Listen to this article
Is the Bajaj Allianz Life Future Wealth Gain IV the right choice to offer both Protection and Growth?
Can the Bajaj Allianz Life Future Wealth Gain IV plan secure your financial future while building wealth over time?
Can the Bajaj Allianz Life Future Wealth Gain IV plan truly deliver the dual benefits of insurance protection and market-linked wealth creation?
In this review, we will explore its features, benefits, advantages, disadvantages, and the cost of investment. This detailed analysis aims to provide you with valuable insights to make an informed investment decision.
Table of Contents:
What is the Bajaj Allianz Life Future Wealth Gain IV?
What are the features of the Bajaj Allianz Life Future Wealth Gain?
Who is eligible for the Bajaj Allianz Life Future Wealth Gain IV?
What are the benefits of the Bajaj Allianz Life Future Wealth Gain IV?
4. Return of Mortality Charges
What are the Investment strategies and the fund options of Bajaj Allianz Life Future Wealth Gain IV?
What are the charges under the Bajaj Allianz Life Future Wealth Gain IV?
Grace period, Discontinuance and Revival of Bajaj Allianz Life Future Wealth Gain IV
Free look period of Bajaj Allianz Life Future Wealth Gain IV
Surrendering Bajaj Alliance Life Future Wealth Gain IV
What are the advantages of Bajaj Allianz Life Future Wealth Gain IV?
What are the disadvantages of Bajaj Allianz Life Future Wealth Gain IV?
Research Methodology of Bajaj Allianz Life Future Wealth Gian IV
Benefit illustration – IRR Analysis of Bajaj Allianz Life Future Wealth Gain
Bajaj Allianz Life Future Wealth Gian Vs. Other investments
Bajaj Allianz Life Future Wealth Gian Vs. Pure-term + PPF / ELSS
Final Verdict on Bajaj Allianz Life Future Wealth Gian IV
What is the Bajaj Allianz Life Future Wealth Gain IV?
Bajaj Allianz Life Future Wealth Gain IV is a non-participating, life, individual, Unit-Linked regular/limited premium payment plan. Bajaj Allianz Life Future Wealth Gain IV offers the dual benefit of protection and growth to fulfil the dreams of your loved ones.
What are the features of the Bajaj Allianz Life Future Wealth Gain?
- Flexibility to choose a high life insurance cover.
- Access to two distinct investment portfolio strategies.
- Loyalty Additions are awarded every five years, starting from the 15th policy year.
- Option to receive death and maturity benefits in instalments via the Settlement Option.
- Choice of various policy terms to suit individual needs.
- Ability to reduce regular or limited premiums.
Who is eligible for the Bajaj Allianz Life Future Wealth Gain IV?
What are the benefits of the Bajaj Allianz Life Future Wealth Gain IV?
1. Maturity benefit
Fund Value will be payable on the survival of the life assured to the maturity date, provided the Bajaj Allianz Life Future Wealth Gain IV policy is in force
2. Death benefit
The death benefit payable will be,
Higher of:
Prevailing Sum assured or Regular Premium Fund Value
PLUS
Higher of:
Top up Sum Assured or Top up Premium Fund Value
The death benefit is subject to the Guaranteed Death Benefit of 105% of the total premiums paid, till the date of death.
3. Loyalty Additions
Loyalty Additions will be added to the Regular Premium Fund Value, as a percentage of the average of the daily regular premium fund values during the previous 3 years (including the current year) at the end of every 5 policy years starting from the end of the 15th policy year
4. Return of Mortality Charges
At the end of the Policy term (i.e. on the maturity date) or the end of the 15th policy year whichever is later, the total amount of Mortality charges deducted in respect of Life cover provided throughout the Policy term, will be added back as ROMC, to the Regular Premium Fund Value
What are the Investment strategies and the fund options of Bajaj Allianz Life Future Wealth Gain IV?
