Bajaj Allianz Life Smart Wealth Goal V – Wealth Variant: Good or Bad? An Insightful Review

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Is the Bajaj Allianz Life Smart Wealth Goal V – Wealth Variant the right choice for your financial aspirations?

Can the Bajaj Allianz Life Smart Wealth Goal V – Wealth Variant secure your financial aspirations while building wealth simultaneously?

Can the Bajaj Allianz Life Smart Wealth Goal V – Wealth Variant ensure financial protection for your loved ones and still achieve your wealth goals effortlessly?

This article delves into its features, advantages, disadvantages, and costs. By evaluating its potential returns and comparing it with alternative investment options, we aim to provide you with a comprehensive understanding to make a smarter choice.

What is the Bajaj Allianz Life Smart Wealth Goal V?

Bajaj Allianz Life Smart Wealth Goal V is a non-participating, life, individual, Unit-Linked single and limited/regular premium payment plan.

The Bajaj Allianz Life Smart Wealth Goal V plan is loaded with features like Life cover, multiple investment strategies, Return of Life Cover charge and Return of Allocation charge to make the most of your savings.

What are the features of the Bajaj Allianz Life Smart Wealth Goal V?

Option to receive Maturity Benefit or Death Benefit in instalments with Return Enhancer
Choice of 5 investment portfolio strategies and 18 Funds
Option to reduce the premium
Option to change the Premium paying term
Tax benefits may be as per prevalent tax laws

Who is eligible for the Bajaj Allianz Life Smart Wealth Goal V?

What are the benefits of the Bajaj Allianz Life Smart Wealth Goal V?

1. Maturity benefit

Provided the Policy is in-force and the Life Assured is alive, the Maturity Benefit will be the Fund value as on the date of maturity of your Bajaj Allianz Life Smart Wealth Goal V Policy.

2. Death benefit

The Death Benefit payable will be

Higher of,

Prevailing Sum Assured or
Regular Premium Fund Value/Single Premium Fund Value

plus

Higher of,

Prevailing Top-up Sum Assured or
Top up Premium Fund value, if any.

The Death Benefit payable is subject to the Guaranteed Benefit of 105% of the Total Premiums paid, till the date of death.

3. Loyalty benefits

The Loyalty Benefits available in the Bajaj Allianz Life Smart Wealth Goal V plan are as mentioned below:

Return of Premium Allocation Charge (ROAC): At the end of the 15th Policy year, the total of all the Premium Allocation charges, deducted under the Policy will be added to the Fund as Loyalty Benefit.

Fund Boosters: For Limited/Regular Premium: At the end of 10th policy year and every 5th policy year thereafter till Policy Term (maximum till 60th policy year), Fund Booster as a percentage of the Average of the daily Regular Premium Fund value during the previous 3 years (including the current year) will be added into the Fund as Loyalty Benefit.

4. Return of Mortality Charges

At the end of the Bajaj Allianz Life Smart Wealth Goal V Policy term, on the date of maturity of your Policy, 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 Fund value

What are the investment strategies and fund options in the Bajaj Allianz Life Smart Wealth Goal V?

Bajaj Allianz Life Smart Wealth Goal V provides you with five unique portfolio strategies, out of which anyone can be chosen at the inception of your Bajaj Allianz Life Smart Wealth Goal V Policy:

Investor Selectable Portfolio Strategy
Wheel of Life Portfolio Strategy II
Trigger-Based Portfolio Strategy II
Auto Transfer Portfolio Strategy
Capital Preservation-Oriented 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 to 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%

iii.) Trigger-Based Portfolio Strategy II

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%.

iv.) Auto Transfer Portfolio 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 specified by you.

At the start of each monthly anniversary of the Bajaj Allianz Life Smart Wealth Goal V 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.

v.) Capital Preservation-Oriented Strategy

The objective of the strategy is to optimize risk and return, by investing across five pre-determined Funds, which are a mix of very high to low-risk Funds, in such a way that the monies invested over the years along with the accumulated returns are subjected to lesser market volatility, in the years closer to maturity.

