Bajaj Allianz Life Long-life Goal Plan Review: Good or Bad?
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?
What are the Features of Bajaj Allianz Life Long-life Goal Plan?
Who is Eligible for Bajaj Allianz Life Long-life Goal Plan?
What are the Benefits of the Bajaj Allianz Life Long-life Goal Plan?
Investment Strategies & Fund Options in Bajaj Allianz Life Long-life Goal Plan
Various Charges under the Bajaj Allianz Life Long-life Income Goal
Grace period, Discontinuance & Revival of Bajaj Allianz Life Long-life Goal Plan
Free look period of Bajaj Allianz Life Long-life Goal Plan
Surrendering Bajaj Alliance Life Long-life Income Goal
What are the Advantages of Bajaj Alliance Life Long-Life Goal Plan?
What are the Disadvantages of the Bajaj Alliance Life Long-Life Goal Plan?
Research Methodology of Bajaj Allianz Life Long-life Goal Plan
Benefit Illustration – IRR Analysis of Bajaj Allianz Life Long-life Goal Plan
Bajaj Allianz Life Long-life Goal Plan Vs Other investment products
Bajaj Allianz Life Long-Life Goal Vs. Pure Term + PPF / ELSS
Final Verdict on 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.
The Death Benefit payable will be higher of:
It will be the Fund Value as of the Maturity Date, provided the Policy is in force
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
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:
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 |
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% |
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%.
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.
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.
There is no policy administration 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% |
A miscellaneous charge of Rs. 100 per transaction will be charged.
It depends on the Annual premium amount & the year of discontinuance or surrender. There is no Discontinuance /Surrender Charge from the 5th policy year.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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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