Bajaj Allianz Life Future Wealth Gain IV provides you with two unique portfolio strategies, which can be chosen at the inception of your policy or on any subsequent policy anniversary:
i.) Investor selectable Portfolio Strategy
ii.) Wheel of Life Portfolio Strategy
i.) Investor Selectable Portfolio Strategy
If you want to allocate your Premiums based on your personal choice and decision, you can opt for this Investment Strategy and choose from among the 18 Funds below to suit your investment needs.
| Asset Allocation | |||||
| S.no | Fund Name | Equity | Debt | Money Market | Risk profile |
| 1 | Equity Growth Fund II | Not less than 60% | 0% – 40% | 0% – 40% | Very High |
| 2 | Accelerator Mid-Cap Fund II | Not less than 60% (at least 50% in Mid cap) | 0% – 40% | 0% – 40% | Very High |
| 3 | Pure Stock Fund | Not less than 60% | 0% – 40% | 0% – 40% | Very High |
| 4 | Pure Stock Fund II | Not less than 75% | — | 0% -25% | Very High |
| 5 | Asset Allocation Fund II | 40% – 90% | 0% – 60% | 0% – 50% | High |
| 6 | Blue-chip Equity Fund | Not less than 60% | 0% – 40% | 0% – 40% | High |
| 7 | Bond Fund | — | 40% – 100% | 0% – 60% | Moderate |
| 8 | Liquid Fund | — | — | 100% | Low |
| 9 | Flexi Cap Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| 10 | Sustainable Equity Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| 11 | Small Cap Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| 12 | Dynamic Asset Allocation Fund | 10% 90% | 10% 90% | 0% – 80% | High |
| 13 | Individual Short-Term Debt Fund | — | 40% – 100% | 0% – 60% | Moderate |
| 14 | Midcap Index Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| 15 | SmallCap Quality Index Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| 16 | Nifty Alpha 50 Index Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| 17 | Nifty 200 Alpha 30 Index Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| 18 | Nifty 200 Momentum 30 Index Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
ii.) Wheel of Life Portfolio Strategy – II
In this Portfolio Strategy at the commencement of the Policy, the Regular/Limited Premium, and the Top-up Premium, if any, would be allocated in the Funds mentioned (namely Blue-chip Equity, Equity Growth Fund II, Accelerator Mid-Cap Fund II, Bond Fund & Liquid Fund) in the proportion as mentioned in the table below, depending on the outstanding years to maturity
| Proportion | ||||||
| Years to Maturity | Blue-chip Equity Fund | Equity Growth Fund II | Accelerator Mid-Cap Fund II | Bond Fund | Liquid Fund | Total |
| 20 & above | 20% | 50% | 30% | 0% | 0% | 100% |
| 19 | 30% | 50% | 20% | 0% | 0% | 100% |
| 18 | 30% | 50% | 20% | 0% | 0% | 100% |
| 17 | 30% | 50% | 20% | 0% | 0% | 100% |
| 16 | 30% | 50% | 20% | 0% | 0% | 100% |
| 15 | 40% | 40% | 15% | 5% | 0% | 100% |
| 14 | 40% | 40% | 10% | 10% | 0% | 100% |
| 13 | 40% | 40% | 5% | 15% | 0% | 100% |
| 12 | 40% | 40% | 0% | 20% | 0% | 100% |
| 11 | 40% | 35% | 0% | 25% | 0% | 100% |
| 10 | 40% | 30% | 0% | 30% | 0% | 100% |
| 9 | 40% | 25% | 0% | 35% | 0% | 100% |
| 8 | 40% | 20% | 0% | 40% | 0% | 100% |
| 7 | 40% | 15% | 0% | 45% | 0% | 100% |
| 6 | 40% | 10% | 0% | 50% | 0% | 100% |
What are the charges under the Bajaj Allianz Life Future Wealth Gain IV?
A. Premium Allocation charge
It depends on the premium amount, premium paying mode and the Bajaj Allianz Life Future Wealth Gain IV policy year. From the 11th policy year onwards, there is no premium allocation charge
B. Policy Administration charge
This charge is a % of the Annualized premium. It is applicable during and after the premium payment term and will be deducted at each monthly anniversary.
C. Fund Management charges
| Fund Name | Fund Management Charge |
| Equity Growth Fund II | 1.35% |
| Accelerator Mid-Cap Fund II | 1.35% |
| Pure Stock Fund | 1.35% |
| Pure Stock Fund II | 1.30% |
| Asset Allocation Fund II | 1.25% |
| Blue-chip Equity Fund | 1.25% |
| Flexi Cap Fund | 1.35% |
| Sustainable Equity Fund | 1.35% |
| Small Cap Fund | 1.35% |
| Dynamic Asset Allocation Fund | 1.35% |
| Individual Short-Term Debt Fund | 0.95% |
| Liquid Fund | 0.95% |
| Bond Fund | 0.95% |
| Midcap Index Fund | 1.35% |
| SmallCap Quality Index Fund | 1.35% |
| Nifty Alpha 50 Index Fund | 1.35% |
| Nifty 200 Alpha 30 Index Fund | 1.35% |
| Nifty 200 Momentum 30 Index Fund | 1.35% |
| Discontinued Life Policy Fund | 0.50% |
D.Miscellaneous Charge
A miscellaneous charge of Rs. 100 per transaction will be charged.