Under this strategy, at the commencement of the policy, the Regular Premium and the Top-Up premium, if any, would be allocated to the Funds mentioned (namely Equity Growth Fund II, Accelerator Mid-Cap Fund II, Pure Stock Fund II, Bond Fund & Liquid Fund) in the proportion as mentioned in the table below.

	Proportion in Following Funds
Years to Maturity	Equity Growth Fund II	Accelerator Mid-Cap Fund II	Pure Stock Fund II	Bond Fund	Liquid Fund	Total
10 & above	40%	15%	15%	30%	0%	100%
9	35%	15%	15%	35%	0%	100%
8	30%	15%	15%	40%	0%	100%
7	30%	15%	15%	40%	0%	100%
6	30%	10%	15%	45%	0%	100%
5	25%	10%	15%	40%	10%	100%
4	20%	5%	10%	40%	25%	100%
3	15%	0%	5%	40%	40%	100%
2	0%	0%	0%	40%	60%	100%
1	0%	0%	0%	0%	100%	100%

What are the Various Charges under the Bajaj Allianz Life Smart Wealth Goal V?

A. Premium Allocation Charge

Policy Year	1	2	3 – 5 Years	6 – PPT years
Yearly Mode	6%	6%	6%	NIL
Other Mode	5%	5%	5%	NIL
Single Premium	3%	_	_	_

B. Policy Administration Charge

Year 1 – 5	1.08% of Annualised Premium
Year 6 – 10	3% p.a. of the prevailing annualized Premium
11th year onward	NIL
Single Premium	Year 6 – 10: 0.5% p.a. of the Single Premium

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%
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 & 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.

Age (yrs)	30	35	40	45
Rs.	0.98	1.2	1.68	2.58

Inference from the charges:

The Bajaj Allianz Smart Wealth Goal V comes with high fees and lacks transparency. In contrast, alternative market-linked investment options usually offer lower, more transparent charges, making them a more appealing choice compared to Bajaj Allianz Smart Wealth Goal V.

Grace period, Discontinuance & Revival of the Bajaj Allianz Life Smart Wealth Goal V

(For Limited / Regular Premium Policies)

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 Smart Wealth Goal V 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 Bajaj Allianz Life Smart Wealth Goal V Policy.

Revival

A Bajaj Allianz Life Smart Wealth Goal V 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 Smart Wealth Goal V

If the Bajaj Allianz Life Smart Wealth Goal V policyholder disagrees with any of the terms or conditions, he has the option to return the policy within 15 days from the date of receipt of the policy document whether received electronically or otherwise.

Surrendering Bajaj Alliance Life Smart Wealth Goal V

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 Smart Wealth Goal V 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 Smart Wealth Goal V?

Partial withdrawals can be made any time after the fifth policy year.
Loyalty benefits can be taken as periodic payouts through systematic partial withdrawals.
Top-up premiums can be added at any time, except during the last five policy years.
Premium allocation can be customized using the Investor Selectable Portfolio Strategy.
Units can be switched between funds at any time (applicable under the Investor Selectable Portfolio Strategy).
You can switch between five unique portfolio strategies on any policy anniversary.
Flexibility to modify the premium payment term and frequency.
Regular/Limited Premium can be reduced after the lock-in period.
Option to lower the top sum assured.
Maturity benefits can be received in instalments over a maximum of five years.

What are the disadvantages of Bajaj Alliance Life Smart Wealth Goal V?

This Bajaj Allianz Life Smart Wealth Goal V plan does not offer a loan facility.
The fund options have similar asset allocations, making them appear redundant.
The return of charges is unappealing, as it ignores the time value of money.
The plan lacks liquidity during the first five years of the policy term.

Research Methodology of Bajaj Allianz Life Smart Wealth Goal V

Estimating the potential returns of a market-linked product is crucial before investing. Calculating the Internal Rate of Return (IRR) helps assess whether the returns can outpace inflation.

