Bharti AXA Life Samriddhi Plan: Good or Bad? An Insightful Review
Is the Bharti AXA Life Samriddhi Plan truly a reliable path to long-term savings, or does it fall short when compared to other insurance-backed investment options?
Is the Bharti AXA Life Samriddhi Plan designed for financial security, or are there hidden limitations investors should be aware of before committing?
Can the Bharti AXA Life Samriddhi Plan balance life insurance protection and savings effectively, or would a combination of term insurance and investments work better?
In this article, we examine the Bharti AXA Life Samriddhi Plan, a traditional life insurance product, to assess its suitability for meeting long-term financial objectives.
What is the Bharti AXA Life Samriddhi?
What are the features of the Bharti AXA Life Samriddhi?
Who is eligible for the Bharti AXA Life Samriddhi?
What are the benefits of the Bharti AXA Life Samriddhi?
Grace Period, Discontinuance and Revival of the Bharti AXA Life Samriddhi
Free Look Period for the Bharti AXA Life Samriddhi
Surrendering the Bharti AXA Life Samriddhi
What are the advantages of the Bharti AXA Life Samriddhi?
What are the disadvantages of the Bharti AXA Life Samriddhi?
Research Methodology of Bharti AXA Life Samriddhi
Benefit Illustration – IRR Analysis of Bharti AXA Life Samriddhi
Bharti AXA Life Samriddhi Vs. Other Investments
Bharti AXA Life Samriddhi Vs. Pure-term + PPF/Equity Mutual Fund
Final Verdict on Bharti AXA Life Samriddhi
Bharti AXA Life Samriddhi is a Non-Linked Participating Individual Life Insurance Savings Plan.
It offers protection for your family’s financial future by providing an opportunity to participate in the profits of the participating fund of the company by way of non-guaranteed bonuses (if declared) payable to you at the time of maturity or on death.
If the Life Insured survives till the maturity of the Bharti AXA Life Samriddhi Plan Policy and all premiums are duly paid, then 100% of the Sum Assured on Maturity will be paid to the Policyholder along with accrued Non-Guaranteed Simple Annual Reversionary Bonuses (if declared) and Non-Guaranteed Terminal Bonus (if declared).
In case of the unfortunate event of death of the Life Insured during the Bharti AXA Life Samriddhi Plan Policy Term, the sum of the following benefits will be payable to the Nominee, subject to the Policy being in force.
The Basic Life insurance cover will be the higher of:
However, the death benefit payable shall never be lower than 105% of total premiums paid
Grace Period
Grace Period is 15 days for the monthly mode and 30 days for annual/ semi-annual/ quarterly premium payment modes.
Discontinuance
The Bharti AXA Life Samriddhi Plan policy acquires a surrender value after completion of the first policy year, provided one full year’s premium has been received.
If the Bharti AXA Life Samriddhi Plan Policy has not acquired a Surrender Value: In case you do not pay the premiums within your grace period, your policy will lapse, and your insurance cover will cease to exist.
You have the option to revive the policy within the period given for the revival of the policy. At the end of the revival period, if the Bharti AXA Life Samriddhi Plan policy is not revived, then the policy will be terminated, and no benefits will be payable.
If Policy has acquired a 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 due to any reason, the Bharti AXA Life Samriddhi Plan Policy will automatically be converted into Paid up, on expiry of the Grace period.
Revival
You have the flexibility to revive all the benefits under your policy within five years of the due date of the premium in default.
If the Policyholder disagrees with any of the terms and conditions of the Bharti AXA Life Samriddhi 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.
The Bharti AXA Life Samriddhi Plan policy acquires a surrender value after completion of the first policy year, provided one full year’s premium has been received.
The Special Surrender Value (SSV) shall become payable after completion of the first policy year, provided one full year’s premium has been received.
The Bharti AXA Life Samriddhi Plan policy acquires Guaranteed Surrender Value (GSV) after the payment of the premium for at least two consecutive years. The surrender benefit will be payable immediately on surrender.
Bharti AXA Life Samriddhi is a savings-cum-insurance plan where the premium is split between life cover and savings.
To objectively evaluate its investment efficiency, analysing the Internal Rate of Return (IRR) is more meaningful than reviewing cash flows alone. The following illustration helps assess the plan’s effectiveness.
Consider a 35-year-old male who chooses the Bharti AXA Life Samriddhi Plan with a sum assured of ₹6.98 lakh, a policy term of 25 years, and a premium payment term of 25 years. The annual premium payable is ₹25,000.
