Do you have life goals?
Do you plan & work towards reaching them?
Bajaj Allianz life claims that it has a very promising scheme to support your financial goals. Let us look at the various options for Bajaj Allianz Life Assured Wealth Goal.
Table of Contents
1.) An overview of Bajaj Allianz Life Assured Wealth Goal
2.) Features of Bajaj Allianz Life Assured Wealth Goal
3.) Eligibility criteria of Bajaj Allianz Life Assured Wealth Goal
4.) Benefits under 5 Variants of Bajaj Allianz Life Assured Wealth Goal
5.) Additional benefits of Bajaj Allianz Life Assured Wealth Goal
6.) How to Cancel/Surrender Bajaj Allianz Life Assured Wealth Goal?
8.) Advantages of Bajaj Allianz Life Assured Wealth Goal
7.) Disadvantages of Bajaj Allianz Life Assured Wealth Goal
9.) Research Methodology on Bajaj Allianz Life Assured Wealth Goal
10.) Benefit Illustration analysis on Bajaj Allianz Life Assured Wealth Goal
11.) Final Verdict on Bajaj Allianz Life Assured Wealth Goal
An overview of Bajaj Allianz Life Assured Wealth Goal:
Bajaj Allianz Life Assured Wealth Goal is a non-linked, individual life insurance, savings plan. It assures you of income in achieving your Life Goals with a guarantee. You can select from any of the five variants. All the variants ensure the regular guaranteed payouts as a percentage of Annualized Premium.
Features of Bajaj Allianz Life Assured Wealth Goal:
- Five variants – Lifelong income, Second Income, Step up income, Extra income, and Wealth creation.
- Premium paying terms can be chosen as per convenience – Single, Regular or Limited.
- The sum of all premiums paid will be returned at the end of the Income Period.
- A deferment period can be chosen out of the given option.
- The income period depends on the chosen variant among the five.
- Life cover throughout the policy term.
Eligibility criteria of Bajaj Allianz Life Assured Wealth Goal:
| Plan Variants | Premium Payment Term (PPT) (in years) | Policy Term (PT) (in years) | Income Period (in years) |
| Lifelong Income | 7/ 8 / 10 / 12 | 99 minus Age at-Entry | PT minus PPT minus Deferment Period |
| Second Income | 5 | 30 to 44 | 25/ 30 |
| 7 / 8 / 10 / 12 | |||
| Step Up Income | 5 | 25 to 32 | 20 |
| 7 / 8 / 10 / 12 | |||
| Extra Income | 5 / 7 | 15 to 29 | 10 / 15 |
| 8 / 10 / 12 | |||
| Wealth Creation | Single Pay (Joint Life) | 5 / 10 years | Not applicable |
| 5 / 8 / 10 / 12 | 10 /15 / 20 /25/ 30 |
| Plan Variants | Age at Entry (years) | Age at Maturity (years) | Min/ Max. Premium (Rs.) |
| Lifelong Income | 51 to 65 | 99 | 50,000 to no limit |
| Second Income | 5 to 50 | 35 to 99 | 30,000 to no limit |
| 5 to 60 | |||
| Step Up Income | 5 to 50 | 30 to 92 | 30,000 to no limit |
| 5 to 60 | |||
| Extra Income | 5 to 50 | 20 to 89 | 5,000 to no limit |
| 5 to 60 | |||
| Wealth Creation | Primary life 18 to 50 Secondary life 8 to 50 | 18 to 60 | 12,000 to no limit |
| 0 to 65 | 18 to 75 |
Benefits under 5 Variants of Bajaj Allianz Life Assured Wealth Goal:
Option1: Lifelong Income
Death benefit:
On Death of the life assured during the policy term, the benefit shall be payable to the nominee in equated monthly instalments for 5 years. The nominee has an option to receive the future instalments as a Lumpsum as well.
The Death benefit in the Lifelong Income variant will be higher of –
- Sum Assured on Death, or
- 105% of Total Premiums paid as of the date of death, or
- The prevailing surrender value.
Maturity benefit:
Sum of all premiums paid + Last regular guaranteed pay-out
Income benefit:
Receive regular guaranteed pay-outs as a percentage of Annualized Premium starting after the end of chosen deferment period till the age of 99 years.
Option 2: Second Income
Death benefit:
On Death of the life assured during the policy term, the benefit shall be payable to the nominee in equated monthly instalments for 5 years. The nominee has an option to receive the future instalments as a Lumpsum as well.
The Death benefit in the Second Income variant will be higher of –
- Sum Assured on Death, or
- 105% of Total Premiums paid as of the date of death, or
- The prevailing surrender value.
Maturity benefit:
Sum of all premiums paid (if opted) + Last regular guaranteed pay-out
Income benefit:
Receive regular guaranteed pay-outs as a percentage of Annualized Premium starting after the end of chosen deferment period till the life assured is alive or for chosen Income period (25/30 years) whichever is earlier.
Option 3: Step up Income
Death benefit:
On Death of the life assured during the policy term, the benefit shall be payable to the nominee in equated monthly instalments for 5 years. The nominee has an option to receive the future instalments as a Lumpsum as well.
