Bajaj Allianz Life Flexi Income Goal Plan Review – Is It Good or Bad?

Bajaj Allianz Life Flexi Income Goal Plan Review – Is It Good or Bad?

Our Financial Plan has to be flexible enough to meet our income needs & fulfill our Life’s Financial Goals.

Some of the Life Goals may need regular income whereas some may need lump sum income or some may need a mix of regular and lump sum income.

Bajaj Allianz Life Flexi Income Goal Plan provides regular income or lump sum income based on your chosen option.

Bajaj Allianz Flexi Income Goal has two variants Viz.,

• Income Benefit
• Enhanced Benefit

This article focuses on the Income Benefit Variant. This detailed review will help you to take an informed decision on the suitability of the plan.

Table of Contents:

1.)What is Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan
2.)Features of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan
3.)Eligibility Criteria of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan
4.)Review of Benefits under the Bajaj Flexi Income Goal – Income Benefit Plan

• Maturity Benefits
• Survival Benefit
• Death Benefit

5.)Review of Other Benefits of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan
6.)Review of Grace Period, Lapse, Revival & Paid-up of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan
7.)Free Look-Up period of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan
8.)Surrendering the Bajaj Allianz Flexi Income Goal – Income Benefit Plan
9.)Advantages [Pros] of the Bajaj Allianz Flexi Income Goal – Income Benefit Plan
10.) Disadvantages [Cons]of the Bajaj Allianz Flexi Income Goal – Income Benefit Plan
11.) Research Methodology Review
12.)IRR [Internal Rate of Return] Analysis of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan
13.) Bajaj Allianz Life Flexi Income Goal – Income Benefit Vs. Other Investment Plans
14.)Bajaj Allianz Life Flexi Income Plan – Income Benefit Vs. Pure Term Insurance + PPF / ELSS Analysis
15.)Final Verdict on the Bajaj Allianz Life Flexi Income Goal Plan – Income Benefit Plan Review

What is Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan

Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan is a Non-Linked, Participating, Guaranteed Income, Life Insurance Plan.

If you have wondered, what is the meaning of Income Goal?

It is because of the Guaranteed Income provided every month by this plan.

It provides a cash bonus from the first month itself. You can get more benefits like Joint Life Cover along with a waiver of premium option to provide a lump sum or guaranteed regular income for the spouse in case of Life Assured’s death.

It offers flexibility to receive your policy benefits after the premium paying term, in a lump sum, or as regular income.

Features of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan

• Cash Bonus, if any from the 1st month onwards.
• You have the option to Accumulate the Survival Benefits and earn an investment return.
• The joint Life Cover option is available.
• 100% of the Sum Assured as Guaranteed Monthly Income (GMI) from the end of the PPT till Maturity.
• At Maturity, get 50% of the Sum Assured as a Maturity Booster.

Eligibility Criteria of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan

The basic information we need to know about this plan is given at a glance below;

Eligibility Parameters	Minimum	Maximum
Age at Entry	0 year 18 years (Joint Life)	55 years
Age at Maturity	18 years	99 years
Premium Payment Term (PPT)	5 to 20 years
Policy Term (PT)	Premium Payment Term plus 12 years	99 minus Age at Entry (Subject to 60 years maximum)
Annual Premium	As per the minimum sum assured	As per the maximum sum assured
Guaranteed Monthly Income (GMI)
PPT – 5 -11 years	1,200	No limit
PPT – 12 – 14 years	1,400
PPT – 15 – 19 years	1,600
PPT – 20 years	2,200
Sum Assured
PPT – 5 -11 years	1,58,400	No limit
PPT – 12 – 14 years	2,01,600
PPT – 15 – 19 years	2,30,400
PPT – 20 years	3,16,800

The PPT for different time periods is calculated in the above illustration.

Review of Benefits under the Bajaj Flexi Income Goal – Income Benefit Plan

Maturity Benefit

Provided the Policy is still in force and the Life Assured is alive, the following maturity benefit will be paid;

• Maturity Booster (50% of Sum Assured) plus
• Cash Value (if not fully withdrawn) plus
• Terminal Bonus (if any).

