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Are you looking for life insurance that provides both guaranteed benefits and potential growth?
Does Bajaj Allianz Elite Assure Plan secure your family’s financial future while building wealth sound appealing?
Could the Bajaj Allianz Elite Assure Plan offer you life cover, maturity benefits, and additional rider options?
We will examine the features, advantages, disadvantages, and potential returns of the Bajaj Allianz Life Elite Assure plan using an IRR (Internal Rate of Return) analysis. This comprehensive review aims to provide a holistic perspective on savings and investments.
Table of Contents:
What is the Bajaj Allianz Life Elite Assure Plan?
What are the features of the Bajaj Allianz Life Elite Assure Plan?
Who is Eligible for the Bajaj Allianz Life Elite Assure Plan?
What are the Benefits of Bajaj Allianz Life Elite Assure Plan?
Grace Period, Discontinuance, and Revival of the Bajaj Allianz Life Elite Assure Plan
Free look period of the Bajaj Allianz Life Elite Assure Plan
Surrendering the Bajaj Allianz Life Elite Assure Plan
What are the advantages of the Bajaj Allianz Life Elite Assure Plan?
What are the disadvantages of the Bajaj Allianz Life Elite Assure Plan?
Research Methodology of Bajaj Allianz Life Elite Assure Plan
Benefit Illustration – IRR Analysis of Bajaj Allianz Life Elite Assure Plan
Bajaj Allianz Life Elite Assure Plan Vs. Other investment
Bajaj Allianz Life Elite Assure Plan Vs. Pure Term + PPF / ELSS
Final Verdict on Bajaj Allianz Life Elite Assure Plan
What is the Bajaj Allianz Life Elite Assure Plan?
Bajaj Allianz Elite Assure Plan is a Non-linked Participating Endowment Life Insurance Plan. The Bajaj Allianz Elite Assure Plan provides a life cover along with a return on investments.
While life cover ensures that your family members can pursue their life goals even in your absence, the returns ensure that your investments grow to achieve your goals.
What are the features of the Bajaj Allianz Life Elite Assure Plan?
- Accrued Guaranteed Loyalty Additions of up to 315% of Guaranteed Maturity Benefit
- Choice of 4 policy terms 15, 20, 25, and 30 years
- Option of regular and limited premium payment term
- Option to enhance your coverage with rider benefits
Who is Eligible for the Bajaj Allianz Life Elite Assure Plan?
| Parameter | Details |
| Minimum Entry Age | 0 years |
| Maximum Entry Age | 55 years |
| Minimum Age at Maturity | 18 years |
| Maximum Age at Maturity | 70 years |
| Policy Term | 15,20,25 and 30 years |
| Premium Paying Term | 5, 7, 10 & equal to Policy term |
| Premium | As per the chosen Guaranteed Maturity Benefit |
| Sum Assured | 10 times of annualised premium |
| Guaranteed Maturity Benefit | Minimum: 3 Lakhs, Maximum: No limit |
| Premium payment Frequency | Yearly, Half-yearly, Quarterly & Monthly |
What are the Benefits of Bajaj Allianz Life Elite Assure Plan?
i.) Maturity Benefit
The Maturity Benefit is Guaranteed Maturity Benefit (GMB) plus Guaranteed Loyalty Additions (GLA)plus Vested Bonus (if any) (VB) plus Interim Bonus (IB), if any, plus Terminal Bonus (TB), if any.
Guaranteed Loyalty Additions (GLA), as % of GMB, will be attached to the Bajaj Allianz Elite Assure Plan policy at the end of each policy year starting from the end of the 10th policy year
Vested Bonus (VB) as declared, will be attached every policy year starting from your first policy year
ii.) Death Benefit
If all due premiums are paid, then, in case of unfortunate death of the Life Assured during the Bajaj Allianz Elite Assure Plan policy term, the death benefit payable will be the Sum Assured on Death plus Guaranteed Loyalty Additions plus Vested Bonus (if any), plus Interim Bonus (if any), plus Terminal Bonus (if any), subject to Guaranteed Death Benefit of 105% of the total premiums paid till the date of death.
