What are the disadvantages of Bajaj Allianz Life Long-Life Goal Plan?

Bajaj Allianz Life Long-Life Goal Plan has several disadvantages, including low returns, no guaranteed income, high fees, no loan facility or top-up option, and limited investment flexibility.

What is a better alternative to Bajaj Allianz Life Long-Life Goal Plan for retirement?

A pure term life insurance policy combined with investing in PPF or ELSS is a better alternative for retirement planning. This strategy offers a lower insurance cost, potentially higher returns, and more flexibility in managing your retirement corpus.

Bajaj Allianz Life Long-life Goal Plan Review: Good or Bad?

Q: Is Bajaj Allianz Life Long-Life Goal Plan good for retirement?

Bajaj Allianz Life Long-Life Goal Plan is a long-term investment with unsatisfactory returns. Analysis shows that Bajaj Allianz Life Long-Life Goal is not beneficial for investors as the returns fall below the inflation rate.

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Is the journey of always trying to reach life goals and seeing life get better each time you achieve something like a never-ending adventure?

Yet, amidst this journey, does ensuring a consistent quality of life during retirement present a formidable challenge?

Can your retirement income cover all your post-retirement needs?

In this article review, we’ll assess the advantages and disadvantages of the Bajaj Allianz Life Long-Life Goal Plan with IRR analysis to find out its ability to provide the necessary income for your retired life.

Let us Explore!

What is the Bajaj Allianz Life Long-life Goal Plan?

Bajaj Allianz Life Long-Life Goal is a non-participating, life, individual, whole of life Unit-Linked limited premium payment endowment plan.

Bajaj Allianz Life Long-life Goal Plan invests your money in an investment portfolio selected by you and provides market-linked returns over the long term, to help you accumulate a retirement corpus.

What are the Features of Bajaj Allianz Life Long-life Goal Plan?

Whole Life Insurance Cover
Retired Life Income till age 99 years with Return Enhancer
Choice of 2 plan variants: Long-Life Goal without Waiver of Premium & Long-Life Goal with Waiver of Premium
Choice of 4 investment portfolio strategies & 15 fund options
Option to reduce premium

Who is Eligible for Bajaj Allianz Life Long-life Goal Plan?

What are the Benefits of the Bajaj Allianz Life Long-life Goal Plan?

i.) Death benefit

The Death Benefit payable will be higher of:

Prevailing Sum Assured
Fund Value
Guaranteed Death Benefit
The Death Benefit is subject to the Guaranteed Death Benefit% of 105% of the Total Premiums1 paid, till the date of death.

ii.) Maturity benefit

It will be the Fund Value as of the Maturity Date, provided the Policy is in force

iii.) Retired Life Income (RLI)

You can choose for Retired Life Income, at inception or anytime during the Bajaj Allianz Life Long-life Goal Plan Policy Term. You may decide to receive the RLI

At any Bajaj Allianz Life Long-life Goal Plan Policy Anniversary on either attaining Age 55 years or after 10 Policy Years, whichever is later

As a percentage of your Fund Value ranging from 0 to 12% per annum, as chosen by you, payable yearly, half-yearly, quarterly, or monthly

Investment Strategies & Fund Options in Bajaj Allianz Life Long-life Goal Plan

Bajaj Allianz Life Long-Life Goal provides you with four unique portfolio strategies, out of which anyone can be chosen at the inception of your Policy:

Investor Selectable Portfolio Strategy
Wheel of Life Portfolio Strategy II
Trigger Based Portfolio Strategy II
Auto Transfer Portfolio Strategy

1. Investor Selectable Portfolio Strategy of Bajaj Allianz Life Long-life Goal Plan

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 15 Funds below to suit your investment needs.

