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Does the Bharti AXA Life Vantage Plan provide adequate protection for your family’s financial security?
Can the Bharti AXA Life Vantage Plan help preserve your family’s lifestyle and standard of living?
Can the Bharti AXA Life Vantage Plan protect your family’s financial security in your absence?
Is the Bharti AXA Life Vantage Plan suitable for protecting your family’s financial future?
This article takes a closer look at the plan, its key features, and whether it adequately addresses your long-term protection needs.
Table of Contents
- What is the Bharti AXA Life Vantage Plan?
- What are the features of the Bharti AXA Life Vantage Plan?
- Who is eligible for the Bharti AXA Life Vantage Plan?
- What are the benefits of the Bharti AXA Life Vantage Plan?
- Grace Period, Discontinuance and Revival of the Bharti AXA Life Vantage Plan
- Free Look Period for the Bharti AXA Life Vantage Plan
- Surrendering the Bharti AXA Life Vantage Plan
- What are the advantages of the Bharti AXA Life Vantage Plan?
- What are the disadvantages of the Bharti AXA Life Vantage Plan?
- Research Methodology of Bharti AXA Life Vantage Plan
- Bharti AXA Life Vantage Plan Vs. Other Investments
- Final Verdict on the Bharti AXA Life Vantage Plan
1. What is the Bharti AXA Life Vantage Plan?
Bharti AXA Life Vantage Plan is a Non-Linked, Non-Participating Individual Life Insurance Plan.
The plan secures your financial goals by giving you the flexibility to choose from two options:
Variant 1: Income Advantage – where guaranteed payouts start as early as the end of the first year and a guaranteed maturity benefit at maturity;
Variant 2: Future Income – where guaranteed payouts start immediately after your premium payment term ends and a guaranteed maturity benefit at maturity.
2. What are the features of the Bharti AXA Life Vantage Plan?
- Guaranteed Benefits: Receive fully guaranteed payouts, providing certainty towards meeting your financial milestones.
- Security: Get life insurance coverage throughout the policy term to provide financial protection for your family.
- Flexibility: Choose between two plan variants and customise the premium payment term, policy term, and death benefit multiple based on your needs.
- Financial Control: Select the Guaranteed Income factor to align the policy benefits with your desired income requirements.
- Flexi Wallet: Accumulate your guaranteed income in the built-in Flexi Wallet and withdraw it when required, offering greater flexibility in managing your cash flows.
- Tax Benefits: Avail tax benefits as applicable under prevailing tax laws, subject to amendments from time to time.
- Rider Benefits: Enhance your insurance protection by adding optional riders at an additional premium.
3. Who is eligible for the Bharti AXA Life Vantage Plan?
| Parameter | Income Advantage | Future Income |
| Minimum Age at Entry (in years) | DBM 7 & 11: 0 (91 days)DBM 5: 50 | |
| Maximum Age at Entry (in years) | DBM 5, 7 & 11: 60 | |
| Premium Payment Term & Policy Term (in years) | PPT | PT |
| 5 | 15, 20, 25, 30 | |
| 7 | 15, 20, 25, 30 | |
| 10 | 15, 20, 25, 30, 35, 40 | |
| 12 | 15, 20, 25, 30, 35, 40, 45 | |
| Minimum Maturity Age# | 18 | |
| Maximum Maturity Age# | 75 | |
| Minimum Annualised Premium | Rs. 22,000 | |
| Maximum Annualised Premium | No Limit, subject to Board-approved Underwriting Policy | |
| Minimum Sum Assured | Rs. 1,10,000 | |
| Maximum Sum Assured | No limit; shall be subject to Board-approved Underwriting Policy. | |
| Premium Payment Modes | Annual, Semi-annual, Quarterly, Monthly | |
| Income Frequency | Annual, Semi-annual, Quarterly, Monthly | |
4. What are the benefits of the Bharti AXA Life Vantage Plan?
Survival Benefit
Income Advantage Plan
On survival of the Life Insured during the Bharti AXA Life Vantage policy term, provided all premiums due till date are paid, Guaranteed Income (as chosen by you) shall be payable at the end of each policy year starting from the first policy year till the maturity date.
