Bharti AXA Life Guaranteed Bachat Plan : Good or Bad? An Insightful Review
Is the Bharti AXA Life Guaranteed Bachat Plan truly a reliable path to guaranteed savings, or does the guarantee come at a hidden cost to long-term returns?
Does Bharti AXA Life Guaranteed Bachat plan genuinely secure your financial future, or are there smarter alternatives that offer better flexibility and growth?
Is this Bharti AXA Life Guaranteed Bachat plan designed for disciplined wealth creation, or is it more suitable only for conservative investors seeking certainty over growth?
In this review, we critically examine the plan’s features, benefits, and limitations, supported by a detailed illustration.
What is the Bharti AXA Life Guaranteed Bachat Plan?
What are the features of the Bharti AXA Life Guaranteed Bachat Plan?
Who is eligible for the Bharti AXA Life Guaranteed Bachat Plan?
What are the benefits of the Bharti AXA Life Guaranteed Bachat Plan?
Grace Period, Discontinuance and Revival of the Bharti AXA Life Guaranteed Bachat Plan
Free Look Period for the Bharti AXA Life Guaranteed Bachat Plan
Surrendering the Bharti AXA Life Guaranteed Bachat Plan
What are the advantages of the Bharti AXA Life Guaranteed Bachat Plan?
What are the disadvantages of the Bharti AXA Life Guaranteed Bachat Plan?
Research Methodology of Bharti AXA Life Guaranteed Bachat Plan
Benefit Illustration – IRR Analysis of Bharti AXA Life Guaranteed Bachat Plan
Bharti AXA Life Guaranteed Bachat Plan Vs. Other Investments
Bharti AXA Life Guaranteed Bachat Plan Vs. Pure-term + PPF/Equity Mutual Fund
Final Verdict on Bharti AXA Life Guaranteed Bachat Plan
Bharti AXA Life Guaranteed Bachat Plan is a Non-Linked, Non-Participating Individual Savings Life Insurance Plan.
You can choose how and when you wish to receive your benefits, and customise your plan to suit your financial goals with a variety of options. You can choose to receive your guaranteed benefits as a lump sum or as a regular income stream to fund your financial goals.
Lump Sum Option
Death Benefit is the higher of:
Income Plus Option
Death Benefit is the higher of:
Death Benefit Multiple (DBM)
Lump Sum Option – 20 in year 1, linearly reducing to 11 towards the end of Policy Term
Income Plus Option – 30 in year 1, linearly reducing to 11 towards the end of Policy Term
Lump Sum Option
Maturity Benefit (payable as a lump sum) shall be the sum of:
“Guaranteed Maturity Benefit (GMB)” is defined as a fixed percentage of the Annualised Premium
Guaranteed Additions (GA) is defined as a fixed percentage applicable to GMB, which shall accrue at the end of each policy year
“Loyalty Additions (LA)” is defined as a percentage applicable to GMB, which shall accrue at the end of each policy year from the LA Start Year till the end of the Policy Term.
Income Plus Option
Maturity Benefit shall be payable as instalments as follows:
The Income Instalments shall be payable in arrears during the Income Period
The Return of Premium (ROP) benefit shall be paid along with the last Income Instalment
Grace Period
The grace period is 15 days for the monthly mode and 30 days for annual/ semi-annual/ quarterly premium payment modes.
Discontinuance
The policy acquires a surrender value after completion of the first policy year, provided one full year’s premium has been received.
If the Policy has not acquired Surrender Value: If the policyholder does not pay the due premiums within the Grace Period, the policy shall lapse with effect from the date of such unpaid premium (‘lapse date’).
You can revive the policy within the period allowed for revival of the policy. At the end of the revival period, if the policy is not revived, then the Bharti AXA Life Guaranteed Bachat Plan policy will be terminated, and no benefits will be payable.
If the Policy has acquired Surrender Value: After completion of the first policy year, provided one full year’s premium has been received, and further premiums have not been paid for any reason, the Policy will automatically be converted into Paid up, on expiry of the Grace period, and all the guaranteed benefits under the Policy will be reduced.
Revival
You have the flexibility to revive your lapsed/ paid-up policy within the revival period of five years after the due date of the first unpaid premium.
If the Policyholder disagrees with any of the terms and conditions of the Bharti AXA Life Guaranteed Bachat Plan Policy, there is an option to return the original Policy along with a letter stating the reason/s within 30 days of receipt of the Policy Document.
The policy acquires a surrender value after completion of the first policy year, provided one full year’s premium has been received.
On surrender post the Policy acquires surrender value, you will receive the higher of: Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV).
