Bandhan Life iInvest Ultima Plus
Can the Bandhan Life iInvest Ultima Plus Plan truly help you build long-term wealth, or do its charges and conditions limit its investment potential?
Does the Bandhan Life iInvest Ultima Plus Plan offer the right balance between market-linked growth and life protection, or are there better alternatives available?
Is the Bandhan Life iInvest Ultima Plus Plan a smart choice for achieving your financial goals, or would separating insurance and investment provide greater flexibility?
In this article, we take a closer look at the plan’s key features, potential benefits, and limitations. The analysis aims to help you understand the plan better and assess whether it fits into your long-term financial strategy.
What is the Bandhan Life iInvest Ultima Plus?
What are the features of the Bandhan Life iInvest Ultima Plus?
Who is eligible for the Bandhan Life iInvest Ultima Plus?
What are the benefits of the Bandhan Life iInvest Ultima Plus?
What are the investment Strategies and Fund Options of the Bandhan Life iInvest Ultima Plus?
What are the charges of the Bandhan Life iInvest Ultima Plus?
Grace Period, Discontinuance and Revival of the Bandhan Life iInvest Ultima Plus
Free Look Period for the Bandhan Life iInvest Ultima Plus
Surrendering the Bandhan Life iInvest Ultima Plus
What are the advantages of the Bandhan Life iInvest Ultima Plus?
What are the disadvantages of the Bandhan Life iInvest Ultima Plus?
Research Methodology of Bandhan Life iInvest Ultima Plus
Benefit Illustration – IRR Analysis of Bandhan Life iInvest Ultima Plus
Bandhan Life iInvest Ultima Plus Vs. Other Investments
Bandhan Life iInvest Ultima Plus Vs. Pure-Term + PPF/Equity Mutual Fund
Final Verdict on the Bandhan Life iInvest Ultima Plus
Bandhan Life iInvest Ultima Plus is a Unit-Linked Non-Participating Individual Life Insurance Savings Plan. It combines the power of market-linked growth with the assurance of life insurance protection.
It offers the flexibility to shape your wealth-building around your goals, while rewarding long-term commitment.
| Parameter | Minimum | Maximum |
| Entry Age | 3 months | 60 years |
| Maturity Age | 18 years | 75 years |
| Policy Term | 10 years (when the sum assured multiple is between 10 – 14) | 40 years, subject to maximum maturity age |
| 15 years (when the sum assured multiple is between 15 – 20) | ||
| Premium | Annual Mode: ₹36,000 | No limit, subject to Board-approved underwriting Policy. |
| Annual Mode: ₹18000 | ||
| Half-Yearly Mode: ₹9000 | ||
| Quarterly Mode: ₹4,500 | ||
| Monthly Mode: ₹2,250 | ||
| Premium Pay Term | Single Pay | |
| Limited Pay: 5, 7, 10, 15, 20 years | ||
| Regular Pay: Premium payment term is the same as the policy term. | ||
| Top-up Premium | ₹ 5,000 | No limit, subject to Board-approved underwriting Policy. |
| Premium Payment Mode | Monthly, Quarterly, Half-Yearly & Annual. | |
| Base Sum Assured | 10 times the Annualised Premium | 20 times the Annualised Premium, subject to Board-approved Underwriting Policy |
| Top-up Sum Assured | 1.25 times the Top-up Premium | |
In case of death of the life assured during the Bandhan Life iInvest Ultima Plus Plan policy term, provided the policy is in force as on the date of death, the company will pay the claimant the sum of base death benefit and top-up death benefit (if any), (as applicable on the date of intimation of the death of the life assured):
The base death benefit is the highest of: Base Fund Value or Base sum assured on death, where
The base sum assured on death is the highest of: Base Sum Assured and 105% of the premiums paid up to the date of death.
The top-up death benefit is the highest of the Top-Up Sum Assured and Top-Up Fund Value.
On survival of the life assured till the end of the policy term, provided all the premiums are paid and the Bandhan Life iInvest Ultima Plus Plan policy is in force, the Total Fund Value would be paid as a lump sum amount.
