How to Surrender Bajaj Allianz Life Guaranteed Pension Goal Plan?

For Immediate Annuity - The Surrender Value will be the Special Surrender Value (SSV) For Deferred Annuities, • On surrender during the deferment period - the Surrender Value will be higher than the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV). • On surrender after the deferment period- the Surrender Value will be the Special Surrender Value (SSV). Surrender Value is applicable – Under Annuity Options B, F, G, H & I during the Annuity period (for immediate and deferred Annuity). All annuities during the deferment period (under deferred Annuity).

Bajaj Allianz Life Guaranteed Pension Goal Plan Review: Good or Bad?

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Retirement life is the second inning of our life.

We need to stay financially prepared so that our lifestyle goals are not compromised in this phase of life.

Will Bajaj Allianz Life Guaranteed Pension Goal Plan will help you to maintain your lifestyle?

Let us take a deep look at this plan and conduct a comparative analysis of Bajaj Allianz Life Guaranteed Pension Goal with other Investment Avenues available in the market.

What is Bajaj Allianz Life Guaranteed Pension Goal Plan?

It is a Non-Linked, Non- Participating, Deferred & Immediate Annuity plan.

The Bajaj Allianz Life Guaranteed Pension Goal Plan offers guaranteed income throughout life. There is a wide range of annuity options.

The annuity period starts as per your choice either immediate annuity (Single pay) or Deferred annuity (Limited / Regular pay).

Features of the Bajaj Allianz Life Guaranteed Pension Goal Plan

1. - Option to take a Joint life annuity with 50% or 100% annuity payable to your spouse after your death.
  - Your annuity amount is guaranteed at policy inception and is paid regularly as per your choice and need (Yearly/Half-yearly/Quarterly/Monthly).
  - Choose from a wide range of Annuity options (Nine options) to meet your requirement.
  - Option to receive Return of Purchase Price (ROP) on death or as Survival Benefit.

Annuity option available for all channels (excluding POS channel):

		Immediate Annuity	Deferred Annuity (Single Pay)	Deferred Annuity (Regular Pay)
A	Life Annuity	✔	✔	✔
B	Life Annuity with ROP on death	✔	✔	✔
C	Annuity Certain (5/10/15/20 yrs.) and life thereafter	✔	✖	✖
D	Joint Life Last Survivor with 50% of Annuity to spouse	✔	✖	✖
E	Joint Life Last Survivor with 100% of Annuity to spouse	✔	✖	✖
F	Joint Life Last Survivor with 100% of Annuity to spouse & with ROP on the death of Last Survivor	✔	✔	✖
G	Life Annuity with ROP on death or survival	✔	✔	✖
H	Life Annuity with ROP on death or in instalments on survival	✔	✔	✖
I	Family Pension	✔	✖	✖

Annuity plans of the Bajaj Allianz Life Guaranteed Pension Goal Plan in detail

1. 1. Option A
    
    Life Annuity: Annuity – Throughout life
  2. Option B
    
    Life Annuity with return of purchase price: Annuity – Throughout life & on death purchase price will be returned to your nominee
  3. Option C
    
    Annuity Certain & Life thereafter – Annuity – Certain period 5/10/15/20 years. Death during annuity certain period – Annuity Instalments will be paid to your nominee.
  4. Option D
    
    Joint Life Survivor with 50% of Annuity to Spouse: Annuity – Throughout life & on death your spouse will receive 50% of the prevailing Annuity throughout his/her life.
  5. Option E
    
    Joint Life Last Survivor with 100% of Annuity to spouse: Annuity – Throughout life & on death your spouse will receive 100% of the prevailing Annuity throughout his/her life.
  6. Option F
    
    Joint Life Last Survivor with 100% of Annuity to spouse & with Return of Purchase Price (ROP) on the death of Last Survivor: Annuity – Throughout life & on death your spouse will receive 100% of the prevailing Annuity throughout his/her life. On the death of the last survivor, the purchase price will be returned to your nominee.
  7. Option G
    
