annuity.
| Male | 40 years |
| Sum Assured | ₹ 10,50,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 50,000 |
The policy illustrates two assumed investment scenarios—4% p.a. and 8% p.a. These are only illustrative and are not guaranteed, as actual returns depend on market performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 41 | 2 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 42 | 3 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 43 | 4 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 44 | 5 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 45 | 6 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 46 | 7 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 47 | 8 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 48 | 9 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 49 | 10 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 50 | 11 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 51 | 12 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 52 | 13 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 53 | 14 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 54 | 15 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 55 | 16 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 56 | 17 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 57 | 18 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 58 | 19 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 59 | 20 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 60 | 12,84,384 | 20,27,149 | |||
| IRR | 2.33% | 6.33% | |||
However, these IRRs do not represent the actual retirement income you may receive, since the corpus must subsequently be converted into an annuity, whose rates and payouts will depend on prevailing annuity rates.
Key Drawbacks
Overall, the Axis Max Life Forever Young Pension Plan offers a market-linked approach to retirement savings, but the restrictions on corpus utilisation and relatively modest illustrated returns make it a less flexible option for building and managing a retirement corpus.
The Axis Max Life Forever Young Pension Plan places restrictions on how the accumulated retirement corpus can be utilised.
A more flexible approach is to separate insurance from investment—using term insurance for protection and investing the balance in suitable asset classes.
Let’s compare this approach using the same parameters as the previous example.
A ₹10.5 lakh pure-term life insurance cover, aligned with the death benefit structure of the Axis Max Life Forever Young Pension Plan, costs approximately ₹6,250 annually for a 20-year policy term. This leaves ₹43,750 per year for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,50,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 6,250 |
| Investment | ₹ 43,750 |
The balance can be invested based on the investor’s risk profile. For illustration, let’s compare PPF as a debt option and an Equity Mutual Fund as an equity option.
| Term Insurance + PPF | Term insurance + Equity Mutual Fund | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 40 | 1 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 41 | 2 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 42 | 3 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 43 | 4 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 44 | 5 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 45 | 6 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 46 | 7 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 47 | 8 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 48 | 9 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 49 | 10 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 50 | 11 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 51 | 12 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 52 | 13 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 53 | 14 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 54 | 15 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 55 | 16 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 56 | 17 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 57 | 18 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 58 | 19 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 59 | 20 | -50,000 | 10,50,000 | -50,000 | 10,50,000 |
| 60 | 19,42,001 | 32,14,248 | |||
| IRR | 5.97% | 10.16% | |||
PPF (Public Provident Fund)
After 20 years, the PPF investment grows to approximately ₹19.42 lakh, generating an IRR of 5.97%.
While the corpus is comparable to the amount illustrated under the 8% scenario of the Axis Max Life Forever Young Pension Plan, PPF provides greater flexibility at maturity, as the accumulated corpus is not subject to the same annuity-purchase restriction.
Equity Mutual Fund
Assuming the investment earns the illustrated return, the corpus grows to approximately ₹35.30 lakh before tax after 20 years.
After accounting for capital gains tax, the final corpus is approximately ₹32.14 lakh, resulting in a post-tax IRR of 10.16%.
This is significantly higher than the returns illustrated under the Axis Max Life Forever Young Pension Plan.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 20 years | 35,30,570 |
| Purchase price | 8,75,000 |
| Long-Term Capital Gains | 26,55,570 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 25,30,570 |
| Tax paid on LTCG | 3,16,321 |
| Maturity value after tax | 32,14,248 |
Key Advantages of the Alternative Strategy
By separating insurance and investment, you can obtain the required life cover through term insurance while investing the remaining amount in appropriate asset classes.
This approach can potentially deliver higher returns while providing significantly greater flexibility in managing your retirement corpus.
In comparison, the Axis Max Life Forever Young Pension Plan combines insurance and market-linked investment but places restrictions on the utilisation of the accumulated corpus.
For investors who prioritise flexibility, investment control and long-term wealth creation, a term insurance plus investment strategy may be a more efficient approach to retirement planning.
The Axis Max Life Forever Young Pension Plan combines savings, market-linked investments and life insurance, with a primary focus on building a retirement corpus.
Unlike traditional endowment plans that combine insurance with maturity benefits, this plan is structured mainly around retirement accumulation.
Since the returns are linked to market performance, the plan carries investment risk. The impact of various charges, along with restrictions on accessing the accumulated funds, further limits its flexibility as a retirement planning solution.
The vesting benefit represents the corpus accumulated during the policy term and is intended to provide for post-retirement income.
However, the plan itself does not provide a regular income stream or an annuity and it also has a high agent commission.
At vesting, the accumulated corpus, either fully or partially as applicable, must be used to purchase an annuity at the prevailing rates.
Consequently, the eventual annuity income is not known or guaranteed today.
Retirement planning should be aligned with your income, expenses, financial goals, risk appetite and desired retirement lifestyle.
Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?
A personalised retirement strategy can provide greater flexibility and help ensure that your accumulated wealth is used efficiently. Consulting a Certified Financial Planner can help you structure a retirement plan suited to your specific needs.
Listen to this article Somebody you have never met just messaged you on Telegram or…
Listen to this article If you've ever glanced at your payslip and wondered where that…
Listen to this article Can the Axis Max Life Smart Wealth Annuity Guaranteed Pension Plan…
Listen to this article Does a financially secure retirement require a reliable and regular stream…
Listen to this article Is the LIC Jan Suraksha Plan genuinely a valuable financial safety…
Listen to this article Can the LIC Protection Plus Plan truly combine meaningful life protection…