The policyholder will also have an option to receive the maturity benefit as a systematic payout for a maximum of five years under the settlement option
Total Fund Value = Base Fund Value + Top-up Fund Value
Return of Mortality Charges: An amount equal to total of mortality charges (including the extra mortality charges, if any) which were deducted from the fund during the Bandhan Life iInvest Ultima Plus Plan policy term will be added back to the Base Fund Value and Top-up Fund Value (if any) starting from end of 15 policy year, provided all due premiums have been received and policy is in force.
Return of Premium Allocation Charges (if applicable): An amount equal to 2.5 times the total of premium allocation charges deducted during the policy term will be added back to the Base Fund value at the end of the 15th policy year in the same proportion as the value of the total units held in each fund at the time of allocation.
Loyalty Additions: The Bandhan Life iInvest Ultima Plus Plan policyholder will receive loyalty units which will be added at the end of the 10th policy year and every 5th policy year thereafter till maturity. Loyalty units are expressed as a percentage of the average of the preceding 36 months’ fund value and will be added to the Base Fund Value on the policy anniversary
You have the option to choose from two portfolio strategies:
A. Self-Managed Portfolio Strategy
Under this portfolio strategy, you have the option to allocate your premium in any of the ten segregated funds and tailor your investment approach to meet your financial objectives.
The asset allocation under each segregated fund is provided in the table below.
You can choose one or more funds and, in any proportion (as %, in whole numbers) within the Self-managed Portfolio Strategy. You will have to specify the premium allocation in each fund chosen.
| S.no | Fund Name | Asset Allocation | Risk Profile | ||
| Equities | Fixed Interest Securities | Money Market Instruments | |||
| 1 | Blue Chip Equity Fund | 80-100% | 0% | 0-20% | High |
| 2 | Accelerator Fund | 80-100% | 0% | 0-20% | High |
| 3 | Opportunity Fund | 80-100% | 0% | 0-20% | High |
| 4 | Stable Fund | 20-80% | 20-80% | Moderate | |
| 5 | Secure Fund | 0% | 60-100% | 0-40% | Low |
| 6 | Debt Fund | 0% | 60-100% | 0-40% | Moderate |
| 7 | Flexi Cap Fund | 65-100% | 0% | 0-35% | Very High |
| 8 | Liquid Fund | 0% | 0% | 100% | Low |
| 9 | Mid Cap Fund | 80-100% | 0-20% | 0-20% | Very High |
| 10 | Multi Cap Fund | 80-100% | 0% | 0-20% | Very High |
B. Lifestyle Portfolio Strategy
The Lifestyle Portfolio Strategy addresses the same by providing you with the right mix between Equity and Debt, based on the duration of your investment.
This helps you automatically decrease your exposure to Equity and increase your exposure to Debt as your age increases and your policy nears maturity.
Under this strategy, depending on the duration of your policy, the premium paid, subject to deduction of charges, if any, will be allocated between the 3 investment funds as per a pre-defined strategy as mentioned in the table below.