E. Discontinuance /Surrender Charge
It depends on the Annual premium amount and the year of discontinuance or surrender. There is no Discontinuance /Surrender Charge from the 5th policy year.
F. Mortality Charge
Mortality Charges will be deducted at each monthly anniversary by the cancellation of units. Female Life Assured will be eligible for an age setback of 3 years.
Inference from Charges
Like many other ULIPs, Bajaj Allianz Life Future Wealth Gain IV imposes various charges that can significantly impact long-term returns. This highlights a notable difference when compared to investments in other market-linked instruments.
Grace period, Discontinuance and Revival of Bajaj Allianz Life Future Wealth Gain IV
Grace period
A grace period of 30 days for yearly, half-yearly & quarterly premium payment frequency and 15 days is available for monthly premium payment frequency from the due date of Regular/Limited Premium payment.
Discontinuance
On Discontinuance of Regular Premiums due during the first 5 Policy years, the Bajaj Allianz Life Future Wealth Gain IV Policy will be converted to a Discontinued Life Policy and the Regular Premium Fund Value less the Discontinuance/Surrender charge along with Top-up Premium Fund Value, if any, will be transferred to the Discontinued Life Policy fund.
The Discontinuance Value shall be payable as the Surrender Benefit at the end of the lock-in period of five Policy years.
On Discontinuance of Regular Premiums due after the lock-in period of 5 Policy years, the Policy will be, immediately & automatically, converted to a Paid-up Policy.
The Paid-up Sum Assured will be the Sum Assured in the Policy multiplied by the proportion of the number of Regular Premiums paid to the number of Regular Premiums payable in the Policy.
Revival
A Bajaj Allianz Life Future Wealth Gain IV policy that has been discontinued or is paid up due to non-payment of premiums can only be revived within 3 years from the date of the first unpaid premium.
Free look period of Bajaj Allianz Life Future Wealth Gain IV
If the Bajaj Allianz Life Future Wealth Gain IV policyholder disagrees with any of the terms or conditions, he has the option to return the policy within 30 days from the date of receipt of the policy document whether received electronically or otherwise.
Surrendering Bajaj Alliance Life Future Wealth Gain IV
During the lock-in period of the first 5 policy years: The Regular Premium Fund Value less the discontinuance/ surrender charge, along with the Top-Up Premium Fund Value, if any, as on the date of surrender, will be credited to the Discontinued Life Policy Fund.
The Discontinuance Value, at the end of the Lock-in Period, will be payable to the Bajaj Allianz Life Future Wealth Gain IV Policyholder as Surrender Value.
On surrender after the lock-in period, the surrender value available will be the Total Fund Value as of the date of surrender.
What are the advantages of Bajaj Allianz Life Future Wealth Gain IV?
- Flexibility to switch between investment funds based on your risk appetite through the Investor Selectable Portfolio Strategy.
- Option to transition between the two investment Strategies at any policy anniversary.
- Ability to reduce the current Regular Premium after the first five policy years.
- Flexibility to modify the premium payment term (PPT) and frequency.
- Option to make additional contributions with Top-Up Premiums.
- Systematic Partial Withdrawals enable periodic fund withdrawals at a chosen percentage or amount.
- Facility for partial withdrawals any time after the fifth policy year.
- Choice to receive Maturity or Death Benefits in instalments.
What are the disadvantages of Bajaj Allianz Life Future Wealth Gain IV?
-
- No liquidity is available during the first five policy years.
- The plan does not provide a loan facility.
- The sum assured is relatively low.
- Fund options appear repetitive due to similar asset allocation across choices.
Research Methodology of Bajaj Allianz Life Future Wealth Gian IV
Assessing potential returns is crucial for comparing this plan with other market-linked instruments, helping you make an informed choice.
To demonstrate, let’s calculate the Internal Rate of Return (IRR) using the benefit illustration provided in the policy brochure.