So far, we have reviewed the key features of the Bharti AXA Life Guaranteed Bachat Plan. Let us now proceed to a return analysis by calculating the Internal Rate of Return (IRR) using figures disclosed in the policy brochure.
This will be followed by a comparison with alternative investment options to support informed decision-making.
Consider a 35-year-old male who purchases the Bharti AXA Life Guaranteed Bachat Plan with a sum assured of ₹20 lakh. The policy term is 25 years, with a premium-paying term of 10 years and a deferment period of 15 years.
The annualised premium is ₹1,00,000. Under the Lump Sum plan option, the maturity benefit is payable at the end of the policy term.
| Male | 35 years |
| Sum Assured | ₹ 20,00,000 |
| Policy Term | 25 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
At maturity, the policyholder receives the following lump sum benefits:
Guaranteed Maturity Benefit: ₹10,11,510
Accrued Guaranteed Additions: ₹12,64,388
Accrued Loyalty Additions: ₹5,31,043
The total maturity value amounts to ₹28,06,940. Based on these cash flows, the IRR works out to approximately 5.11% as per the Bharti AXA Life Guaranteed Bachat Plan maturity calculator.
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -1,00,000 | 20,00,000 |
| 36 | 2 | -1,00,000 | 20,00,000 |
| 37 | 3 | -1,00,000 | 20,00,000 |
| 38 | 4 | -1,00,000 | 20,00,000 |
| 39 | 5 | -1,00,000 | 20,00,000 |
| 40 | 6 | -1,00,000 | 20,00,000 |
| 41 | 7 | -1,00,000 | 20,00,000 |
| 42 | 8 | -1,00,000 | 20,00,000 |
| 43 | 9 | -1,00,000 | 20,00,000 |
| 44 | 10 | -1,00,000 | 20,00,000 |
| 45 | 11 | 0 | 20,00,000 |
| 46 | 12 | 0 | 20,00,000 |
| 47 | 13 | 0 | 20,00,000 |
| 48 | 14 | 0 | 20,00,000 |
| 49 | 15 | 0 | 20,00,000 |
| 50 | 16 | 0 | 20,00,000 |
| 51 | 17 | 0 | 20,00,000 |
| 52 | 18 | 0 | 20,00,000 |
| 53 | 19 | 0 | 20,00,000 |
| 54 | 20 | 0 | 20,00,000 |
| 55 | 21 | 0 | 20,00,000 |
| 56 | 22 | 0 | 20,00,000 |
| 57 | 23 | 0 | 20,00,000 |
| 58 | 24 | 0 | 20,00,000 |
| 59 | 25 | 0 | 20,00,000 |
| 60 | 26 | 28,06,940 | |
| IRR | 5.11% |
This return is lower than what one could potentially earn from a bank fixed deposit. While the lump sum payout may appear attractive on the surface, the underlying return remains modest. If the Income Plus option were chosen instead, the effective return would be even lower.
Moreover, the sum assured is inadequate to provide meaningful financial protection, and the returns are not compelling from an investment standpoint.
The IRR analysis clearly indicates that the Bharti AXA Life Guaranteed Bachat Plan falls short on both fronts—insurance adequacy and investment efficiency.
The returns generated by the Bharti AXA Life Guaranteed Bachat Plan fail to keep pace with inflation. A comparison with alternative investment options using the same assumptions as the earlier illustration provides a clearer perspective.
Under the Bharti AXA Life Guaranteed Bachat Plan, the sum assured reduces linearly over the policy term. In contrast, a pure-term life insurance policy offers a constant life cover throughout the term.
For instance, a pure-term plan with a sum assured of ₹20 lakh for 25 years costs approximately ₹14,500 per annum. This results in a surplus of ₹85,500 each year, which can be invested separately based on individual risk appetite.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 20,00,000 |
| Policy Term | 25 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 14,500 |
| Investment | ₹ 85,500 |
Conservative investors may prefer low-risk instruments such as the Public Provident Fund (PPF), while investors with a higher risk tolerance may opt for equity-oriented investments such as equity mutual funds. For this comparison, both options are considered.