| Allocation in various Funds | |||
| Years to Maturity | Secure Fund | Debt Fund | Blue Chip Equity Fund |
| 40 | 0% | 0% | 100% |
| 39 to 11 | 0% | 0% | 100% |
| 10 | 0% | 10% | 90% |
| 9 | 0% | 20% | 80% |
| 8 | 0% | 30% | 70% |
| 7 | 0% | 40% | 60% |
| 6 | 0% | 50% | 50% |
| 5 | 0% | 60% | 40% |
| 4 | 0% | 70% | 30% |
| 3 | 10% | 70% | 20% |
| 2 | 30% | 60% | 10% |
| 1 | 40% | 60% | 0% |
i. Premium Allocation Charge
| Premium Payment Frequency | 1st policy year | 2nd policy year | 3rd policy year | 4th policy year | 5th policy year | 6th year onwards |
| Annual | 12% | 4.50% | 4.50% | 4% | 4% | Nil |
| Other than Annual | 9% | 4.50% | 4.50% | 3% | 3% |
For Single Premium: 4%
For Top-up Premium: 2%
For female lives, a discount of 0.5% on the Premium Allocation Charge on the base Premium shall be applicable
ii. Fund Management Charge
| S.no | Fund Name | FMC |
| 1 | Blue Chip Equity Fund | 1% |
| 2 | Accelerator Fund | 1.10% |
| 3 | Opportunity Fund | 1.35% |
| 4 | Stable Fund | 1.35% |
| 5 | Secure Fund | 1.35% |
| 6 | Debt Fund | 1.35% |
| 7 | Flexi Cap Fund | 1.35% |
| 8 | Liquid Fund | 0.50% |
| 9 | Mid Cap Fund | 1.35% |
| 10 | Multi Cap Fund | 1.35% |
| Discontinued Fund | 0.50% |
Policy Administration Charge
| Policy Year | 01 to 05 | 06 to 10 | 21 & above |
| Regular/ Limited Pay | 0.085%p.m. | 0.20%p.m. | Nil |
| Single Pay | 0.05%p.m. | Nil | |
iii. Mortality Charge
This charge is deducted by cancellation of units at the prevailing Unit Price at the beginning of every policy month as 1/12th of the Annual Mortality Charge.
It will depend on your age and the sum at risk, which is the base death benefit in excess of the Base Fund Value
iv. Discontinuance/Surrender Charge
This charge will depend on the year in which the policy was discontinued. This charge is deducted by cancellation of Units at the prevailing Unit Price.
Inference from the charge: These charges are deducted throughout the policy term, reducing the amount actually invested and compounding the impact on wealth creation. Over the long term, even seemingly small deductions can significantly reduce the accumulated policy value and the investor’s effective returns.
Grace Period
Grace period is a period of 15 days for monthly premium payment frequency and 30 days for all other frequencies, from the due date for payment of policy premium.
Discontinuance
Discontinuance Of Premium During Lock-In Period of the Policy: transfer the Total Fund Value by creation of units into the Discontinuance Policy Fund after deducting applicable discontinuance/surrender charges. The risk cover and rider cover, if any, will terminate on the date of discontinuance. No further charges will be levied by us other than the fund management charge applicable to the Discontinuance Policy Fund. At the end of the lock-in period, the proceeds of the Discontinuance Policy Fund shall be paid to the policyholder, and the policy shall terminate.
Discontinuance Of Premium After Lock-In Period of the Policy: The Bandhan Life iInvest Ultima Plus Plan policy will be converted into a reduced paid-up policy with the paid-up sum assured, i.e. (original sum assured) multiplied by a ratio of the total period for which premiums have already been paid to the maximum period for which premiums were originally payable.
Revival
You can revive the lapsed or paid-up policy within 3 consecutive years from the due date of the first unpaid premium and before the expiry of the Bandhan Life iInvest Ultima Plus Plan policy term.
Free Look means a period of thirty (30) days from the date of receipt of the policy to review the terms and conditions of the Bandhan Life iInvest Ultima Plus Plan policy, where if you disagree with any of the terms and conditions, you have the option to return the policy stating the reasons for objection.
If the policy is surrendered during the Lock-in Period: The Total Fund Value less the Discontinuance/ Surrender Charge will be transferred to the Discontinuance Policy Fund. Proceeds of the Discontinuance Policy Fund will be payable to the policyholder as surrender value at the end of the lock-in period.
If the policy is surrendered after the completion of the Lock-in Period: The Surrender Value payable to the policyholder will be the Total Fund Value as on the date of surrender
Evaluating the potential returns of the Bandhan Life iInvest Ultima Plus Plan is important to understand whether it can effectively support an investor’s long-term financial goals.
While the plan combines life insurance with market-linked investments, the Internal Rate of Return (IRR) provides a more meaningful measure of the actual return earned on the premiums paid.
It helps investors assess the outcome without getting distracted by the projected fund value alone.
To understand this better, let us analyse an illustration from the policy brochure.
