Bandhan Life iGuarantee Assurance Plan: Good or Bad? A Detailed Review
Can the Bandhan Life iGuarantee Assurance Plan help you achieve your financial goals?
Can the Bandhan Life iGuarantee Assurance Plan help you stay on track with your financial plan?
Is the Bandhan Life iGuarantee Assurance Plan suitable for planning important life milestones?
Can the Bandhan Life iGuarantee Assurance Plan help you build wealth for the future?
This article takes a closer look at the plan, its features, and how it works.
More importantly, it explores how bundled insurance and investment products fit into a financial plan and whether combining these two objectives is the right strategy for long-term financial planning.
Bandhan Life iGuarantee Assurance is a Non-Linked Non–Participating, Individual Life Insurance Savings Plan.
It combines life insurance protection with guaranteed savings.
The plan provides a guaranteed maturity benefit, allowing policyholders to build a predetermined corpus while also providing financial protection during the policy term.
| Parameter | Minimum | Maximum |
| Entry Age | 0 years (3 months) | 50 years |
| Maturity Age | 18 years | 70 years |
| Policy Term | 15 or 20 | |
| Premium Paying Term | 5 or 10 | |
| Premium | Annual | ₹ 14,500 |
| Half-Yearly | ₹ 7,200 | |
| Quarterly | ₹ 3,600 | |
| Monthly | ₹ 1,200 | |
| Base Sum Assured | 11 times the annualised premium | |
| Premium Payment Frequency | Yearly, Half-yearly, Quarterly and Monthly | |
On surviving till the end of the Bandhan Life iGuarantee Assurance policy term, the Guaranteed Maturity Benefit will be paid to you in a lump sum.
Where, Guaranteed Maturity Benefit shall be equal to (Guaranteed Maturity Multiple (GMM) / 1000) X Annualised Premium.
GMM shall depend on age at entry, policy term, premium payment term, gender, sales channel and annualised premium.
In case of unfortunate demise of the Life Assured before the date of maturity, we will pay to the Nominee/claimant an amount which is the higher of Sum Assured on Death or Surrender Value as on the date of death.
Wherein, the Sum Assured on Death will be the highest of:
Insta Claim Assurance: Post completion of 3 policy years, on receipt of intimation of death, an immediate payout equal to 100% of Total Premiums Paid plus loading for modal premiums till the date of death shall be payable within 1 working day
The Grace Period is 15 days for policies under monthly premium payment frequency and 30 Days for all other frequencies from the premium due date, during which the due premium can be paid (without any interest), and the Bandhan Life iGuarantee Assurance policy is considered to be in-force with the risk cover
If at least the first full year’s premium from the date of inception of the policy has not been paid by you, the policy will automatically and immediately lapse on the date of expiry of the Grace Period.
If a lapsed policy is not reinstated during the revival period and before the expiry of the policy term, it will automatically stand terminated.
No benefit will be paid in case of a lapsed policy on death, survival or surrender.
If at least the first full year’s premium has been paid and subsequent premiums are not paid, then the policy shall not lapse.
Instead, the policy will be immediately and automatically converted to a reduced paid-up policy at the expiry of the grace period.
Once the policy is in reduced paid-up status, it is eligible for the reduced benefits.
iii. Revival
The policyholder may revive the policy within five consecutive completed years from the due date of the first unpaid premium (“Revival Period”) and before the expiry of the policy term.
If the Policyholder is not satisfied with any of the terms and conditions of the policy or otherwise and has not made any claims, the Policyholder may request the Company for cancellation of the policy within 30 days from the date of receipt of the policy document, whether received electronically or otherwise.
You can surrender the Bandhan Life iGuarantee Assurance policy at any time during the policy term after completion of the first policy year, provided one full year’s premium has been paid.
The surrender benefit payable will be the highest of the guaranteed surrender value (GSV) and special surrender value (SSV) as on the date of surrender.
Guaranteed Surrender Value (GSV) shall be payable provided 2 full years’ premiums have been paid.
Special Surrender Value (SSV) shall be payable after completion of the first policy year, provided one full year’s premium has been received from the date of inception of the policy.
The plan offers Insta Claim Assurance, under which the death benefit can be paid within one working day, subject to the applicable terms and conditions.
