Bajaj Allianz Life Invest Protect Goal III Plan: Good or Bad? An Enlightening ULIP Review

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Can the Bajaj Allianz Life Invest Protect Goal III Plan serve as both a protection and investment solution?

Can the Bajaj Allianz Life Invest Protect Goal III Plan secure your financial future while enjoying market-linked growth?

Is Bajaj Allianz Life Invest Protect Goal III Plan enough to meet your financial aspirations in today’s dynamic world?

This article explores the features, benefits, drawbacks, and charges associated with the Bajaj Allianz Life Invest Protect Goal III Plan. It also provides insights into how a Unit Linked Insurance Plan (ULIP) works to help you make an informed decision.

What is the Bajaj Allianz Life Invest Protect Goal III?

Bajaj Allianz Life Invest Protect Goal III is a Unit-linked Non-Participating Individual Life Savings Insurance Plan.

Bajaj Allianz Life Invest Protect Goal III Plan provides life cover throughout the policy term along with market-linked returns on your invested premiums.

What are the features of the Bajaj Allianz Life Invest Protect Goal III?

Lump sum payout for your loved ones in your absence
Your savings grow into a sizeable corpus through market-linked returns
Return of Charges to help boost your fund value
Loyalty additions & Fund Maintenance Boosters enhance the maturity value.
Riders are available to provide enhanced protection
Tax benefit as per applicable laws

Who is eligible for the Bajaj Allianz Life Invest Protect Goal III?

	Minimum	Maximum
Age at Entry	18 years	60 years
Age at Maturity	38 years	100 years
Policy term	20 years	40 years
Sum assured	7Times the annualised premium 1.25 Top-up premium	As per Board approval
Premium paying term	Limited pay: 5,6,7,8,9,10,11,12	Regular pay: same as policy term

What are the benefits of the Bajaj Allianz Life Invest Protect Goal III?

1. Death benefit

On the death of the Life Assured during the Bajaj Allianz Life Invest Protect Goal III Plan policy term,

The higher of,

Prevailing Sum Assured or
Regular Premium Fund Value

PLUS

The higher of,

Top-up Premium fund value or
Top-up premium Sum Assured,

The total death benefit shall not be less than the Guaranteed Benefit of 105% of the total premiums including Top-Up premiums, if any, received up to the date of death

2. Maturity Benefit

On survival of Life Assured to the maturity date, Fund Value as on the date of Maturity, shall be payable.

3. Loyalty Advantage

Return of Premium Allocation Charge (ROAC) at the end of the 10th policy year.

Mortality charges deducted during the Bajaj Allianz Life Invest Protect Goal III Plan policy term shall be added back to your savings at the end of specific policy years. It is gradually added back based on the policy term.

4. Loyalty Addition

A specific percentage of the average of your previous Three years’ daily Regular Premium Fund Value will be added to your current fund value.

From the 4th policy year, at the start of any policy month, after premium payment (if any) and before any due charges are deducted, if your Total Fund Value falls below one Annualized Premium, then, the company shall add Fund maintenance Booster (FMB) to your Regular Premium Fund Value.

FMB = One Annualized Premium – Total Fund.

What are the Investment Strategies and Fund options in Bajaj Allianz Life Invest Protect Goal III?

At Bajaj Allianz Life Invest Protect Goal III Plan policy inception, the customer can choose any one of the below two mentioned portfolio strategies.

i.) Investor Selectable Portfolio Strategy

In this strategy, you can choose to invest your premiums in any one or more of the below-mentioned funds –

		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

The asset allocation differs across various fund options, shaping their risk profiles. Hence, choosing funds aligned with your risk tolerance is crucial.

ii.) Automatic Transfer Strategy

This strategy helps you to invest your money systematically by automatically transferring your money every month, from a low-risk Fund to the Fund(s) of your choice.

In this Portfolio Strategy, your Premium will be allocated to Bond Fund and/or Liquid Fund, as you specified.

At the start of each monthly anniversary of the Policy, a proportion (as mentioned below) of Fund value in the Bond Fund and/or Liquid Fund as on that date will be switched to the other Fund/s (available in the plan) as specified by you.

This strategy will not apply to the monthly mode of premium payment.