Survival Benefit

Cash Bonus (CB): At the end of each Policy year, the non-guaranteed CB (if any) shall be payable. You can opt to take the CB in monthly instalments. Also, you will have the option to Accumulate the CB declared in the Policy instead of receiving your cash pay-outs and earn an Investment Return on your Accumulated Cash Bonus (ACB).

Guaranteed Monthly Income (GMI): When your Premium Payment Term (PPT) ends, your GMI shall be payable every month, till the end of your Policy Term. The first instalment of GMI will be paid at the end of the PPT. You can opt to take GMI in annual instalments. You also have the option to Accumulate Guaranteed Monthly Income (AGMI) in the Policy, instead of receiving the pay-outs and earning Investment returns on the AGMI.

Cash Value (CV): If you have accumulated the CB &/or GMI, instead of receiving it as payouts, you will be entitled to Cash Value which will be a total of ACB &/or AGMI including investment return thereon. Anytime during the Policy Term, you will have the option to withdraw the CV (partially or fully).

Death Benefit review

If all due premiums are paid, then in case of unfortunate death of the life assured during the policy term,

• 105% of Cash Value (if not fully withdrawn) plus Terminal Bonus (if any) will be reviewed and paid immediately as a lump sum and
• Sum Assured on Death will be paid as monthly income, over a period equal to the outstanding Policy Term or 12 years, whichever is lower.

Review of Other Benefits of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan

Option to take Death Benefit in a Lump sum: At the time of intimation of death, the Primary Life Assured (in case of Joint Life) or the nominee, as applicable will have the option to take the death benefit in Lumpsum instead of monthly instalment.

Option to take Maturity Benefit in Installments: You will have the option to take Maturity Benefit in monthly or yearly installments calculated over a period of 5, 10, 15, or 20 years.

Alteration of Premium Payment Mode: You will have the option to change the prevailing Premium Payment Frequency under your policy at any policy anniversary.

Premium frequency	Frequency Factor
Monthly	0.09
Quarterly	0.26
Half-yearly	0.51
Yearly	1

Review of Grace Period, Lapse, Revival & Paid-up of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan

Grace period:

A Grace Period of 15 days for the monthly frequency of premium payment and 30 days for other frequencies to pay the premium without any penalty will be allotted to the policyholder.

Lapse:

If you have not paid at least 2 full Policy Years’ premiums, the Policy will immediately & automatically lapse at the expiry of the Grace Period, and no benefit other than the Accumulated Cash Bonus if any will be payable under the Policy.

Revival:

You can revive a Policy (which has lapsed or has become paid up) within five (5) years from the due date of the first unpaid premium.

Paid-Up:

If you have paid at least 2 full Policy Years’ premiums and not paid the subsequent premiums, then the Policy will be immediately & automatically converted to a paid-up Policy at the expiry of the Grace Period

The Sum Assured, Sum Assured on Death, Maturity Booster and GMIs under the Policy will be automatically reduced, respectively to the Paid-up Sum Assured, Paid-up Sum Assured on Death, Paid-up Maturity Booster and Paid-up GMIs.

Free Look-Up period of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan

If you disagree with any of the terms & conditions of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan, you will have the option to return the policy Within 15 days of receipt of this policy to the corporation.

The free look-up period will be reviewed and extended up to 30 days in case of an electronic policy and policy obtained through distance mode.

Surrendering the Bajaj Allianz Flexi Income Goal – Income Benefit Plan

You may surrender your Bajaj Allianz Flexi Income Goal – Income Benefit Policy anytime, provided at least 2 full Policy Years’ premiums have been paid.