A 35-year-old male purchases the Bandhan Life iInvest Ultima Plus Plan with a sum assured of ₹25 lakh, a policy term of 25 years, and a premium-paying term of 15 years. He pays an annual premium of ₹2.5 lakh.
| Male | 35 years |
| Sum Assured | ₹ 25,00,000 |
| Policy Term | 25 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 2,50,000 |
By paying the premiums throughout the premium-paying term, he becomes eligible to receive the accumulated fund value at the end of the Bandhan Life iInvest Ultima Plus Plan policy term.
However, the 4% and 8% return scenarios shown in the illustration are not guaranteed.
They are assumed rates used for illustration and do not represent the minimum or maximum returns possible. Actual returns will depend on market performance, fund performance, and applicable charges.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 36 | 2 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 37 | 3 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 38 | 4 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 39 | 5 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 40 | 6 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 41 | 7 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 42 | 8 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 43 | 9 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 44 | 10 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 45 | 11 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 46 | 12 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 47 | 13 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 48 | 14 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 49 | 15 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 50 | 16 | 0 | 25,00,000 | 0 | 25,00,000 |
| 51 | 17 | 0 | 25,00,000 | 0 | 25,00,000 |
| 52 | 18 | 0 | 25,00,000 | 0 | 25,00,000 |
| 53 | 19 | 0 | 25,00,000 | 0 | 25,00,000 |
| 54 | 20 | 0 | 25,00,000 | 0 | 25,00,000 |
| 55 | 21 | 0 | 25,00,000 | 0 | 25,00,000 |
| 56 | 22 | 0 | 25,00,000 | 0 | 25,00,000 |
| 57 | 23 | 0 | 25,00,000 | 0 | 25,00,000 |
| 58 | 24 | 0 | 25,00,000 | 0 | 25,00,000 |
| 59 | 25 | 0 | 25,00,000 | 0 | 25,00,000 |
| 60 | 62,66,500 | 1,25,49,433 | |||
| IRR | 2.85% | 6.71% | |||
At a 4% assumed return:
At an 8% assumed return:
Investor Impact
The difference between the assumed investment return and the actual IRR is significant. Even when the underlying investment is assumed to earn 8%, the investor’s IRR is only 6.71%.
This gap reflects the impact of insurance costs, charges, and other deductions on the amount available for wealth creation.
For a market-linked product intended for long-term wealth creation, investors should assess whether the resulting net return adequately compensates them for the investment risk undertaken.
The illustration also highlights that a relatively high projected fund value does not necessarily translate into an equally attractive return on the premiums paid.
Beyond returns, the plan also needs to be assessed on the adequacy of its life cover, charges, liquidity, and transparency of the investment structure.
A sum assured of ₹25 lakh may not provide sufficient financial protection for a family with substantial income-replacement needs.
Therefore, investors should evaluate the plan not merely on its projected fund value, but on the net return, adequacy of life cover, costs, liquidity, and overall suitability for their long-term financial goals.
A key concern with ULIP products such as the Bandhan Life iInvest Ultima Plus Plan is the relationship between the investment risk undertaken and the net returns ultimately received.
The plan also provides a relatively low level of life cover compared with the premium outlay. A more transparent way to evaluate the same financial requirement is to separate insurance for protection from investment for wealth creation.
Let us consider the same parameters used in the earlier illustration. A pure-term insurance policy providing a ₹25 lakh sum assured costs an annual premium of ₹18,100 for a 20-year policy term.