Let’s evaluate the IRR based on the benefit illustration provided in the Bajaj Allianz Life Smart Wealth Goal V policy brochure.

Benefit Illustration – IRR Analysis of Bajaj Allianz Life Smart Wealth Goal V

A 35-year-old male purchases the Bajaj Allianz Life Smart Wealth Goal V Policy – Wealth Variant with a policy term of 20 years. He pays an annual premium of ₹1 lakh for 10 years, with a sum assured of ₹10 lakhs.

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

By consistently paying premiums, he receives the return of allocation charges at the end of the 10th year and a fund booster at the end of the 15th year.

At the end of the Bajaj Allianz Life Smart Wealth Goal V policy term, he receives another fund booster, the return of mortality charges, and the maturity benefit.

		At 4% p.a.		At 8% p.a.
Age	Year	Annualised premium / Maturity benefit	Death benefit	Annualised premium / Maturity benefit	Death benefit
35	1	-1,00,000	10,00,000	-1,00,000	10,00,000
36	2	-1,00,000	10,00,000	-1,00,000	10,00,000
37	3	-1,00,000	10,00,000	-1,00,000	10,00,000
38	4	-1,00,000	10,00,000	-1,00,000	10,00,000
39	5	-1,00,000	10,00,000	-1,00,000	10,00,000
40	6	-1,00,000	10,00,000	-1,00,000	10,00,000
41	7	-1,00,000	10,00,000	-1,00,000	10,00,000
42	8	-1,00,000	10,00,000	-1,00,000	10,00,000
43	9	-1,00,000	10,00,000	-1,00,000	10,00,000
44	10	-1,00,000	10,00,000	-1,00,000	10,00,000
45	11	0	10,00,000	0	10,00,000
46	12	0	10,00,000	0	10,00,000
47	13	0	10,00,000	0	10,00,000
48	14	0	10,00,000	0	10,00,000
49	15	0	10,00,000	0	10,00,000
50	16	0	10,00,000	0	10,00,000
51	17	0	10,00,000	0	10,00,000
52	18	0	10,00,000	0	10,00,000
53	19	0	10,00,000	0	10,00,000
54	20	0	10,00,000	0	10,00,000
55		14,64,048		26,25,786

	IRR	2.47%		6.32%

The illustrated returns at 4% and 8% are not guaranteed and serve as examples rather than limits of potential performance.

At a 4% return scenario, the fund value is ₹14.64 lakhs, resulting in an IRR of 2.47% as per the Bajaj Allianz Life Smart Wealth Goal V plan maturity calculator.

At an 8% return scenario, the fund value is ₹26.25 lakhs, with an IRR of 6.32% as per the Bajaj Allianz Life Smart Wealth Goal V plan maturity calculator.

Both IRRs fall below the inflation rate, making it unlikely that the Bajaj Allianz Life Smart Wealth Goal V plan will effectively help you achieve your financial goals. This in turn affects your overall financial plan.

Bajaj Allianz Life Smart Wealth Goal V Vs. Other Investments

Let’s compare the returns of the Bajaj Allianz Life Smart Wealth Goal V with alternative investment strategies.

Using the same metrics as in the previous illustration, we’ll explore the benefits of opting for a standalone term life insurance policy and separately investing for life goals. This approach demonstrates how investing separately can yield better returns.

Bajaj Allianz Life Smart Wealth Goal V Vs. Pure-term + PPF / ELSS

A pure-term life insurance policy with a sum assured of ₹10 lakhs costs ₹8,700 annually for 20 years, with a premium-paying term of 10 years. By choosing this policy, you save ₹91,300 annually out of your ₹1 lakh budget, which can be invested based on your risk appetite.