The policyholder can change the premium payment frequency during the premium payment term, offering greater flexibility in managing premium payments.
The plan provides a loan facility against the policy. The maximum loan amount is limited to 80% of the policy’s Surrender Value.
The sum assured offered by the plan may be insufficient to meet the family’s long-term financial needs, particularly when considering income replacement, outstanding liabilities, and future financial goals.
Although the plan provides guaranteed benefits, the returns are comparatively low when viewed against the long-term wealth creation potential of other investment avenues.
The plan does not offer loyalty additions or similar incentives for remaining invested for a longer period. As a result, policyholders do not receive any additional benefit for maintaining the policy beyond its guaranteed benefits.
The Bandhan Life iGuarantee Assurance Plan encourages disciplined saving by committing the policyholder to regular premium payments.
However, saving alone is not enough to build wealth.
The key question is whether the money saved is generating a return that can outpace inflation and support long-term financial goals.
Let us assess the potential return from the Bandhan Life iGuarantee Assurance Plan using the figures provided in the policy brochure.
Consider a 35-year-old male who opts for the plan with a Sum Assured of ₹11 lakh.
The policy has a premium-paying term of 10 years and a policy term of 20 years, with an annualised premium of ₹1 lakh.
| Male | 35 years |
| Sum Assured | ₹ 11,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
At the end of the 20-year policy term, the policyholder receives a Guaranteed Maturity Benefit of ₹20.40 lakh.
Based on the premium outflows and the maturity benefit, the Internal Rate of Return (IRR) works out to approximately 4.65% as per the Bandhan Life iGuarantee Assurance Plan maturity calculator.
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -1,00,000 | 11,00,000 |
| 36 | 2 | -1,00,000 | 11,00,000 |
| 37 | 3 | -1,00,000 | 11,00,000 |
| 38 | 4 | -1,00,000 | 11,00,000 |
| 39 | 5 | -1,00,000 | 11,00,000 |
| 40 | 6 | -1,00,000 | 11,00,000 |
| 41 | 7 | -1,00,000 | 11,00,000 |
| 42 | 8 | -1,00,000 | 11,00,000 |
| 43 | 9 | -1,00,000 | 11,00,000 |
| 44 | 10 | -1,00,000 | 11,00,000 |
| 45 | 11 | 0 | 11,00,000 |
| 46 | 12 | 0 | 11,00,000 |
| 47 | 13 | 0 | 11,00,000 |
| 48 | 14 | 0 | 11,00,000 |
| 49 | 15 | 0 | 11,00,000 |
| 50 | 16 | 0 | 11,00,000 |
| 51 | 17 | 0 | 11,00,000 |
| 52 | 18 | 0 | 11,00,000 |
| 53 | 19 | 0 | 11,00,000 |
| 54 | 20 | 0 | 11,00,000 |
| 55 | 20,40,776 | ||
| IRR | 4.65% |
While the certainty of a guaranteed maturity benefit may appear attractive, the return needs to be evaluated in the context of the long investment horizon.
An IRR of 4.65% is relatively modest and may not provide sufficient growth to preserve purchasing power after accounting for inflation.
For a long-term financial goal, the objective should not merely be to accumulate a predetermined amount but to build a corpus that grows meaningfully over time.
When the return remains modest, the opportunity cost of committing money for 20 years can also affect overall wealth accumulation.
Therefore, investors should carefully evaluate whether the Bandhan Life iGuarantee Assurance Plan can generate an adequate corpus for their specific financial goals before committing to the policy.
As part of our analysis, let us compare the Bandhan Life iGuarantee Assurance Plan with alternative investment approaches using the same illustration.
The iGuarantee Assurance Plan combines life insurance and savings in a single product.
To understand the financial impact more clearly, we can separate these two components and evaluate them independently.
For the same ₹11 lakh life cover, a pure-term insurance policy costs an annual premium of ₹8,200.
The Bandhan Life iGuarantee Assurance policy provides coverage for 20 years, with premiums payable for 10 years.
This leaves ₹91,800 from the ₹1 lakh annual outlay, which can be invested separately towards long-term financial goals.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 11,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 8,200 |
| Investment | ₹ 91,800 |
The surplus can then be invested based on the investor’s risk profile and investment horizon.