	Asset Allocation
Fund Name	Equity	Debt	Money Market	Risk profile
Equity Growth Fund II	Not less than 60%	0% – 40%	0% – 40%	Very High
Accelerator Mid-Cap Fund II	Not less than 60% (at least 50% in Mid-cap)	0% – 40%	0% – 40%	Very High
Pure Stock Fund	Not less than 60%	0% – 40%	0% – 40%	Very High
Pure Stock Fund II	Not less than 75%	—	0% -25%	Very High
Asset Allocation Fund II	40% – 90%	0% – 60%	0% – 50%	High
Blue-chip Equity Fund	Not less than 60%	0% – 40%	0% – 40%	High
Bond Fund	—	40% – 100%	0% – 60%	Moderate
Liquid Fund	—	—	100%	Low
Flexi Cap Fund	65% – 100%	0% – 35%	0% – 35%	Very High
Sustainable Equity Fund	65% – 100%	0% – 35%	0% – 35%	Very High
Small Cap Fund	65% – 100%	0% – 35%	0% – 35%	Very High
Midcap Index Fund	65% – 100%	0% – 35%	0% – 35%	Very High
Dynamic Asset Allocation Fund	10% 90%	10% 90%	0% – 80%	High
SmallCap Quality Index Fund	65% – 100%	0% – 35%	0% – 35%	Very High
Individual Short-Term Debt Fund	—	40% – 100%	0% – 60%	Moderate

2. Wheel of Life Portfolio Strategy – II of Bajaj Allianz Life Long-life Goal Plan

In this Portfolio Strategy at the commencement of the Bajaj Allianz Life Long-life Goal Plan Policy, the Regular/Limited Premium, and the Top up Premium, if any, would be allocated in the Funds mentioned (namely 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 in Following Funds
Years to Maturity	Equity Growth Fund II	Accelerator Mid-Cap Fund II	Bond Fund	Liquid Fund	Total
10 & above	40%	45%	15%	0%	100%
9	35%	50%	15%	0%	100%
8	30%	55%	15%	0%	100%
7	25%	60%	15%	0%	100%
6	25%	60%	15%	0%	100%
5	20%	65%	15%	0%	100%
4	20%	55%	15%	10%	100%
3	20%	50%	15%	15%	100%
2	10%	30%	30%	30%	100%
1	0%	0%	35%	65%	100%

3. Trigger-Based Portfolio Strategy II of Bajaj Allianz Life Long-life Goal Plan

Under this Portfolio Strategy, Regular/Limited Premiums and Top-up Premiums if any, will be allocated between two Funds, Equity Growth Fund II (an equity-oriented Fund), and Bond Fund (a debt-oriented Fund), in a 75%: 25% proportion. The Fund value proportions may subsequently get altered due to market movements.

Any appreciation over three times the value of units is considered a gain and is switched to the Liquid Fund. Later it will be switched to the Equity Growth Fund II and the Bond Fund such that, after the transfer, the ratio of the value of units in the Equity Growth Fund II to that in the Bond Fund is restored to 75%:25%.

4. Auto Transfer Portfolio Strategy of Bajaj Allianz Life Long-life Goal Plan

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 specified by you.

At the start of each monthly anniversary of the Bajaj Allianz Life Long-life Goal Plan 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.

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

Various Charges under the Bajaj Allianz Life Long-life Income Goal

A. Premium Allocation Charge

For the first 5 policy years 6% & there after 3%. For a sum assured of more than 10 Lakhs, there are no premium allocation charges.

B. Policy Administration Charge

There is no policy administration charge.

C. Fund Management Charge

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%
Bond Fund	0.95%
Liquid Fund	0.95%
Flexi Cap Fund	1.35%
Sustainable Equity Fund	1.35%
Small Cap Fund	1.35%
Midcap Index Fund	1.35%
Dynamic Asset Allocation Fund	1.35%
SmallCap Quality Index Fund	1.35%
Individual Short-Term Debt Fund	0.95%
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 & 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

The fees associated with this Bajaj Allianz Life Long-life Goal ULIP plan represent additional costs for investors. Bajaj Allianz’s Life Long-life Goal imposes substantial fees and lacks transparency.

Conversely, alternative market-related investment options usually come with minimal charges and transparent investment procedures, making them more appealing than Bajaj Allianz Life Long-Life Goal.