Sum Assured on Death is the higher of:
- Guaranteed Maturity Benefit
- Sum Assured
Grace Period, Discontinuance, and Revival of the Bajaj Allianz Life Elite Assure Plan
Grace Period
A grace period of 30 days for premium payment frequencies other than monthly and 15 days for monthly frequency will be allowed to pay the due premium.
Discontinuance
If you have not paid at least 1 year’s premium in full for a premium paying term less than 10 years or at least 2 years premium in full for a premium paying term of 10 years and above, then your Bajaj Allianz Elite Assure Plan policy will lapse at the expiry of the grace period and no benefit will be payable under the policy.
If you have paid at least 1 year’s premium in full for premium paying term less than 10 years or at least 2 years’ premium in full for premium paying term of 10 years and above, then your Bajaj Allianz Elite Assure Plan policy will be made Paid-up at the expiry of the grace period, and the Sum Assured on Death and the GMB under the policy will be reduced to the Paid-up Sum Assured on Death and Paid-up GMB, respectively.
The vested Bonuses (if any) as on the Paid-up date shall remain attached to the policy. A Paid-up policy will not accrue any further Bonus.
Revival
You may revive your paid-up/lapsed policy during the revival period of 5 years from the due date of the first unpaid premium.
Free look period of the Bajaj Allianz Life Elite Assure Plan
if you disagree with any of the terms & conditions, you will have the option to return the policy within 15 days of the receipt of this Bajaj Allianz Elite Assure Plan policy and 30 days in case of electronic policy and policy obtained through distance mode.
Surrendering the Bajaj Allianz Life Elite Assure Plan
You will have the option to surrender your Bajaj Allianz Elite Assure Plan policy anytime, provided at least 1 full year’s premium has been paid if the premium payment term is less than 10 years or at least 2 full years’ premiums have been paid if the premium payment term is 10 years or more
The surrender value shall be higher than:
- Guaranteed Surrender Value (GSV) or
- Special Surrender Value (SSV).
What are the advantages of the Bajaj Allianz Life Elite Assure Plan?
- The Bajaj Allianz Elite Assure Plan offers a Premium Rebate if your chosen GMB is greater than ₹ 5 Lakh
- You can avail loan under your policy, subject to a maximum of 90% of the surrender value.
- You can enjoy extra coverage by choosing the optional additional rider benefits.
- Option to alter your regular premium payment frequency to any other frequency
- At the inception of the policy, you can back-date your policy to a date of your choice
What are the disadvantages of the Bajaj Allianz Life Elite Assure Plan?
- The return on investment is poor.
- The bonuses are non-guaranteed amounts.
Research Methodology of Bajaj Allianz Life Elite Assure Plan
Next, we will calculate the potential returns of the Bajaj Allianz Life Elite Assure plan. The maturity benefit of this Bajaj Allianz Elite Assure Plan is non-guaranteed, making it essential to estimate returns for proper assessment.
We shall calculate the Internal Rate of Return (IRR) based on the Benefit Illustration from the policy brochure.
Benefit Illustration – IRR Analysis of Bajaj Allianz Life Elite Assure Plan
For a 30-year-old male who chooses a Bajaj Allianz Life Elite Assure policy with a sum assured of ₹5,89,520, the policy term is 25 years, and an annual premium of ₹58,952 is payable for the entire term.
| Male | 30 years |
| Sum Assured | ₹ 5,89,250 |
| Policy Term | 25 years |
| Premium Paying Term | 25 years |
| Annualised Premium | ₹ 58,952 |
The maturity benefit, along with bonuses, is receivable at the end of the Bajaj Allianz Elite Assure Plan policy term. The assumed investment returns of 4% p.a. and 8% p.a. are for illustrative purposes only and 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 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 31 | 2 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 32 | 3 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 33 | 4 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 34 | 5 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 35 | 6 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 36 | 7 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 37 | 8 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 38 | 9 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 39 | 10 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 40 | 11 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 41 | 12 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 42 | 13 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 43 | 14 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 44 | 15 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 45 | 16 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 46 | 17 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 47 | 18 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 48 | 19 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 49 | 20 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 50 | 21 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 51 | 22 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 52 | 23 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 53 | 24 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 54 | 25 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 55 | 20,40,000 | 35,96,274 | |||
| IRR | 2.42% | 6.32% | |||
Under the 4% return scenario, the final maturity value is ₹20.40 lakhs, with an IRR of 2.42% as per the Bajaj Allianz Elite Assure Plan maturity calculator.