Where, Guaranteed Income shall be equal to Guaranteed Income Factor multiplied by the Annualised Premium multiplied by the Income Modal Factor.
Future Income Plan
On survival of the Life Insured during the policy term, provided all premiums due till date are paid, Guaranteed Income shall be payable at the end of each policy year starting from the policy year immediately following the end of PPT till the maturity date.
Where, Guaranteed Income shall be equal to Guaranteed Income Factor multiplied by the Annualised Premium multiplied by the Income Modal Factor.
Death Benefit
For Both Income Advantage Plan and Future Income Plan
Upon death of the Life Insured during the policy term, provided the Bharti AXA Life Vantage policy is in force and all due premiums till the date of death have been paid, Death Benefit shall be payable in lump sum.
In case of death after the end of the Policy Term, no death benefit is payable.
Death Benefit payable is as follows: Death Benefit shall be the higher of:
- Sum Assured on Death
- 105% of the Total Premiums Paid till date of death
- Surrender Value applicable at the time of Death.
Sum Assured on Death shall be equal to the Death Benefit Multiple (DBM) multiplied by the Annualised Premium.
Maturity Benefit
For Both Income Advantage Plan and Future Income Plan
On survival of the Life Insured till the maturity date, provided all premiums due are paid, Guaranteed Maturity Benefit is payable as a lump sum on the maturity date.
Where, Guaranteed Maturity Benefit = Guaranteed Maturity Benefit Factor X Total Premiums Paid (excluding modal loadings, if any).
Any unpaid benefit shall be paid along with the maturity benefit.
5. Grace Period, Discontinuance and Revival of the Bharti AXA Life Vantage Plan
Grace Period
The grace period is 30 days from the premium due date for all premium modes except monthly mode and 15 days from the premium due date for monthly mode.
Discontinuance
Lapse: If the Bharti AXA Life Vantage Policy has not acquired Surrender Value and 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’).
If a policy in lapsed status is not revived within the revival period, the policy shall be terminated, and no benefits shall be payable.
Paid-up: After completion of the first policy year, provided one full year premium has been received, and further premiums have not been paid for any reason, the policy shall be automatically converted into paid-up.
Once the policy becomes paid-up, all the benefits under the policy shall 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.
6. Free Look Period for the Bharti AXA Life Vantage Plan
If the Policyholder disagrees with any of the terms and conditions of the Policy, there is an option to return the original Policy along with a letter stating reason/s within 30 days of receipt of the Policy Document.
The Bharti AXA Life Vantage Policy will accordingly be cancelled.
7. Surrendering the Bharti AXA Life Vantage Plan
The policy acquires a surrender value after completion of the first policy year, provided one full year’s premium has been received.
The policy acquires GSV after the payment of premium for at least two consecutive years. The SSV shall become payable after completion of the first policy year, provided one full year’s premium has been received.
The surrender benefit will be payable immediately on surrender during the policy term.
On Surrender of the policy, the higher of
- Guaranteed Surrender Value (GSV)
- Special Surrender Value (SSV)
8. What are the advantages of the Bharti AXA Life Vantage Plan?
- Flexi Wallet: At the time of policy inception or during the policy term, you can choose to accumulate your survival benefits in the Flexi Wallet and access them as required.
- Loan Facility: A loan can be availed against the policy, subject to the applicable terms and conditions.
- Choice of Plan Variant: Based on your cash-flow requirements, you can choose between two plan variants designed to suit different income needs.
9. What are the disadvantages of the Bharti AXA Life Vantage Plan?
- Risk of Unnecessary Spending: Regular annual income benefits may encourage discretionary or impulsive spending, potentially affecting financial discipline.
- Inadequate Life Cover: The sum assured may not be sufficient to meet your family’s essential financial needs and long-term obligations.