Instead of paying ₹2.5 lakh annually towards the ULIP, the individual can use term insurance for protection and invest the remaining ₹2,31,900 per year separately, based on their risk appetite and investment horizon.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 25,00,000 |
| Policy Term | 25 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 18,100 |
| Investment | ₹ 2,31,900 |
| 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 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 36 | 2 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 37 | 3 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 38 | 4 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 39 | 5 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 40 | 6 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 41 | 7 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 42 | 8 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 43 | 9 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 44 | 10 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 45 | 11 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 46 | 12 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 47 | 13 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 48 | 14 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 49 | 15 | -2,50,000 | 25,00,000 | -2,50,000 | 25,00,000 |
| 50 | 16 | 0 | 25,00,000 | 0 | 25,00,000 |
| 51 | 17 | 0 | 25,00,000 | 0 | 25,00,000 |
| 52 | 18 | 0 | 25,00,000 | 0 | 25,00,000 |
| 53 | 19 | 0 | 25,00,000 | 0 | 25,00,000 |
| 54 | 20 | 0 | 25,00,000 | 0 | 25,00,000 |
| 55 | 21 | 0 | 25,00,000 | 0 | 25,00,000 |
| 56 | 22 | 0 | 25,00,000 | 0 | 25,00,000 |
| 57 | 23 | 0 | 25,00,000 | 0 | 25,00,000 |
| 58 | 24 | 0 | 25,00,000 | 0 | 25,00,000 |
| 59 | 25 | 0 | 25,00,000 | 0 | 25,00,000 |
| 60 | 1,27,10,215 | 2,71,25,299 | |||
| IRR | 6.78% | 11.00% | |||
Two alternative scenarios are illustrated below.
Pure Term + PPF
If the surplus is invested in the Public Provident Fund (PPF), the projected maturity value is ₹1.27 crore, resulting in an IRR of 6.78%.
For illustration purposes, the annual contribution considered exceeds the usual PPF contribution limit of ₹1.5 lakh. The calculation is intended only to compare the investment outcomes.
Interestingly, this projected IRR is broadly comparable to the 6.71% IRR in the ULIP’s 8% assumed-return scenario.
This illustrates that even a traditional debt-oriented investment such as PPF can produce a similar outcome in this illustration, despite the ULIP carrying market-linked investment risk.
Pure Term + Equity Mutual Fund
For an investor with a higher risk appetite and a sufficiently long investment horizon, the surplus can instead be invested in an equity mutual fund.
Under the illustration, the pre-tax maturity value is ₹3.04 crore. After considering capital gains tax, the post-tax value is ₹2.71 crore, resulting in an IRR of 11%.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 25 years | 3,04,72,628 |
| Purchase price | 35,69,000 |
| Long-Term Capital Gains | 2,69,03,628 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 2,67,78,628 |
| Tax paid on LTCG | 33,47,328 |
| Maturity value after tax | 2,71,25,299 |
This comparison illustrates the potential benefit of keeping insurance and investment separate.
The investor can choose the level of insurance required and independently select an investment avenue based on their risk appetite, goals, investment horizon, and liquidity requirements.
By separating the two, investors can potentially gain greater flexibility and transparency in managing their finances, rather than relying on a single product to fulfil both protection and wealth-creation objectives.
The Bandhan Life iInvest Ultima Plus combines market-linked investments with life insurance, offering maturity benefits based on the accumulated fund value along with loyalty additions at specified intervals.
The plan also provides for the return of certain charges at defined stages. However, the return analysis highlights a significant gap between the investment risk undertaken and the net returns generated.
Moreover, the relatively low sum assured may not provide adequate financial protection for most families and it also has a high agent commission.
A long-term investment product should ideally have the potential to generate returns that meaningfully outpace inflation and support the investor’s future financial goals.
In this case, the impact of various charges can reduce the amount available for investment and constrain long-term wealth accumulation.
If returns do not sufficiently compensate for inflation and costs, investors may find themselves with an inadequate corpus when their financial goals become due.
For investors focused primarily on long-term wealth creation, it is worth evaluating lower-cost investment alternatives separately from insurance.
Equity-oriented investments can provide greater potential for long-term growth, although they also involve market risk and are not guaranteed to outperform inflation or any particular product.
For life protection, separating insurance from investment can provide greater transparency and flexibility.
A pure-term insurance policy can be evaluated based on the actual protection required, while investments can be selected independently according to the investor’s goals, risk appetite, and time horizon.
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For a personalised investment roadmap, consulting a Certified Financial Planner can help bring these elements together into a structured strategy aligned with your financial goals, risk profile, and long-term objectives.
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