| 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 | 20,00,000 | -1,00,000 | 20,00,000 |
| 36 | 2 | -1,00,000 | 20,00,000 | -1,00,000 | 20,00,000 |
| 37 | 3 | -1,00,000 | 20,00,000 | -1,00,000 | 20,00,000 |
| 38 | 4 | -1,00,000 | 20,00,000 | -1,00,000 | 20,00,000 |
| 39 | 5 | -1,00,000 | 20,00,000 | -1,00,000 | 20,00,000 |
| 40 | 6 | -1,00,000 | 20,00,000 | -1,00,000 | 20,00,000 |
| 41 | 7 | -1,00,000 | 20,00,000 | -1,00,000 | 20,00,000 |
| 42 | 8 | -1,00,000 | 20,00,000 | -1,00,000 | 20,00,000 |
| 43 | 9 | -1,00,000 | 20,00,000 | -1,00,000 | 20,00,000 |
| 44 | 10 | -97,500 | 20,00,000 | -1,00,000 | 20,00,000 |
| 45 | 11 | -500 | 20,00,000 | 0 | 20,00,000 |
| 46 | 12 | -500 | 20,00,000 | 0 | 20,00,000 |
| 47 | 13 | -500 | 20,00,000 | 0 | 20,00,000 |
| 48 | 14 | -500 | 20,00,000 | 0 | 20,00,000 |
| 49 | 15 | -500 | 20,00,000 | 0 | 20,00,000 |
| 50 | 16 | 0 | 20,00,000 | 0 | 20,00,000 |
| 51 | 17 | 0 | 20,00,000 | 0 | 20,00,000 |
| 52 | 18 | 0 | 20,00,000 | 0 | 20,00,000 |
| 53 | 19 | 0 | 20,00,000 | 0 | 20,00,000 |
| 54 | 20 | 0 | 20,00,000 | 0 | 20,00,000 |
| 55 | 21 | 0 | 20,00,000 | 0 | 20,00,000 |
| 56 | 22 | 0 | 20,00,000 | 0 | 20,00,000 |
| 57 | 23 | 0 | 20,00,000 | 0 | 20,00,000 |
| 58 | 24 | 0 | 20,00,000 | 0 | 20,00,000 |
| 59 | 25 | 0 | 20,00,000 | 0 | 20,00,000 |
| 60 | 26 | 35,55,325 | 81,70,878 | ||
| IRR | 6.30% | 10.57% | |||
To comply with PPF regulations requiring a minimum contribution of ₹500 for 15 years, the investment amount was marginally adjusted in the final year. At the end of 25 years, the PPF corpus is estimated to grow to ₹35.55 lakh, translating into an IRR of 6.30%.
In comparison, an equity mutual fund investment could potentially grow to a pre-tax maturity value of ₹91.98 lakh. After accounting for capital gains tax, the post-tax maturity value would be approximately ₹81.70 lakh, resulting in a post-tax IRR of 10.57%.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 25 years | 91,98,146 |
| Purchase price | 8,55,000 |
| Long-Term Capital Gains | 83,43,146 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 82,18,146 |
| Tax paid on LTCG | 10,27,268 |
| Maturity value after tax | 81,70,878 |
In both scenarios, the returns significantly outperform those of the Bharti AXA Life Guaranteed Bachat Plan. This comparison reinforces that separating insurance and investment is a more efficient strategy for wealth creation and long-term financial growth.
The Bharti AXA Life Guaranteed Bachat Plan is a traditional life insurance product that combines protection with savings. It encourages disciplined investing and offers benefits either as a lump-sum payout or as regular income.
However, like most conventional insurance plans that bundle insurance and investment into a single product, it tends to deliver relatively low returns and it also has a high agent commission.
The same limitation applies to the Bharti AXA Life Guaranteed Bachat Plan.
The return analysis clearly demonstrates that the Bharti AXA Life Guaranteed Bachat Plan underperforms. In addition, the sum assured reduces linearly as the policy approaches maturity, thereby weakening the level of protection over time.
As a result, investing in the Bharti AXA Life Guaranteed Bachat Plan neither helps build an adequate corpus to meet future financial goals nor provides sufficient life cover.
Adequate sum assured is critical to meet a family’s essential financial needs in the event of an unforeseen loss. To address this requirement effectively, a pure-term life insurance policy is a more suitable option, as it offers a high level of coverage at a relatively low premium.
Investments for long-term life goals should be aligned with your risk appetite and the time horizon of those goals.
Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?
For selecting appropriate modern investment avenues and structuring a goal-based portfolio, it is advisable to consult a Certified Financial Planner.
Listen to this article Power looks dominant—until it fails. History is rarely decided by who…
Listen to this article Is building a retirement corpus of ₹1–2 crore really only possible…
Listen to this article Markets feel predictable—until they suddenly aren’t. At market peaks, confidence is…
Listen to this article Your salary will likely grow with time. Promotions, job switches, and…
Listen to this article Markets are falling, headlines are screaming, and uncertainty feels louder than…
Listen to this article What if the biggest mistake in your investing journey isn’t choosing…