Benefit illustration – IRR Analysis of Bajaj Allianz Life Future Wealth Gain
A 30-year-old male opts for the Bajaj Allianz Life Future Wealth Gain IV policy with a policy term of 15 years. He chooses to pay an annual premium of ₹1,00,000 for the entire premium payment term of 15 years, with a sum assured of ₹10,00,000.
| Male | 30 years |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 1,00,000 |
Premiums are paid throughout the policy term, and the fund value is accessible at maturity. The illustrated returns at 4% and 8% are not guaranteed and do not represent the upper or lower limits of returns under the policy.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 30 | 1 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 31 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 32 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 33 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 34 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 35 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 36 | 7 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 37 | 8 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 38 | 9 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 39 | 10 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 40 | 11 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 41 | 12 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 42 | 13 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 43 | 14 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 44 | 15 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 45 | 17,27,808 | 23,96,552 | |||
| IRR | 1.75% | 5.66% | |||
At 4% return, the fund value is ₹17.27 lakh, resulting in an IRR of 1.75% as per the Bajaj Allianz Life Future Wealth Gain IV plan maturity calculator.
At 8% return, the fund value is ₹23.96 lakh, yielding an IRR of 5.66% as per the Bajaj Allianz Life Future Wealth Gain IV plan maturity calculator.
Despite a 15-year term representing a long-term investment, the returns are underwhelming and do not justify the associated risks. Additionally, the sum assured is low. As such, the Bajaj Allianz Life Future Wealth Gain IV may not be an ideal option for wealth accumulation.
Bajaj Allianz Life Future Wealth Gian Vs. Other investments
Market-linked products often provide superior returns and liquidity compared to Bajaj Allianz Life Future Wealth Gain IV.
Let’s evaluate an alternative investment strategy where insurance and investment are split. A Pure Term Life Insurance Policy for life cover and targeted investments for wealth accumulation.
Bajaj Allianz Life Future Wealth Gian Vs. Pure-term + PPF / ELSS
Using the same metrics as the earlier illustration, a Pure Term Life Insurance Policy with a 15-year term costs approximately ₹4,100 annually, leaving an annual surplus of ₹95,900 for investments. This surplus can be directed toward options aligned with your risk appetite:
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 4,100 |
| Investment | ₹ 95,900 |
Low-Risk Option: Investing in a debt instrument like PPF yields a maturity value of ₹26 lakh, with an IRR of 6.61%. Despite being a low-risk option, PPF outperforms the 8% scenario of Bajaj Allianz Life Future Wealth Gain IV.
High-Risk Option: Investing in an equity instrument like an ELSS fund generates a fund value of ₹40.04 lakh at the end of 15 years. After capital gains tax, the post-tax value is ₹36.99 lakh, offering an IRR of 10.64%.
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 30 | 1 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 31 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 32 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 33 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 34 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 35 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 36 | 7 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 37 | 8 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 38 | 9 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 39 | 10 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 40 | 11 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 41 | 12 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 42 | 13 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 43 | 14 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 44 | 15 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 45 | 26,00,942 | 36,99,060 | |||
| IRR | 6.61% | 10.64% | |||
| ELSS Tax Calculation | |
| Maturity value after 15 years | 40,04,140 |
| Purchase price | 14,38,500 |
| Long-Term Capital Gains | 25,65,640 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 24,40,640 |
| Tax paid on LTCG | 3,05,080 |
| Maturity value after tax | 36,99,060 |
This alternate approach delivers higher returns and greater liquidity. Unlike Bajaj Allianz Life Future Wealth Gain IV, which has limitations in both returns and liquidity, this strategy allows you to access your funds as needed while achieving better financial outcomes.
Final Verdict on Bajaj Allianz Life Future Wealth Gian IV
The Bajaj Allianz Life Future Wealth Gain IV plan requires premium payments for a limited period or throughout the policy term, with the fund value accessible at maturity. However, high charges result in sub-optimal returns, hindering effective wealth accumulation.
Market-linked investments aim to deliver returns that surpass inflation, but the returns from the Bajaj Allianz Life Future Wealth Gian plan are unremarkable, and the sum assured is relatively low and it also has a high agent commission.
Consequently, combining life insurance with market-related investments proves to be an inefficient strategy. Hence, Bajaj Allianz Life Future Wealth Gain is not the right choice for your portfolio.
A pure-term life insurance policy is a more effective solution for life coverage. To achieve your financial goals, prioritize building a diversified investment portfolio tailored to your objectives.
When it comes to financial advice, are Quora, Facebook, and Twitter the final word?
Seeking advice from a financial advisor can provide valuable guidance, helping you craft a personalized financial plan based on your risk tolerance, goals, and investment horizon.
Leave a Reply