The Surrender Benefit payable will be higher than Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV)

Advantages [Pros] of the Bajaj Allianz Flexi Income Goal – Income Benefit Plan

• Option to receive or accumulate the cash bonus or Guaranteed Maturity Benefit. Through Accumulation you can enjoy the power of compounding.
• In case of the Life Assured’s death under Joint Life Cover, along with the waiver of the premium option, the spouse receives a lump sum or guaranteed regular income.
• You have the option to take a policy loan, subject to a maximum limit of 80% of the surrender benefit.
• You can enjoy extra coverage during the policy term by choosing the optional additional rider benefits at a nominal extra cost.
• High Sum Assured Rebate (HSAR) is available on the annual premium for each complete additional Rs. 1,000 Sum Assured purchased over and above the minimum sum assured.
• The tax benefit is available as per Sec 80 C & Sec 10(10D).

Disadvantages [Cons]of the Bajaj Allianz Flexi Income Goal – Income Benefit Plan

• The lock-in period is for 2 years for surrendering or loan option.
• The cash bonus which you receive immediately may not help you to meet any big-ticket expenses.
• Maturity benefit is a non-guaranteed amount, so you can’t earmark for any of your life’s financial goals.
• In case you have chosen the accumulation option in cash bonus (ACB) / Guaranteed Monthly Income (AGMI), then the Investment return on ACB and AGMI will be declared by the company every year.

For further details, you can refer to the Bajaj Allianz Life Flexi Income Goal – Income Benefit Policy Brochure (pdf ).

Research Methodology -Review

Bajaj Flexi Income Goal – Income Benefit Plan has regular income which can be deferred & received along with the Maturity benefit.

Let us assume that the accumulation option is chosen for cash benefit (CB) & Guaranteed Monthly Income (GMI). So that we can reap the benefit of compounding. Let us analyze the plan in terms of return.

This return could be compared with other products to decide whether we should opt for Bajaj Allianz Flexi Income Goal – Income Benefit Plan.

IRR [Internal Rate of Return] Analysis of the Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan

Assumptions:

Male	30 years
Sum Assured	Rs. 10,28,016
Policy Term	24 years
Premium Paying Term	12 years
Annual Premium	Rs. 1,00,003

He receives an annual cash bonus from the beginning of the policy term and Guaranteed Monthly Income after the end of the premium paying term. The assumed rate of investment return for these cash bonuses & Guaranteed Monthly Income is at 4% & 8%.

Also, the plan has a non-guaranteed bonus payable along with the maturity. The assumed bonus rate is at 4% & 8%. They are not guaranteed & are for illustrative purposes only.

		At 4% p.a.		At 8% p.a.
Age	Year	Annualised premium / Maturity benefit	Death benefit	Annualised premium / Maturity benefit	Death benefit
30	1	-93,835	10,28,016	-79,443	10,28,016
31	2	-93,835	10,28,016	-79,443	10,28,016
32	3	-93,835	10,28,016	-79,443	10,28,016
33	4	-93,835	10,28,016	-79,443	10,28,016
34	5	-93,835	10,28,016	-79,443	10,28,016
35	6	-93,835	10,28,016	-79,443	10,28,016
36	7	-93,835	10,28,016	-79,443	10,28,016
37	8	-93,835	10,28,016	-79,443	10,28,016
38	9	-93,835	10,28,016	-79,443	10,28,016
39	10	-93,835	10,28,016	-79,443	10,28,016
40	11	-93,835	10,28,016	-79,443	10,28,016
41	12	-93,835	10,28,016	-79,443	10,28,016
42	13	91,836	10,28,016	1,06,228	10,28,016
43	14	91,836	10,28,016	1,06,228	10,28,016
44	15	91,836	10,28,016	1,06,228	10,28,016
45	16	91,836	10,28,016	1,06,228	10,28,016
46	17	91,836	10,28,016	1,06,228	10,28,016
47	18	91,836	10,28,016	1,06,228	10,28,016
48	19	91,836	10,28,016	1,06,228	10,28,016
49	20	91,836	10,28,016	1,06,228	10,28,016
50	21	91,836	10,28,016	1,06,228	10,28,016
51	22	91,836	10,28,016	1,06,228	10,28,016
52	23	91,836	10,28,016	1,06,228	10,28,016
53	24	91,836	10,28,016	1,06,228	10,28,016
54		5,14,008		8,84,094
	IRR	2.62%		5.80%

In the above illustration we have calculated the IRR(Interest Rate) of maturity benefit at 4% p.a and at 8% p.a.