Grace period, Discontinuance & Revival of Bajaj Allianz Life Long-life Goal Plan

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 Long-life Goal Plan 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 Long-life Goal Plan Policy will be, immediately & automatically, converted to a Paid-up Policy. The Paid-up Sum Assured will be the Sum Assured in the Bajaj Allianz Life Long-life Goal Plan Policy multiplied by the proportion of the number of Regular Premiums paid to the number of Regular Premiums payable in the Bajaj Allianz Life Long-life Goal Plan Policy.

Revival

A Bajaj Allianz Life Long-life Goal 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 Long-life Goal Plan

If the policyholder disagrees with any of the terms or conditions, he has the option to return the Bajaj Allianz Life Long-life Goal Plan policy within 15 days from the date of receipt of the policy document and a period of 30 days in case of electronic policies and policies obtained through distance mode.

Surrendering Bajaj Alliance Life Long-life Income Goal

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 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 Long-Life Goal Plan?

Option to make partial withdrawals, any time after the fifth Policy Year
Mortality charges deducted in the Bajaj Allianz Life Long-life Goal Plan Policy, will be added back as a Periodical Return of Mortality Charge, to the Fund Value at regular intervals.
Option to take Maturity Benefit / Death benefit in installments
Loyalty Additions are added to the Fund Value as a percentage of Annualized Premium at the end of each Policy Year commencing from the end of the 5^th Policy Year.
The total amount of Waiver of Premium charges deducted in the Bajaj Allianz Life Long-life Goal Plan Policy, will be added back as a Periodical Return of Waiver of Premium Charge, to the Fund Value at regular intervals

What are the Disadvantages of the Bajaj Alliance Life Long-Life Goal Plan?

Top-up Premium option is not available under the Bajaj Allianz Life Long-life Goal Plan Policy
Regular income is not adjusted to inflation.
No loan facility is available.
The asset allocation under the fund options looks similar. So, the fund options seem repetitive.
The return on charges is not attractive, as they do not consider the time value of money.
The Bajaj Allianz Life Long-life Goal Plan does not offer any liquidity during the first five years of the policy term.

Research Methodology of Bajaj Allianz Life Long-life Goal Plan

With Bajaj Allianz Life Long-Life Goal, you make premium payments for a set number of years and then start receiving ongoing benefits for life. However, it’s crucial to evaluate the plan in percentage terms before deciding to invest in Bajaj Allianz Life Long-life Goal Plan.

While the regular income is a plus point, it doesn’t account for inflation. Let’s analyse the benefit illustration provided in the Bajaj Allianz Life Long-life Goal Plan policy brochure to understand the plan’s advantages better.

Benefit Illustration – IRR Analysis of Bajaj Allianz Life Long-life Goal Plan

A 35-year-old male has taken a Bajaj Allianz Life Long-Life Goal Policy (without Waiver of Premium). He is paying a Premium of Rs 1 lakh p.a. for a payment term of 20 years with a Sum Assured of Rs 10 Lakhs.

Rahul has also opted for the Retired Life Income option at 8% of the fund value and has chosen for the payout to be received annually.

Male	35 years
Sum Assured	₹ 10,00,000
Policy Term	65 years
Premium Paying Term	20 years
Annualised Premium	₹ 1,00,000

Once the premium-paying term concludes, the policyholder begins receiving annual income. The returns indicated at 4% and 8% are illustrative and not guaranteed and do not indicate the upper or lower limits of returns under the Policy.

The Internal Rate of Return (IRR) calculation spans 65 years. Hence, we’ve streamlined the calculations based on the Bajaj Allianz Life Long-life Goal Plan Maturity Calculator and organized the returns into a table under two different scenarios. The IRR under 4% & 8% scenario is 2.17% & 5.32% respectively.

	At 4%	At 8%
IRR	2.17%	5.32%

Relying solely on guaranteed income shouldn’t be the basis for selecting this Bajaj Allianz Life Long-life Goal Plan. The returns Bajaj Allianz Life Long-life Goal Plan offers are not favourable, and the income generated may not adequately cover post-retirement expenses. Therefore, investing in Bajaj Allianz Life Long-Life Goal is not advisable for retirement income.