On maturity, the benefits comprise the accrued simple reversionary bonuses along with a terminal bonus.
| Male | 35 years |
| Sum Assured | ₹ 6,98,129 |
| Policy Term | 25 years |
| Premium Paying Term | 25 years |
| Annualised Premium | ₹ 25,000 |
Based on assumed, non-guaranteed return scenarios of 4% p.a. and 8% p.a., the outcomes are as follows:
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 36 | 2 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 37 | 3 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 38 | 4 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 39 | 5 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 40 | 6 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 41 | 7 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 42 | 8 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 43 | 9 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 44 | 10 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 45 | 11 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 46 | 12 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 47 | 13 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 48 | 14 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 49 | 15 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 50 | 16 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 51 | 17 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 52 | 18 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 53 | 19 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 54 | 20 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 55 | 21 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 56 | 22 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 57 | 23 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 58 | 24 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 59 | 25 | -25,000 | 6,98,159 | -25,000 | 6,98,159 |
| 60 | 8,70,916 | 13,79,677 | |||
| IRR | 2.46% | 5.65% | |||
At 4% return: The maturity value works out to ₹8.70 lakh, translating into an IRR of 2.46% as per the Bharti AXA Life Samriddhi Plan maturity calculator, which is even lower than the interest offered by a savings bank account.
At 8% return: The maturity value increases to ₹13.79 lakh, resulting in an IRR of 5.65% as per the Bharti AXA Life Samriddhi Plan maturity calculator,, which still falls short of typical bank fixed deposit returns.
These returns are modest and do not make the plan effective from an investment perspective for achieving meaningful financial goals. In addition, the life cover provided under the Bharti AXA Life Samriddhi Plan policy is inadequate to sufficiently protect a family’s future financial requirements.
In conclusion, both the investment potential and the insurance coverage offered by the Bharti AXA Life Samriddhi Plan are suboptimal, making it an unfavourable choice for long-term financial planning.
The projected returns from the Bharti AXA Life Samriddhi Plan are not sufficient to beat inflation.
To illustrate a more efficient alternative, consider the same parameters used in the earlier example, but with insurance and investment handled separately to evaluate the potential outcomes more effectively.
Pure-term insurance offers higher life cover at a significantly lower cost, allowing the surplus funds to be deployed into investment avenues that align with an individual’s risk profile.
Under this approach, a pure-term policy with a sum assured of ₹7 lakh requires an annual premium of ₹3,850 for both a policy term and a premium payment term of 25 years. This substantially reduces the cost of insurance.
After paying the term insurance premium, the balance amount of ₹21,150 is available for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 7,00,000 |
| Policy Term | 25 years |
| Premium Paying Term | 25 years |
| Annualised Premium | ₹ 3,850 |
| Investment | ₹ 21,150 |
| 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 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 36 | 2 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 37 | 3 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 38 | 4 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 39 | 5 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 40 | 6 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 41 | 7 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 42 | 8 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 43 | 9 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 44 | 10 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 45 | 11 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 46 | 12 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 47 | 13 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 48 | 14 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 49 | 15 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 50 | 16 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 51 | 17 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 52 | 18 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 53 | 19 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 54 | 20 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 55 | 21 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 56 | 22 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 57 | 23 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 58 | 24 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 59 | 25 | -25,000 | 7,00,000 | -25,000 | 7,00,000 |
| 60 | 14,53,430 | 28,45,330 | |||
| IRR | 6.00% | 10.32% | |||
The investment strategy can then be tailored based on risk appetite:
Risk-averse investors: Investing in debt-oriented instruments such as PPF. Assuming this option, the final maturity value in PPF is ₹14.53 lakh, translating into an IRR of approximately 6%.
High-risk investors: Investing in equity-oriented instruments such as equity mutual funds. Under this scenario, the final pre-tax maturity value is ₹31.58 lakh.
After accounting for capital gains tax, the post-tax value stands at ₹28.45 lakh, resulting in a post-tax IRR of 10.32%. The detailed tax computation is provided separately.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 25 years | 31,58,413 |
| Purchase price | 5,28,750 |
| Long-Term Capital Gains | 26,29,663 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 25,04,663 |
| Tax paid on LTCG | 3,13,083 |
| Maturity value after tax | 28,45,330 |
This comparison clearly highlights the advantage of separating insurance and investment.
Such an approach offers the potential for higher returns, better inflation protection, and greater liquidity, making it a more effective strategy for achieving long-term financial goals than the Bharti AXA Life Samriddhi Plan.
The Bharti AXA Life Samriddhi Plan is a participating endowment policy intended to provide financial protection for your family.
However, the maturity proceeds are insufficient to create a meaningful corpus. Since the benefits are dependent on bonus declarations, the achievement of long-term life goals remains uncertain.
Moreover, the sum assured under the plan is inadequate to meet even your family’s basic future financial requirements.
The combined value of maturity benefits and bonuses is unlikely to outpace inflation, rendering the plan ineffective for long-term wealth creation and it also has a high agent commission.
Selecting financial products that generate returns above the inflation rate is critical for building sustainable wealth, and investing in the Bharti AXA Life Samriddhi Plan may hinder progress toward this objective.
From a protection standpoint, a pure-term life insurance policy provides substantially higher coverage at a much lower premium, thereby offering better financial security.
By choosing a term plan, the premium savings can be channelled into investment avenues aligned with your financial goals.
Investment choices should be guided by your risk appetite, objectives, and investment horizon.
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