The maturity proceeds are meagre when you consider the time value of your Investment Money. After 24 years, these proceeds will not help you to meet any of your Financial Goals.

The IRR (Internal Rate of Return)under the 4% scenario is at 2.62% & under the 8% scenario, the IRR is at 5.80%. This rate is less than a Savings Bank account interest rate.

Other fixed-income instruments like Bank Fixed deposits can fetch you better returns even after taxation. Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan is not beneficial for an investor in the long run.

Power of Compounding Calculator By Bajaj Allianz Life

Bajaj Allianz Life Flexi Income Goal – Income Benefit Vs. Other Investment Plans

Most probably your investment decisions are based on the returns of the product. So, let us compare the returns of the Bajaj Allianz Flexi Income Goal – Income Benefit Plan with other investment returns.

This plan has both Insurance & Investment components. For comparison, let us consider investing in a combination of Pure Term Insurance Policy for life cover & separate Investment Product for Wealth Creation Purposes.

In the above illustration, the Sum Assured is around 10 Lakhs for an annual premium of Rs. 1 lakh. Let us assume the same for our comparison.

But, Rs. 10 lakhs life cover would not be sufficient to protect your family financially in the case of your unfortunate absence. While calculating the life insurance coverage consider the following,

• Outstanding loan (Home Loan)
• Life Goals (children’s education)
• Regular income that your family will need in your absence.

Bajaj Allianz Life Flexi Income Plan – Income Benefit Vs. Pure Term Insurance + PPF / ELSS-Analysis

Assumptions:

Pure Term Insurance
Sum Assured	Rs. 10 Lakhs
Policy Term	24 years
Premium Paying Term	10 years
Annual Premium	Rs. 8000
Amount for Investment	Rs. 92,003

As you see the above table, you get an idea of how the annual cash flow is split between your life insurance & investment. For investment, PPF or ELSS can be chosen based on your personal risk appetite.

The PPF has a minimum subscription of Rs. 500 for 15 years. In the above illustration, the premium paying term is for 12 years, so in PPF the investment is adjusted in the last 3 years with a minimum subscription.

In the post-lock-in period of 15 years, the maturity proceeds are invested in a 7% return instrument for the next 9 years (to match the 24-year policy term as in the illustration).

The ELSS Mutual Fund has no lock-in or minimum investment concept. So, in the first 10 years, the cash flow is split between life cover premium & ELSS investment. In the next 2 years, the whole amount is invested in the ELSS fund. In the last 12 years, the ELSS fund grows without any contribution.

In this investment strategy, we avoided annual withdrawals to showcase the power of compounding. With the final maturity proceeds, you can achieve your life goals comfortably when compared to the Bajaj Allianz Life Flexi Income Goal Plan.

		Term Insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death benefit	Term Insurance premium + ELSS	Death benefit
30	1	-1,00,003	10,00,000	-1,00,003	10,00,000
31	2	-1,00,003	10,00,000	-1,00,003	10,00,000
32	3	-1,00,003	10,00,000	-1,00,003	10,00,000
33	4	-1,00,003	10,00,000	-1,00,003	10,00,000
34	5	-1,00,003	10,00,000	-1,00,003	10,00,000
35	6	-1,00,003	10,00,000	-1,00,003	10,00,000
36	7	-1,00,003	10,00,000	-1,00,003	10,00,000
37	8	-1,00,003	10,00,000	-1,00,003	10,00,000
38	9	-1,00,003	10,00,000	-1,00,003	10,00,000
39	10	-1,00,003	10,00,000	-1,00,003	10,00,000
40	11	-1,00,003	10,00,000	-1,00,003	10,00,000
41	12	-98,503	10,00,000	-1,00,003	10,00,000
42	13	-500	10,00,000	0	10,00,000
43	14	-500	10,00,000	0	10,00,000
44	15	-500	10,00,000	0	10,00,000
45	16	0	10,00,000	0	10,00,000
46	17	0	10,00,000	0	10,00,000
47	18	0	10,00,000	0	10,00,000
48	19	0	10,00,000	0	10,00,000
49	20	0	10,00,000	0	10,00,000
50	21	0	10,00,000	0	10,00,000
51	22	0	10,00,000	0	10,00,000
52	23	0	10,00,000	0	10,00,000
53	24	0	10,00,000	0	10,00,000
54		40,44,073		86,97,693
	IRR	6.65%		10.92%