Bajaj Allianz Life Long-life Goal Plan Vs Other investment products

While under the Bajaj Allianz Life Long-Life Goal, premiums are invested in the market during the accumulation phase, the final returns are not satisfactory when factoring in the income distribution phase.

Hence, let’s explore other methods to build our retirement corpus, offering us liquidity. We can then compare the returns from this alternative investment strategy with those from Bajaj Allianz Life Long-Life Goal.

Bajaj Allianz Life Long-Life Goal Vs. Pure Term + PPF / ELSS

With Bajaj Allianz’s Life Long-Life Goal, you receive lifelong coverage. However, as financial planners, we suggest opting for life coverage until retirement. A pure term life insurance policy with a sum assured of ₹20 lakhs would cost ₹5,500 annually. To facilitate comparison, we assume all metrics are similar to those in the Bajaj Allianz benefit illustration, including a premium-paying term of 20 years.

Pure Term Life Insurance Policy
Sum Assured	₹ 20,00,000
Policy Term	20 years
Premium Paying Term	20 years
Annualised Premium	₹ 5,500
Investment	₹ 94,500

Over the initial 20 years, once the pure term life insurance premium of ₹5,500 is paid annually, the remaining amount of ₹94,500 is earmarked for corpus accumulation.

We’ve considered two investment scenarios: PPF and ELSS investments. After these 20 years, the accumulated corpus is invested in a 7% return instrument. This investment allows for withdrawing the necessary annual income.

Our assumption for the distribution phase aligns with the 8% scenario of Bajaj Allianz Life Long-Life Goal. The final sum is withdrawn in full at the end of the policy term to match the maturity benefit.

The final maturity value of the PPF investment after 20 years is ₹41.94 Lakhs. Following annual withdrawals for the next 45 years from the 7% return instrument, the final investment value reaches ₹3.07 Crores. The Internal Rate of Return (IRR) for pure term life insurance and PPF stands at 6.87%.

For ELSS investment, the post-tax final maturity value after 20 years is ₹70.62 Lakhs. After annual withdrawals for the subsequent 45 years from the 7% return instrument, the final investment value reaches ₹9.09 Crores. The IRR for pure-term life insurance and ELSS is 8.17%.

	Pure Term + PPF	Pure Term + ELSS
IRR	6.87%	8.17%

This investment approach allows flexibility in utilizing the accumulated corpus as desired. Moreover, there’s room to increase income over time to counter inflation. These features are absent in Bajaj Allianz’s Life Long-Life Goal.

Final Verdict on Bajaj Allianz Life Long-life Goal Plan

Bajaj Allianz Life Long-Life Goal is a combination of ULIP and annuity plan. During the accumulation phase, the premium is invested in ULIP, and later, an annual income is disbursed from this amount. However, there is ambiguity regarding the investment approach during the distribution phase.

The annual income, paid as a percentage of the fund value, is distributed over the remaining Policy Term, subject to fund availability. The maximum allowable percentage is 12%, and you won’t receive further income if the fund value is exhausted.

Bajaj Allianz Life Long-life Goal Plan is a long-term investment with unsatisfactory returns. Analysis shows that Bajaj Allianz Life Long-Life Goal is not beneficial for investors as the returns fall below the inflation rate due to many reasons including high agent commission.

Alternatively, you can invest your surplus based on your risk appetite. As discussed in the comparison analysis, a pure-term life insurance policy until retirement is adequate. The retirement corpus will cover your post-retirement needs.

To build a robust retirement corpus, choose suitable investment options. Can you trust your finances solely to social media platforms like Quora, Twitter, and Facebook?

While social media can provide a starting point for financial information, it is not the most reliable source for making critical decisions. If you face challenges in selecting investment options, seek guidance from a Certified Financial Planner.

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Bajaj Allianz Life Long-life Goal Plan Review: Good or Bad?

Table of Contents:

What is the Bajaj Allianz Life Long-life Goal Plan?

What are the Features of Bajaj Allianz Life Long-life Goal Plan?

Who is Eligible for Bajaj Allianz Life Long-life Goal Plan?