- Relatively Low Returns: The returns from the plan may be relatively low compared with other investment avenues available for wealth creation.
- Impact on Compounding: Regular income payouts reduce the amount that remains invested, which can limit the benefit of compounding and potentially affect long-term wealth creation.
10. Research Methodology of Bharti AXA Life Vantage Plan
Under the Bharti AXA Life Vantage Plan, survival benefits may begin either from the first year or after the completion of the premium-paying term, depending on the chosen variant.
The plan also provides a final maturity benefit at the end of the policy term. While these benefits are guaranteed, the key question is whether the returns justify the investment.
The Internal Rate of Return (IRR) provides a useful measure to assess the actual return generated by the policy.
Let us consider an illustration from the sales brochure.
Benefit Illustration – IRR Analysis of Bharti AXA Life Vantage Plan
Consider a 35-year-old male who pays an annual premium of ₹1,00,000 for 10 years under a 25-year policy term.
He chooses the Future Income Variant.
At the end of the policy term, he receives a guaranteed annual income of ₹74,475 for 10 years, along with a final maturity benefit of ₹15 lakh.
| Male | 35 years |
| Sum Assured | ₹ 11,00,000 |
| Policy Term | 25 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
| 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 | 74,475 | 11,00,000 |
| 47 | 13 | 74,475 | 11,00,000 |
| 48 | 14 | 74,475 | 11,00,000 |
| 49 | 15 | 74,475 | 11,00,000 |
| 50 | 16 | 74,475 | 11,00,000 |
| 51 | 17 | 74,475 | 11,00,000 |
| 52 | 18 | 74,475 | 11,00,000 |
| 53 | 19 | 74,475 | 11,00,000 |
| 54 | 20 | 74,475 | 11,00,000 |
| 55 | 21 | 74,475 | 11,00,000 |
| 56 | 22 | 74,475 | 11,00,000 |
| 57 | 23 | 74,475 | 11,00,000 |
| 58 | 24 | 74,475 | 11,00,000 |
| 59 | 25 | 74,475 | 11,00,000 |
| 60 | 15,74,475 | ||
| IRR | 5.78% |
Based on these cash flows, the IRR works out to approximately 5.78% as per the Bharti AXA Life Vantage Plan maturity calculator.
Although the benefits are guaranteed, the return is modest and may not be competitive with other relatively conservative debt-oriented investment options.
Moreover, receiving regular income payouts reduces the amount that remains invested, limiting the potential benefit of compounding and long-term wealth creation.
The level of life cover also needs careful consideration, as it may not provide adequate financial protection for the family’s long-term needs.
Overall, the Bharti AXA Life Vantage Plan may provide predictable and guaranteed cash flows, but its relatively modest returns, limited compounding potential, and potentially inadequate life cover make it less suitable for investors whose primary objective is substantial long-term wealth creation and comprehensive financial protection.
11. Bharti AXA Life Vantage Plan Vs. Other Investments
While the Bharti AXA Life Vantage Plan offers guaranteed benefits, its returns may not keep pace with inflation over the long term.
With relatively low insurance coverage and modest returns, the plan may not be efficient as either a wealth-creation or protection solution.
Your hard-earned money may be deployed more effectively through separate insurance and investment strategies aligned with your financial goals.
Bharti AXA Life Vantage Plan Vs. Pure-term + Equity Mutual Fund
For life insurance, a pure-term policy can provide a higher level of protection at a significantly lower premium.
In the same scenario discussed earlier, a 35-year-old male can obtain a pure-term cover of ₹11 lakh for an annual premium of ₹10,800 over a 10-year premium-paying period.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 11,00,000 |
| Policy Term | 25 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 10,800 |
| Investment | ₹ 89,200 |
This is only a fraction of the ₹1 lakh annual premium payable under the Bharti AXA Life Vantage Plan.
The remaining ₹89,200 each year can instead be directed towards wealth creation.