The Death benefit in the Step up Income Variant will be higher of –
- Sum Assured on Death, or
- 105% of Total Premiums paid as of the date of death, or
- The prevailing surrender value.
Maturity benefit:
Sum of all premiums paid + Last regular guaranteed pay-out
Income benefit:
Receive regular pay-outs for 20 years or till the life assured is alive. Here the income payout starts after the premium paying term without any deferment period. Guaranteed payouts increase by @10% of 1st instalment of Regular guaranteed pay-out every five years during the Income Period.
Option 4: Extra Income
Death benefit:
On Death of the life assured during the policy term, the benefit shall be payable to the nominee in equated monthly instalments for 5 years. The nominee has an option to receive the future instalments as a Lumpsum as well.
The Death benefit in the Extra Income variant will be higher of –
- Sum Assured on Death, or
- 105% of Total Premiums paid as of the date of death, or
- The prevailing surrender value.
Maturity benefit:
Only the last regular guaranteed payout. Here the sum of all premiums is not returned.
Income benefit:
Receive regular guaranteed payouts as a percentage of Annualized Premium starting after the end of chosen deferment period till the life assured is alive or for chosen Income period (10/15 years) whichever is earlier.
Option 5: Wealth Creation
Death benefit:
For the Limited/ Regular Pay option
The Death benefit in the Wealth Creation Variant will be higher of
Sum Assured on Death, or
105% of Total Premiums paid as on date of death, or
The prevailing surrender value.
For Single Pay with Joint life options
On 1st Death during the Policy Term, 1.25 times of Single Premium will be payable to the nominee and the plan will continue.
On 2nd Death during the Policy term, the Death benefit will be higher of –
Sum Assured on Death, or
105% of Total Premiums paid as on date of death, or
The prevailing surrender value.
Maturity benefit:
Guaranteed Maturity Benefit (GMB) will be a percentage of Total Premiums paid. It is payable at the end of the chosen policy term. In the case of Joint life, the Guaranteed Maturity Benefit will be payable on at least one life surviving till maturity.
Income benefit:
There is no income benefit under the wealth creation option.
Additional benefits of Bajaj Allianz Life Assured Wealth Goal:
Option to take Death Benefit Instalments in Lumpsum (For variants 1- 4):
The default option is Death benefit in monthly equated instalments. At any time, the policyholder or nominee (as applicable) can change the option to take the outstanding death benefit instalments in a lump sum.
Option to take Death Benefit in Instalments (For variant 5):
At the time of intimation of death of the Life Assured (in a Single Life Policy or Joint Life Policy), the policyholder or the nominee, as applicable will have the option to take the Death Benefit in monthly or yearly instalments (along with appropriate rate) over a period of five (5) years from the date of intimation of death.
Option to avail of Maturity Benefit in Instalments (under Variant 5):
Option to take Maturity Benefit in monthly or yearly instalments over a period of 5 years; which can be chosen at any time before the maturity date.
Option to avail Income on date of your choice (under Variants 1 to 4):
Option to receive the regular guaranteed payouts at any special date of the year like a birthday, wedding anniversary or any other date of your choice. The regular guaranteed payouts will be payable on the policy anniversary if this option has not been opted for.
Option to take Death Benefit in annual instalments (under Variants 1 to 4):
The policyholder has an option to take the Death Benefit in yearly instalments. This option once opted cannot be changed subsequently.
Riders:
- Bajaj Allianz Accidental Death Benefit Rider
- Bajaj Allianz Accidental Permanent Total/Partial Disability Benefit Rider
- Bajaj Allianz Critical Illness Benefit Rider (UIN:116B035V02)
- Bajaj Allianz Family Income Benefit Rider (UIN:116B037V02)
- Bajaj Allianz Waiver of Premium Benefit Rider (UIN: 116B031V02)
Alteration of premium paying frequency & income pay-out frequency:
The policyholder will have the option to change the premium payment frequency or Income/ Guaranteed Maturity Benefit (GMB) frequency at any policy anniversary.
| Premium frequency | Wealth Creation variant | Pay-out frequency | |||
| Yearly | Half-yearly | Quarterly | Monthly | ||
| Single/ Yearly | 1 | 1 | 0.491 | 0.243 | 0.0805 |
| Half-yearly | 0.982 | 0.982 | 0.481 | 0.238 | 0.0785 |
| Quarterly | 0.972 | 0.972 | 0.474 | 0.234 | 0.0775 |
| Monthly | 0.966 | 0.966 | 0.471 | 0.233 | 0.0765 |
Policy Loan:
Provided the policy has acquired surrender value, during the policy term, the policyholder will have the option to take a policy loan, subject to a maximum limit of 80% of the surrender value available under the policy.
The Grace period, Revival, Paid-up
Grace period:
The Grace Period is thirty (30) days for frequencies other than monthly and fifteen (15) days for monthly frequency during which the Policy is considered to be in force with the risk cover.