The proportion of Fund value = 1/ Outstanding no. of months till the next premium due date.

What are the charges of the Bajaj Allianz Life Invest Protect Goal III?

A. Mortality Charge

Mortality Charge is applied to the Sum at Risk under the Bajaj Allianz Life Invest Protect Goal III Plan policy and is deducted at the rate applicable on a monthly basis.

B. 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%

C. Policy Administration Charge

For the first five Policy Years – 1.08%. From the 6^th year to the end of the Bajaj Allianz Life Invest Protect Goal III Plan Policy Term – 4.50% p.a. of annualized Premium (capped to a maximum of Rs. 500 per month).

D. Premium Allocation Charge

The premium allocation charge is deducted from the premium amount at the time of premium payment till 5^th year. From the 6^th policy year onwards, there is no Premium Allocation Charge.

E. Miscellaneous Charge

The Miscellaneous Charge will be ₹ 100 per applicable incidence.

F. Discontinuance / Surrender Charge

Under a Regular/Limited Premium Policy, the Discontinuance Charge shall be applicable to the Regular Premium Fund Value based on the year of discontinuance and premium amount.

Inference from the charges: ULIPs often include costs that are not found in other market-linked investments, such as discontinuance fees, policy administration charges, and premium allocation fees.

These expenses act as overheads for investors and can significantly impact returns over time, reducing the overall profitability of your investment.

Grace period, Discontinuance and Revival of Bajaj Allianz Life Invest Protect Goal III

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 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 Bajaj Allianz Life Invest Protect Goal III Plan 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 Invest Protect Goal III Plan 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 Invest Protect Goal III

If the Bajaj Allianz Life Invest Protect Goal III Plan 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 Invest Protect Goal III

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 Invest Protect Goal III Plan 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 Alliance Life Invest Protect Goal III?

The Selectable Portfolio Strategy allows you to switch units between funds.
You can change your Portfolio Strategy on any policy anniversary.
The prevailing premium payment frequency can be modified during the policy anniversary.
Partial fund withdrawals are permitted after the lock-in period, starting from the 6^th policy year.
The Sum Assured can be increased on any policy anniversary.
Top-up premiums can be paid at any time during the policy term, except in the last five policy years.

What are the disadvantages of Bajaj Alliance Life Invest Protect Goal III?

The plan does not provide a loan facility.
There is no liquidity available during the first five years of the policy term.
The return of charges is less appealing as it does not account for the time value of money.
The asset allocation across fund options appears similar, making the fund choices seem redundant.

Research Methodology of Bajaj Allianz Life Invest Protect Goal III

Any market-linked product should ideally deliver returns that outpace inflation.

To evaluate the potential of the Bajaj Allianz Life Invest Protect Goal III Plan, we will assess its risk-adjusted returns and compare them with other market-linked investments.

Let’s analyse a case example from the Bajaj Allianz Life website and calculate the Internal Rate of Return (IRR).

Benefit Illustration – IRR Analysis of Bajaj Allianz Life Invest Protect Goal III

A 35-year-old male opts for the Bajaj Allianz Life Invest Protect Goal III Plan with a sum assured of ₹1 Crore, a policy term of 20 years, and an annual premium of ₹1.25 Lakhs.

Male	35 years
Sum Assured	₹ 1,00,00,000
Policy Term	20 years
Premium Paying Term	20 years
Annualised Premium	₹ 1,25,000

If he pays premiums for 20 years, he will receive the fund value at maturity. The assumed rates of return—4% and 8%—are illustrative, non-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
35	1	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
36	2	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
37	3	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
38	4	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
39	5	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
40	6	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
41	7	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
42	8	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
43	9	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
44	10	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
45	11	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
46	12	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
47	13	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
48	14	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
49	15	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
50	16	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
51	17	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
52	18	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
53	19	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
54	20	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
55		29,42,000		44,75,000

	IRR	1.53%		5.27%

At a 4% assumed return, the final fund value is ₹29.42 Lakhs, yielding an IRR of 1.53% as per the Bajaj Allianz Life Invest Protect Goal III Plan maturity calculator.

At an 8% assumed return, the final fund value is ₹44.75 Lakhs, resulting in an IRR of 5.27% as per the Bajaj Allianz Life Invest Protect Goal III Plan maturity calculator.