Risk-averse investors may consider debt-oriented options such as PPF, while investors seeking higher long-term growth may consider equity-oriented options such as equity mutual funds.
| Age | Year | Term Insurance premium + Equity Mutual Fund | 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 | 74,475 | 11,00,000 |
| 47 | 13 | 74,475 | 11,00,000 |
| 48 | 14 | 74,475 | 11,00,000 |
| 49 | 15 | 74,475 | 11,00,000 |
| 50 | 16 | 74,475 | 11,00,000 |
| 51 | 17 | 74,475 | 11,00,000 |
| 52 | 18 | 74,475 | 11,00,000 |
| 53 | 19 | 74,475 | 11,00,000 |
| 54 | 20 | 74,475 | 11,00,000 |
| 55 | 21 | 74,475 | 11,00,000 |
| 56 | 22 | 74,475 | 11,00,000 |
| 57 | 23 | 74,475 | 11,00,000 |
| 58 | 24 | 74,475 | 11,00,000 |
| 59 | 25 | 74,475 | 11,00,000 |
| 60 | 27,86,198 | ||
| IRR | 7.71% |
Consider the equity mutual fund approach.
Assuming an annual return of 12%, the investment of ₹89,200 per year could grow to approximately ₹17.53 lakh after 10 years.
After accounting for capital gains tax, the corpus would be approximately ₹16.61 lakh.
This corpus can then be invested in an instrument generating 7% per annum to support regular withdrawals while retaining a residual corpus.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 10 years | 17,53,189 |
| Purchase price | 8,92,000 |
| Long-Term Capital Gains | 8,61,189 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 7,36,189 |
| Tax paid on LTCG | 92,024 |
| Maturity value after tax | 16,61,165 |
Under this approach, an annual income of ₹74,475 can be generated while still leaving a final corpus of approximately ₹27.86 lakh in the last year.
The resulting IRR works out to around 7.71%, compared with 5.78% for the Bharti AXA Life Vantage Plan in the illustration considered earlier.
Beyond the difference in returns, separating insurance and investments provides greater liquidity and flexibility.
You can choose the level of life cover independently and select investment options based on your risk appetite, financial goals, and investment horizon.
In conclusion, if your objective is to create long-term wealth while ensuring adequate life protection, separating the two requirements can offer greater flexibility and transparency than a bundled insurance-and-investment plan.
A pure-term policy can address the protection requirement, while the balance can be invested separately based on your financial goals and risk profile.
12. Final Verdict on the Bharti AXA Life Vantage Plan
The Bharti AXA Life Vantage Plan channels your premium payments towards future income payouts.
Although you pay premiums for a limited period, the plan provides income either from the first policy year or after completion of the premium-paying term, depending on the chosen variant, and continues these payouts until the end of the policy term, along with a final lump-sum maturity benefit.
However, these fixed payouts are not adjusted for inflation and may lose their purchasing power over time, potentially making them inadequate to meet major future expenses.
The sum assured is also relatively modest and may not be sufficient to address your family’s long-term financial needs.
Further, the life cover does not continue throughout the income payout period.
Another significant drawback is the impact of regular annual payouts on compounding.
Since the money is paid out instead of remaining invested, the potential for long-term capital growth is reduced.
Consequently, the plan may generate relatively modest returns over a long investment horizon.
When this is combined with limited life cover, the plan may not adequately address either long-term wealth creation or comprehensive financial protection and it also has a high agent commission.
Traditional insurance plans such as this attempt to combine insurance and investment within a single product.
However, separating these two objectives can provide greater flexibility in addressing each requirement.
A pure-term life insurance policy can be used to obtain adequate protection at a relatively lower cost, while wealth creation can be pursued through investment avenues suited to your risk profile, financial goals, and investment horizon, such as mutual funds, PPF, or other diversified instruments.
Rather than relying solely on an insurance-linked income plan, building a diversified investment portfolio can provide greater flexibility, liquidity, and potential for long-term growth.
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