Revival:
The policyholder can revive their lapsed or paid-up policy that is subjected to a few conditions
Paid-up:
If the first 2 years’ premium is unpaid: Then, your policy will immediately and automatically lapse at the expiry of the grace period and no benefit will be payable under the policy.
How to Cancel/Surrender Bajaj Allianz Life Assured Wealth Goal?
Free look period:
If the policyholder disagrees with any of the terms & conditions, he/she will have an option to return the policy within 15 days of the receipt of this policy and 30 days in case of electronic policy and policy obtained through distance mode.
Surrender:
The policy can be surrendered at any time during the policy term under a single premium policy or provided at least the first two (2) full Policy years’ regular premiums have been paid in a limited/regular premium policy.
The surrender value payable will be higher than the guaranteed surrender value (GSV) or the special surrender value (SSV).
GSV factors will be applied on Total Premiums received less the sum of all in-force or paid-up Income pay-outs paid (as applicable), to arrive at the GSV.
Advantages of Bajaj Allianz Life Assured Wealth Goal:
- Policy has a variety of options to choose from according to the requirement.
- The return on the premium is an added advantage.
- The wealth creation variant offers the compounding effect of the corpus.
- A joint life option is available under the Single pay option (variant 5).
- Life-long income variants can act as a secondary source of income during post-retirement.
- All future pay-outs (Income benefits) are guaranteed.
- Riders are available.
- The loan option helps to meet any emergency.
Disadvantages of Bajaj Allianz Life Assured Wealth Goal:
- The income benefit is constant throughout life except in the Step-up variant. It is not adjusted to inflation.
- The sum assured on death is not adequate.
- The lock-in period is 2 years.
Research Methodology on Bajaj Allianz Life Assured Wealth Goal:
Till now we have seen all the details on Bajaj Allianz Life Assured Wealth Goal Plan. But, it is not enough to decide whether we should buy this plan or not.
So, now we are going to do research and analyse the IRR of Bajaj Allianz Life Assured Wealth Goal Plan. In this way, we can see whether the Bajaj Allianz Life Assured Wealth Goal plan will benefit us or not.
In this research methodology, first, we are going to see the IRR of Bajaj Allianz Life Assured Wealth Goal by using the Bajaj Allianz Life Assured Wealth Goal Online Calculator.
Then we are going to use the same value to calculate the return on other investments.
Later, we are going to compare the IRR of Bajaj Allianz Life Assured Wealth Goal vs. other investments.
This method can give us a clear view to decide whether we should buy this plan or not.
Benefit Illustration analysis on Bajaj Allianz Life Assured Wealth Goal:
The benefit illustration under each variant is explained in the following table.
| Lifelong Income | Second Income | Step Up Income | Extra Income | Wealth Creation | |
| Age | 53 | 35 | 35 | 35 | 30 |
| Premium Payment Term (PPT) (in years) | 10 | 10 | 8 | 10 | 8 |
| Deferment period (in Years) | 2 | 2 | 0 | 2 | 0 |
| Income Period (in years) | 35 | 30 | 20 | 15 | 0 |
| Policy Term (PT) (in years) | 47 | 42 | 28 | 27 | 15 |
| Annualised premium (in Rs.) | 1,50,000 | 1,50,000 | 1,50,000 | 1,50,000 | 1,50,000 |
| Income benefit (in Rs.) | 1,51,125 | 1,74,000 | 90,0000 – 1,17,000 | 2,44,875 | 21,39,000 (lumpsum) |
| Return of Purchase Price | 15,00,000 | 15,00,000 | 12,00,000 | 0 | 0 |
| IRR | 5.95% | 6.96% | 6.18% | 6.52% | 5.18% |
On analysing each variant, it is evident that Income benefit would be the least in Life long income variant and also in the Step up variant.
If you receive the income benefit for a predefined period, then the income benefit amount would be higher. It would be even higher for 15 years (Extra income) when compared to the 30-year (second income) income benefit period.
Since the second Income variant has a limited income benefit period & also has an option for return of purchase price, the IRR works out to 6.96%. This rate is more or less equal to the bank FD rate.
On the whole, the return range would be between 5% and 7%. This is equivalent to any debt instrument return. This return is not sufficient to build the corpus for life goals. These are not inflation-beating ones.
Final Verdict on Bajaj Allianz Life Assured Wealth Goal:
In today’s uncertain world, it is imperative to have guaranteed return (fixed income) products in their portfolio.
Bajaj Allianz Life Assured Wealth Goal plan may look like it is suitable for investors who like to save systematically & invest towards their long-term goals. The step income option & return of purchase are added advantages to this plan.
But keeping in mind the inflation rate, the return on investment of this plan won’t be sufficient to meet the inflated cost of goals. The potential return of Bajaj Allianz Life Assure Wealth Goal Plan won’t beat inflation consistently over a long duration.
The rising inflation across the globe has reduced the purchasing power of money. To prevent the loss of your money, just saving is not enough. If you do not invest in the appropriate asset class, then you are essentially allowing inflation to take away your hard-earned money from you.
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