Pure Term Life Insurance Policy
Sum Assured	₹ 10,00,000
Policy Term	20 years
Premium Paying Term	10 years
Annualised Premium	₹ 8,700
Investment	₹ 91,300

		Term Insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death benefit	Term Insurance premium + ELSS	Death benefit
35	1	-1,00,000	10,00,000	-1,00,000	10,00,000
36	2	-1,00,000	10,00,000	-1,00,000	10,00,000
37	3	-1,00,000	10,00,000	-1,00,000	10,00,000
38	4	-1,00,000	10,00,000	-1,00,000	10,00,000
39	5	-1,00,000	10,00,000	-1,00,000	10,00,000
40	6	-1,00,000	10,00,000	-1,00,000	10,00,000
41	7	-1,00,000	10,00,000	-1,00,000	10,00,000
42	8	-1,00,000	10,00,000	-1,00,000	10,00,000
43	9	-1,00,000	10,00,000	-1,00,000	10,00,000
44	10	-97,500	10,00,000	-1,00,000	10,00,000
45	11	-500	10,00,000	0	10,00,000
46	12	-500	10,00,000	0	10,00,000
47	13	-500	10,00,000	0	10,00,000
48	14	-500	10,00,000	0	10,00,000
49	15	-500	10,00,000	0	10,00,000
50	16	0	10,00,000	0	10,00,000
51	17	0	10,00,000	0	10,00,000
52	18	0	10,00,000	0	10,00,000
53	19	0	10,00,000	0	10,00,000
54	20	0	10,00,000	0	10,00,000
55		26,94,308		50,06,415

	IRR	6.49%		10.65%

For Low-Risk Investors (PPF):

Public Provident Fund (PPF) requires a minimum annual investment of ₹500 for 15 years. The saved amount is adjusted accordingly in the final few years. At maturity, the PPF corpus grows to ₹26.94 lakhs, delivering an IRR of 6.49%.

This is comparable to the 8% scenario in the Bajaj Allianz Life Smart Wealth Goal V, despite PPF being a debt investment, highlighting its competitiveness against this market-linked plan.

For High-Risk Investors (ELSS):

If the saved amount is invested in an Equity Linked Savings Scheme (ELSS), the maturity value grows to ₹55.73 lakhs. After accounting for capital gains tax, the post-tax value stands at ₹55.06 lakhs, resulting in an IRR of 10.65%.

ELSS Tax Calculation
Maturity value after 20 years	55,73,331
Purchase price	9,13,000
Long-Term Capital Gains	46,60,331
Exemption limit	1,25,000
Taxable LTCG	45,35,331
Tax paid on LTCG	5,66,916
Maturity value after tax	50,06,415

This analysis clearly demonstrates that separating insurance from investment is a superior strategy. It not only provides higher returns but also offers better liquidity compared to the Bajaj Allianz Life Smart Wealth Goal V plan.

Final Verdict on Bajaj Allianz Life Smart Wealth Goal V

The Bajaj Allianz Life Smart Wealth Goal V integrates market-linked investments with life coverage, providing features like fund boosters and the return of specific charges. However, its returns fall short compared to other market-linked products, making the risk-return balance less favourable.

Long-term investors seek returns that outpace inflation. Investing in a product that delivers below-average returns can hinder your ability to achieve financial goals.

The Bajaj Allianz Life Smart Wealth Goal V may not be an effective option for long-term wealth accumulation, potentially disrupting your overall financial plan and it also has a high agent commission.

A better approach is to opt for a standalone pure-term life insurance policy for affordable life coverage.

With the remaining surplus, invest strategically based on your financial goals, risk appetite, and investment horizon. Building a well-diversified portfolio is essential for achieving your life goals efficiently.

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

If navigating financial decisions feels overwhelming, consider consulting a Certified Financial Planner. They can create a customized financial plan tailored to your specific needs and objectives.

Bajaj Allianz Life Smart Wealth Goal V – Wealth Variant: Good or Bad? An Insightful Review

Table of Contents:

What is the Bajaj Allianz Life Smart Wealth Goal V?

What are the features of the Bajaj Allianz Life Smart Wealth Goal V?

Who is eligible for the Bajaj Allianz Life Smart Wealth Goal V?