Under the 8% return scenario, the final maturity value is ₹35.96 lakhs, with an IRR of 6.32% as per the Bajaj Allianz Elite Assure Plan maturity calculator.
While the 8% return scenario yields a return close to the inflation rate, it is important to consider the 25-year policy term. For long-term investments, the yield should exceed the inflation rate to ensure that you can meet your financial goals comfortably.
The key takeaway from this IRR analysis is that the Bajaj Allianz Life Elite Assure plan may not be a suitable option for your investment portfolio due to poor returns.
Bajaj Allianz Life Elite Assure Plan Vs. Other investment
Next, we compare the investment return of the Bajaj Allianz Life Elite Assure plan with other investment options to illustrate how you could allocate your savings more effectively.
By meeting your life cover needs with a pure-term insurance policy, you can invest your savings separately based on your risk tolerance.
Bajaj Allianz Life Elite Assure Plan Vs. Pure Term + PPF / ELSS
Using the same metrics as the previous illustration, we consider a pure-term life insurance policy with a sum assured of ₹6 lakhs (similar to the benefit illustration of ₹5.89 lakhs) that costs an annual premium of ₹2,900 for a 25-year term.
The annual premium for the Bajaj Allianz Life Elite Assure plan is ₹58,952, so you can invest the remaining ₹56,052 each year.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 6,00,000 |
| Policy Term | 25 years |
| Premium Paying Term | 25 years |
| Annualised Premium | ₹ 2,900 |
| Investment | ₹ 56,052 |
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 30 | 1 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 31 | 2 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 32 | 3 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 33 | 4 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 34 | 5 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 35 | 6 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 36 | 7 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 37 | 8 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 38 | 9 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 39 | 10 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 40 | 11 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 41 | 12 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 42 | 13 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 43 | 14 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 44 | 15 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 45 | 16 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 46 | 17 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 47 | 18 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 48 | 19 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 49 | 20 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 50 | 21 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 51 | 22 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 52 | 23 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 53 | 24 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 54 | 25 | -58,952 | 5,89,520 | -58,952 | 5,89,520 |
| 55 | 38,51,899 | 76,83,549 | |||
| IRR | 6.77% | 11.16% | |||
We examine two scenarios where the saved amount is invested in PPF (Public Provident Fund) and ELSS (Equity-Linked Savings Scheme).
1. PPF Scenario: The final maturity value is ₹38.51 lakhs with an IRR of 6.77%.
2. ELSS Scenario: ELSS investments are subject to capital gains tax upon redemption. The pre-tax value is ₹83.70 lakhs, and the post-tax value is ₹76.83 lakhs, resulting in an IRR of 11.16%.
| ELSS Tax Calculation | |
| Maturity value after 25 years | 83,70,466 |
| Purchase price | 14,01,300 |
| Long-Term Capital Gains | 69,69,166 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 68,69,166 |
| Tax paid on LTCG | 6,86,917 |
| Maturity value after tax | 76,83,549 |
This comparison demonstrates that proper allocation of your savings based on your goals can yield better returns. Such yields are not achievable if you combine insurance and investment in a single product like the Bajaj Allianz Life Elite Assure Plan.
Final Verdict on Bajaj Allianz Life Elite Assure Plan
Bajaj Allianz Elite Assure Plan is a traditional participating endowment savings plan that offers both life cover protection and investment opportunities for life goals. The investment return depends on loyalty additions and bonus declarations, making the maturity benefit non-guaranteed.
Upon analysing the plan, it is clear that the potential return is low, making it unsuitable for your investment portfolio.
To ensure your financial plan stays on track, you need a long-term investment that can comfortably outpace inflation. Bajaj Allianz Life Elite Assure does not meet this criterion and also has a high agent commission.
To achieve your financial goals, discipline your savings and invest in products that match your risk tolerance. Ensure you have an adequate term insurance plan to secure your family. This approach will help you reach your life goals more effectively.
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For personalized financial planning, consider consulting a Certified Financial Planner (CFP). They can create a tailored financial plan based on your individual needs and requirements.
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