For our analysis, we consider two alternatives: Public Provident Fund (PPF) and an Equity Mutual Fund.
| Term Insurance + PPF | Term insurance + Equity Mutual Fund | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 35 | 1 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 36 | 2 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 37 | 3 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 38 | 4 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 39 | 5 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 40 | 6 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 41 | 7 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 42 | 8 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 43 | 9 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 44 | 10 | -97,500 | 11,00,000 | -1,00,000 | 11,00,000 |
| 45 | 11 | -500 | 11,00,000 | 0 | 11,00,000 |
| 46 | 12 | -500 | 11,00,000 | 0 | 11,00,000 |
| 47 | 13 | -500 | 11,00,000 | 0 | 11,00,000 |
| 48 | 14 | -500 | 11,00,000 | 0 | 11,00,000 |
| 49 | 15 | -500 | 11,00,000 | 0 | 11,00,000 |
| 50 | 16 | 0 | 11,00,000 | 0 | 11,00,000 |
| 51 | 17 | 0 | 11,00,000 | 0 | 11,00,000 |
| 52 | 18 | 0 | 11,00,000 | 0 | 11,00,000 |
| 53 | 19 | 0 | 11,00,000 | 0 | 11,00,000 |
| 54 | 20 | 0 | 11,00,000 | 0 | 11,00,000 |
| 55 | 27,09,068 | 50,33,747 | |||
| IRR | 6.53% | 10.69% | |||
PPF has a minimum investment requirement of ₹500 and a 15-year maturity period.
Since the premium payment period in our illustration is limited to 10 years, the PPF investment is adjusted in the later years to account for the minimum tenure requirement.
Under this approach, the PPF investment grows to approximately ₹27.09 lakh at maturity.
The combined IRR from the pure-term insurance and PPF strategy works out to 6.53%.
For an investor with a higher risk tolerance and a longer investment horizon, the surplus can instead be invested in an equity mutual fund.
Based on the assumptions used in our illustration, the investment grows to approximately ₹56.03 lakh.
After considering the applicable capital gains tax, the post-tax value is approximately ₹50.33 lakh, resulting in a post-tax IRR of 10.69%.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 20 years | 56,03,853 |
| Purchase price | 9,18,000 |
| Long-Term Capital Gains | 46,85,853 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 45,60,853 |
| Tax paid on LTCG | 5,70,107 |
| Maturity value after tax | 50,33,747 |
These illustrations highlight the importance of separating insurance from investment.
A pure-term policy can provide the required life protection, while the remaining funds can be invested in an avenue that matches the investor’s risk profile and time horizon.
In comparison, the Bandhan Life iGuarantee Assurance Plan combines both objectives within a single product.
However, in our illustration, the plan provides a relatively low life cover and generates an IRR of only 4.65%.
Investors should therefore evaluate whether the combination of insurance and savings within the plan is sufficient to meet both their protection needs and long-term wealth-creation objectives.
The Bandhan Life iGuarantee Assurance Plan offers guaranteed benefits, providing certainty about the amount payable at maturity.
However, for long-term financial planning, a guaranteed maturity value should not be the only factor considered.
The rate of return is equally important, particularly when the investment horizon is long and the cost of achieving financial goals is likely to increase over time due to inflation.
Our analysis of the Bandhan Life iGuarantee Assurance Plan indicates that the guaranteed benefits generate a relatively modest return.
While the certainty of the benefit may provide predictability, the return may not be sufficient to maintain purchasing power or build the corpus required for long-term financial goals and it also has a high agent commission.
Another important consideration is the plan’s combination of insurance and investment.
Endowment plans often fall short on both aspects: the life cover may be inadequate to provide meaningful financial protection, while the returns may be insufficient for effective long-term wealth creation.
Combining insurance and investment in a single product can therefore compromise both objectives.
Instead, a pure-term insurance policy can be used to provide adequate life protection, while the remaining savings can be invested separately based on the investor’s risk profile, time horizon, and financial goals.
Keeping these two objectives separate also provides greater transparency and flexibility in managing the financial plan.
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