    Life Annuity with Return of Purchase Price (ROP) on death or survival: Annuity – Throughout life and on additionally on the policy anniversary after the 25^th policy year or the policy anniversary after attaining Age 85 (whichever 2 is later), the Purchase Price will be returned to you as Survival benefit with annuity continuing subsequently.
  8. Option H
    
    Life Annuity with Return of Purchase Price (ROP) on death or in instalments on survival: Annuity – Throughout life and additionally, starting from the policy anniversary after the 15th Policy Year or the policy anniversary after 2 attaining Age 70 (whichever is later), Survival benefit would be payable to you at each policy anniversary in instalments as per the Annuity payment frequency with Annuity continuing subsequently.
  9. Option I
    Family Pension: (Only for NPS subscribers): If the NPS subscriber has a spouse/spouse is alive – The annuity will be payable as per the Annuity option, Option F and if his/her spouse is not alive – Annuity will be payable as per the annuity option, Option B. On the death of both the policyholder and spouse, the purchase price of this plan shall be used to purchase an Annuity under Option B, on the dependent mother/father whoever is alive.

Immediate Annuity:

An annuity will be payable to you on each Annuity instalment date according to the Annuity payment frequency opted for by you at the inception of the policy.

Deferred Annuity:

An annuity will be payable to you on each Annuity instalment date, post-completion of the Deferment period, and according to the Annuity payment frequency opted by you at the inception of the policy. On death during the Deferment period, an amount equal to the Purchase price plus attached Guaranteed Additions, subject to a minimum of 105% of Total Premiums paid, shall be paid to your nominee.

Eligibility Criteria of the Bajaj Allianz Life Guaranteed Pension Goal Plan

Let us take a look at the basic information we need to know about entering this plan at a glance below;

	Immediate Annuity	Deferred Annuity
Minimum Age at entry	30 years	45 years
Maximum Age at entry	85 years	84 years
Minimum Annuity	Yearly -12,000
	Half-yearly – 6,000
	Quarterly – 3,000
	Monthly – 1000
Maximum Annuity	No Limit
Purchase Price	As per the prevailing Board Approved Underwriting Policy
Premium paying Term	Single premium	Single/Regular/ Limited Pay
		Minimum – 5 Years
		Maximum – 10 years
Modes of Payment of Premium	Not Applicable	Yearly, half-yearly, quarterly, monthly
Deferment Period	Not Applicable	Single premium – 1 year
		Regular/ Limited premium – PPT Chosen / 10 years
Pension Mode	Yearly, half-yearly, quarterly, monthly	Yearly, half-yearly, quarterly, monthly

Advantages of the Bajaj Allianz Life Guaranteed Pension Goal Plan

1. - You can customize it as per your requirement. Both the Premium paying term (Accumulation phase) & Annuity period (Distribution Phase) can be customized.
  - Guaranteed income throughout your life.
  - Option to pay Top-up Premiums any time after the Policy Commencement Date under the existing Immediate or Deferred Annuity Policy.
  - At any policy anniversary, Annuity payment frequency can be changed.
  - During the deferment period, Guaranteed Additions will be added to the Policy at the end of every month. (Applicable only for deferred Annuity).

Disadvantages of the Bajaj Allianz Life Guaranteed Pension Goal Plan

1. - Annuity can’t be relied on as the only source of income. It can be counted as an additional source of income.
  - The annuity amount is fixed throughout your life & not adjusted to inflation.
  - Some of the annuity options are available only for Immediate annuity & Single pay deferred annuity.
  - Annuity rate prevailing at the time of inception will be locked.
  - Annuity is taxable as per your slab rate.

For more details, you can refer to the Bajaj Allianz Life Guaranteed Pension Goal Policy Brochure.

A Grace Period, Revival & Paid-up of the Bajaj Allianz Life Guaranteed Pension Goal Plan

The below information is only applicable under the Deferred Annuity – Limited / Regular pay options.

Grace period:

The grace period is 30 days for payment frequencies other than a monthly mode of payment and 15 days for a monthly frequency mode of payment.