From the above illustration the IRR(Internal Rate of Return) of Term Insurance + PPF and ELSS is calculated at 6.65% & 10.92% respectively.

The IRR (Internal Rate of Return) for the Pure Term Insurance along with the debt instrument PPF yields you an IRR of 6.65% & the IRR for Pure Term Insurance along with the equity instrument ELSS yields you a return of 10.92% (Post Tax).

In the Bajaj Allianz Life Flexi plan, the investment is eligible for tax deduction under 80 C & the maturity proceeds are tax-free (-under Sec 10 (10D).

Similarly, PPF is eligible for tax deduction & the maturity proceeds are tax-free. ELSS mutual Funds are eligible for tax deduction but the maturity proceeds are taxed. So, we have considered only the post-tax maturity amount & then calculated the IRR.

Under ELSS the pre-tax maturity amount is Rs. 97.62 lakhs. The post-tax maturity proceeds are Rs. 86.97 lakhs & the post-tax IRR is 10.92%. Even after paying tax, the ELSS fund option holds good.

ELSS Tax Calculation
Maturity value after 24 years	97,62,359
Purchase price	11,20,036
Long-Term Capital Gains	86,42,323
Exemption limit	1,25,000
Taxable LTCG	85,17,323
Tax paid on LTCG	10,64,665
Maturity value after tax	86,97,693

This clearly shows that the tax benefit you get from the life insurance is not worth the candle as there are other investment products available in the market which can yield you a consistent Inflation-beating return for the long term.

Bajaj Allianz Life Flexi Income Goal – Income Benefit vs. Bajaj Allianz Life Smart Wealth Goal – Wealth Variant Plan.

Bajaj Allianz Life Smart Wealth Goal – Wealth Variant Plan presents you with ten extraordinary fund alternatives in addition to 5 specific portfolio strategies.

Click below to read the complete review of this plan with precise calculations and illustrations.

Bajaj Allianz Life Smart Wealth Goal – Wealth Variant Plan Review: Good or Bad?

Bajaj Allianz Life Flexi Income Goal – Income Benefit vs. Other Investment Plans. Comparison Review

If you have read our review till now you must be clear of the fact that Term Insurance + PPF or ELSS seem to be far better options compared to this Bajaj Allianz Life Flexi Income Goal – Income Benefit plan. 

Don’t fall for new plans in the market without a thorough and detailed review and also don’t forget to compare and analyze the new plan with existing other investment options.

We have made this easy for you by doing a detailed check of the promises made in the official brochure by calculating and analyzing the IRR and providing you with illustrations.

 We have also reviewed the advantages (pros) and disadvantages (cons) with short and precise points that help you comprehend the official brochure better.

Final Verdict on the Bajaj Allianz Life Flexi Income Goal Plan – Income Benefit Plan

Bajaj Allianz Life Flexi Income Goal – Income Benefit Plan offers flexibility in receiving your benefits. But even If you receive your benefits in cash every year, it will not be sufficient to meet any big-ticket expenses.

But why do insurance agents try to sell you this plan? There are a lot of policies in the bazaar that give high agent commission and this is one of them!

Even If you accumulate, it is not beneficial to you in any way as the life cover is not adequate & also the IRR is not beneficial for the investor in the long run.

Don’t Park your savings in these Insurance Products for Tax benefits alone. And also, don’t fall for free amateur advice on social media platforms like Quora, Facebook, Twitter, etc.

Consult with your Financial Advisor & devise a Financial Plan that suits your personal requirement.