In both cases, the IRR is lower than returns typically offered by debt instruments. A long-term investment that fails to surpass inflation erodes wealth and hampers the accumulation process.

Therefore, the Bajaj Allianz Life Invest Protect Goal III Plan may not be the most suitable option for achieving long-term financial goals.

Bajaj Allianz Life Invest Protect Goal III vs. Other Investments

Let’s compare the Bajaj Allianz Life Invest Protect Goal III Plan with alternative investment options by separating insurance from investment. Instead of combining life coverage with investment, we shall split them and analyse the returns.

Bajaj Allianz Life Invest Protect Goal III vs. Pure-term + PPF / ELSS

You can choose a pure-term life insurance policy with a ₹1 Crore sum assured, costing ₹12,200 annually for a 20-year term. This approach saves ₹1.12 Lakhs annually compared to the earlier illustration, which can be redirected for wealth accumulation.

Pure Term Life Insurance Policy
Sum Assured	₹ 1,00,00,000
Policy Term	20 years
Premium Paying Term	20 years
Annualised Premium	₹ 12,200
Investment	₹ 1,12,800

For investment, high-risk investors can opt for equity, while low-risk investors can choose debt instruments. Let’s analyse two options: the PPF account (debt) and the ELSS fund (equity).

		Term Insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death benefit	Term Insurance premium + ELSS	Death benefit
35	1	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
36	2	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
37	3	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
38	4	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
39	5	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
40	6	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
41	7	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
42	8	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
43	9	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
44	10	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
45	11	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
46	12	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
47	13	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
48	14	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
49	15	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
50	16	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
51	17	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
52	18	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
53	19	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
54	20	-1,25,000	1,00,00,000	-1,25,000	1,00,00,000
55		50,07,033		82,62,590

	IRR	6.23%		10.39%

PPF Account: After 20 years, the maturity value is ₹50.07 Lakhs, delivering an IRR of 6.23% when paired with the pure-term life insurance policy.

ELSS Fund: Subject to capital gains tax, the pre-tax maturity value after 20 years is ₹91.02 Lakhs, reducing to ₹82.62 Lakhs post-tax. The IRR for this combination is 10.36%.

ELSS Tax Calculation
Maturity value after 20 years	91,02,817
Purchase price	22,56,000
Long-Term Capital Gains	68,46,817
Exemption limit	1,25,000
Taxable LTCG	67,21,817
Tax paid on LTCG	8,40,227
Maturity value after tax	82,62,590

Both alternatives yield returns that outpace inflation, helping accumulate wealth and achieve financial goals. In contrast, the Bajaj Allianz Life Invest Protect Goal III Plan, with lower returns, may result in a shortfall in the corpus required to meet your goals.

Final Verdict on Bajaj Allianz Life Invest Protect Goal III

The Bajaj Allianz Life Invest Protect Goal III offers life insurance coverage combined with market-linked investment opportunities.

However, the high charges associated with this plan limit its potential returns, making them less competitive than other market-linked products.

The risk involved does not justify the returns provided. Investors seeking market-linked returns through this plan typically aim for alpha generation. Unfortunately, the returns fail to outpace inflation, undermining the very purpose of market investments and it also has a high agent commission.

As a result, investing in the Bajaj Allianz Life Invest Protect Goal III plan could derail your financial goals.

A better alternative for life insurance is a pure-term policy, which offers substantial coverage at an affordable premium.

For wealth accumulation, building a diversified investment portfolio tailored to your risk tolerance and financial goals is a more effective strategy.

When it comes to financial advice, are Quora, Facebook, and Twitter the final word?

Depending on your risk appetite and time horizon, you can select suitable financial products. If you find it challenging to choose the right insurance or investment options, consulting a Certified Financial Planner is advisable.

They can help you create a personalized, goal-based financial plan to align with your needs.

Bajaj Allianz Life Invest Protect Goal III Plan: Good or Bad? An Enlightening ULIP Review

Table of Contents:

What is the Bajaj Allianz Life Invest Protect Goal III?

What are the features of the Bajaj Allianz Life Invest Protect Goal III?

Who is eligible for the Bajaj Allianz Life Invest Protect Goal III?