Revival:

Revival can be done within five (5) years of the due date of the first unpaid Premium and before the end of the Deferment Period.

Paid-up policy:

If you have not paid at least two full years’ Premiums, the Policy will be converted to a lapsed Policy at the end of the grace period, and no benefit will be payable.

If you have paid at least two full years’ Premiums, and subsequent Premiums have not been paid, your Policy will be converted to a Paid-up Policy at the end of the grace period.The annuity will be a converted to paid-up annuity.

Free Look Period of the Bajaj Allianz Life Guaranteed Pension Goal Plan

If the policyholder disagrees with any of the terms & conditions, he/she will have the option to return the Bajaj Allianz Life Guaranteed Pension Goal Policy Within 15 days of the date of receipt of the policy.

The Free Look Period will be extended up to 30 days in case the policy was bought online or through distance mode.

Surrendering the Bajaj Allianz Life Guaranteed Pension Goal Plan

For Immediate Annuity – The Surrender Value will be the Special Surrender Value (SSV)

For Deferred Annuities,

1. - On surrender during the deferment period – the Surrender Value will be higher than the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV).
  - On surrender after the deferment period- the Surrender Value will be the Special Surrender Value (SSV).

Surrender Value is applicable –

Under Annuity Options B, F, G, H & I during the Annuity period (for immediate and deferred Annuity).

All annuities during the deferment period (under deferred Annuity).

Research Methodology

Estimating the internal rate of return will help you to find out the suitability of the Bajaj Allianz Life Guaranteed Pension Goal Plan for the long-Term.

After estimating the IRR, we can compare it with other investment avenues to see if there are other instruments available in the market that will provide us with a better return than the Bajaj Allianz Life Guaranteed Pension Goal plan. After the IRR & Comparative Analysis, you can make an informed decision on your investments.

IRR of the Bajaj Allianz Life Guaranteed Pension Goal Life Plan

The Assumptions for Comparisons

Male	50 years
Premium Paying Term	Single pay
Purchase Price	25 Lakhs
Annuity frequency	Yearly
Assumed Life Expectancy	85 years

The illustration below is worked out for a 50-year-old male. The purchase price under a Single premium is Rs. 25 Lakhs. The annuity frequency chosen in the example below is for the Yearly mode.

Let us work out the IRR for Immediate & Deferred annuity under Plan options A & B. Let us assume the Life Expectancy for the Life insured as 85 years.

		Immediate Annuity		Deferred Annuity (Deferment period – 10 Years)
Age	Year	Option A Life Annuity	Option B Life Annuity with ROP	Option A Life Annuity	Option B Life Annuity with ROP
50	0	-25,00,000	-25,00,000	-25,00,000	-25,00,000
51	1	1,84,500	1,69,200	0	0
52	2	1,84,500	1,69,200	0	0
53	3	1,84,500	1,69,200	0	0
54	4	1,84,500	1,69,200	0	0
55	5	1,84,500	1,69,200	0	0
56	6	1,84,500	1,69,200	0	0
57	7	1,84,500	1,69,200	0	0
58	8	1,84,500	1,69,200	0	0
59	9	1,84,500	1,69,200	0	0
60	10	1,84,500	1,69,200	0	0
61	11	1,84,500	1,69,200	3,49,000	3,12,475
62	12	1,84,500	1,69,200	3,49,000	3,12,475
63	13	1,84,500	1,69,200	3,49,000	3,12,475
64	14	1,84,500	1,69,200	3,49,000	3,12,475
65	15	1,84,500	1,69,200	3,49,000	3,12,475
66	16	1,84,500	1,69,200	3,49,000	3,12,475
67	17	1,84,500	1,69,200	3,49,000	3,12,475
68	18	1,84,500	1,69,200	3,49,000	3,12,475
69	19	1,84,500	1,69,200	3,49,000	3,12,475
70	20	1,84,500	1,69,200	3,49,000	3,12,475
71	21	1,84,500	1,69,200	3,49,000	3,12,475
72	22	1,84,500	1,69,200	3,49,000	3,12,475
73	23	1,84,500	1,69,200	3,49,000	3,12,475
74	24	1,84,500	1,69,200	3,49,000	3,12,475
75	25	1,84,500	1,69,200	3,49,000	3,12,475
76	26	1,84,500	1,69,200	3,49,000	3,12,475
77	27	1,84,500	1,69,200	3,49,000	3,12,475
78	28	1,84,500	1,69,200	3,49,000	3,12,475
79	29	1,84,500	1,69,200	3,49,000	3,12,475
80	30	1,84,500	1,69,200	3,49,000	3,12,475
81	31	1,84,500	1,69,200	3,49,000	3,12,475
82	32	1,84,500	1,69,200	3,49,000	3,12,475
83	33	1,84,500	1,69,200	3,49,000	3,12,475
84	34	1,84,500	1,69,200	3,49,000	3,12,475
85	35	1,84,500	25,00,000	3,49,000	25,00,000

	IRR	6.59%	6.72%	5.98%	6.03%

We can infer from the above table that the IRR under any option hovers around 6 – 6.7% which is equivalent to the bank FD rate (for non-senior citizens).

The post office schemes offer better returns than this rate of return. Here one more point to be noted is that the Bajaj Allianz Life Guaranteed Pension Goal Plan locks your fund for a lifetime.

In the raising interest scenario, this is a major roadblock to your finances. You may lose other Better Investment Opportunities.

Bajaj Allianz Life Guaranteed Pension Goal Plan Vs Other Investment Avenues

Bajaj Allianz Life Guaranteed Pension Goal Plan offers mediocre returns at best. Let us look for other investment avenues where you can get a regular payout. We can consider other fixed-income securities like Senior Citizen Savings Scheme (SCSS) & RBI Floating Rate Bonds.

	Annuity	SCSS	RBI floating rate Bond
Interest Rate (As on Feb 2023)	6 – 6.7%	8%	7.35%
Tenure	Perpetual	5 years	7 years
Frequency of Pay-out	Yearly, half-yearly, quarterly, monthly	Quarterly	Half-yearly
Maximum Investment Amount	No Limit	Rs. 30 Lakhs	No Limit
Taxation	Fully Taxable	Exempt up to Rs. 50 K as Per Sec 80 TTB	Fully Taxable
Premature Withdrawal	Surrender	Allowed	Allowed (For Senior citizens)
Return on the Purchase price (Investment Amount)	Only if opted	Returned at the end of Tenure

By inferring the table, it is evident that there are other better alternate investments in terms of return & liquidity.

Especially during your retirement period, factors like;

1. - Cash flow
  - Liquidity
  - Rate of Return

Everything should be considered before investing.

So, if you consider all these factors, then the Bajaj Allianz Life Guaranteed Pension Goal wouldn’t be the right choice to be chosen as an Investment Choice in your Retirement Period.

Final Verdict of the Bajaj Allianz Life Guaranteed Pension Goal Plan

The above analysis clearly shows that the Bajaj Allianz Life Guaranteed Pension Goal Plan is a hassle-free investment. But from the Interest & liquidity perspective, it is unfit to be in your retirement portfolio.

Unforeseen medical expenses are common in old age. Moreover, the inflation rate is soaring. To combat inflation, the retirement portfolio should be well diversified.

These types of annuity plans will not diversify your portfolio & will not yield an inflation-adjusted return in the long run. The retirement corpus should be invested in a well-diversified portfolio & rebalance at regular intervals.

The pragmatic approach is investing the corpus in equity to beat inflation & invest in debt instruments for regular cash flow. After regular withdrawals from debt, it can be refilled from your equity portfolio. The corpus will outlive you in this pragmatic approach.

Bajaj Allianz Life Guaranteed Pension Goal Review (2024): Is It Worth Investing?

Table of Contents:

What is Bajaj Allianz Life Guaranteed Pension Goal Plan?

Features of the Bajaj Allianz Life Guaranteed Pension Goal Plan