Max Life Smart Wealth Advantage Guarantee Plan(SWAG) Review – Is It a Smart Investment Choice?

There is a plethora of Insurance Plans available in the market that offers you both – Wealth-Building and Financial Protection for your family.

Max Life offers one such plan called Max Life Smart Wealth Advantage Guarantee (SWAG) which offers a comprehensive solution.

What are the pros and cons and What are the calculated returns of the Max Life Smart Wealth Advantage Guarantee Plan(SWAG)?

In this review, we shall find out how beneficial is this plan to the investor for the long term through a detailed IRR and Comparative Analysis with illustrations.

Table of Contents:

1.)What is Max Life Smart Wealth Advantage Guarantee (SWAG) Plan?
2.)Features of the Max Life Smart Wealth Advantage Guarantee (SWAG)Plan Analysis
3.)Eligibility Criteria of the Max Life Smart Wealth Advantage Guarantee(SWAG) Plan Analysis
4.) Benefits of the Max Life Smart Wealth Advantage Guarantee (SWAG)Plan Review

• Survival Benefit
• Maturity Benefit
• Death Benefit

5.)Advantages of the Max Life Smart Wealth Advantage Guarantee (SWAG)Plan Analysis
6.)Disadvantages of Max Life Smart Wealth Advantage Guarantee (SWAG)Plan Analysis
7.) Research Methodology
8.)IRR(Internal Rate of Return i.e Interest Rate) of the Max Life Smart Wealth Advantage Guarantee (SWAG) Plan
9.) Max Life Smart Wealth Advantage Guarantee (SWAG) Plan Vs. OtherInvestment Avenues
10.) Max Life Smart Wealth Advantage Guarantee (SWAG) Plan Vs. Pure Term Insurance + PPF / ELSS

• Max Life Smart Wealth Advantage Guarantee (SWAG) Plan Vs. Max Life Guaranteed Lifetime Income Plan
• Max Life Smart Wealth Advantage Guarantee (SWAG) Plan Vs. Max Life Smart Wealth Plan
• Max Life Smart Wealth Advantage Guarantee (SWAG) Plan Vs. Other Investment Options – Review Conclusion

11.) Final Verdict on the Max Life Smart Wealth Advantage Guaranteed(SWAG) Plan

1.)What is Max Life Smart Wealth Advantage Guarantee (SWAG) Plan?

It is a Non-Linked, Non-Participating, Individual, Life Insurance, Savings Plan.

It gives enhanced protection with guaranteed return on your savings and offers a highly customizable solution to fulfill the certain as well as uncertain needs of your family. It allows you the flexibility to customize your plan to suit your convenience.

2.)Features of the Max Life Smart Wealth Advantage Guarantee (SWAG) Plan – Analysis

• • You can choose your Premium Payment Term, Income Period & Policy Term at your convenience.

• • You have the option to get income as early as the first year through their “Early Wealth” variant.

• • Save the Date option can be used to receive income on any of your special occasions.

• • There is an option to accrue your income and withdraw it anytime during your policy term after your premium payment term is over.

• • In-built accidental death benefit of 50% of the sum assured is provided to the policyholder.

• • Policy Continuance Benefit (PCB) – On the occurrence of a specified event, your survival and maturity benefits are payable as and when due without any need for premium payment to the policyholder.

• It allows the policyholder to break their maturity and death benefits and receive them in installments.

3.)Eligibility Criteria of the Max Life Smart Wealth Advantage Guarantee (SWAG) Plan – Analysis

Let us look at some of the basic information we need to know about the Max Life SWAG Plan to be eligible to enter this plan at a glance below;

		Minimum age at entry		Maximum age at entry		Maximum Maturity Age
Variant	Premium Paying term	PCB opted	PCB not opted	PCB opted	PCB not opted	PCB opted	PCB not opted
Wealth For Milestones	Single Pay	8 years	NA	1.25 X DB Multiple 65 years	NA	1.25 X DB Multiple 75 years
				10 X DB Multiple 45 years		10 X DB Multiple 55 years	NA
	5,6,8,10,12	91 days	18 years	65 years less PPT	60 years	90	85
Regular Wealth	5,6,8,10,12	91 days	18 years	65 years less PPT	60 years	85	80
Long Term Wealth	5,6,8,10,12	91 days	18 years	65 years less PPT	60 years	100	95
Early Wealth	10,12,15,20	91 days / 3 years if PPT 15 years is chosen	18 years	65 years less PPT	58 years	95	88
Lifelong Wealth	5,6,8,10,12	40 days	NA	65 years less PPT	NA	100	NA

PCB – Policy Continuance Benefit.

4.)Benefits of the Max Life Smart Wealth Advantage Guarantee (SWAG) Plan – Review

• Survival Benefit – Analysis

It is payable if the Life Insured is alive on the due date of the benefit, provided the Policy is in force

Variant	Survival benefit
Wealth For Milestones	NA
Regular Wealth	Income benefit + Loyalty Income Booster (20% of Income benefit)
Early Wealth	Income benefit
Long Term Wealth	Income benefit + Loyalty Income Booster (40% of Income benefit)
Lifelong Wealth	Income benefit + Loyalty Income Booster (40% of Income benefit) + Money back benefit payable at the age of 85 years

• Maturity Benefit – Analysis

It is payable on survival of the Life Insured on the maturity date, provided the Policy is in force.

Variant	Maturity Benefit
Wealth For Milestones	Sum Assured on Maturity + Accrued guaranteed additions
Regular Wealth	NA
Early Wealth	Sum Assured on Maturity + Accrued guaranteed additions
Long Term Wealth	Sum Assured on Maturity  – Total Premium paid
Lifelong Wealth	Sum Assured on Maturity – Total premium paid

• Death Benefit – Analysis

The below information covers the death benefit of all the Variants available in the Max Life Smart Wealth Advantage Guarantee (SWAG) Plan.

Considering PCB is not opted – Payable if the Life Insured dies during the Policy Term

Single Pay: Death Benefit shall be higher of:

• Sum Assured on Death
• 125% of Surrender Value applicable as of the date of death

Other than single pay: Death benefit shall be higher of:

• • Sum Assured on Death

• • 105% of (Total Premiums Paid plus underwriting extra premiums plus loadings for modal premiums) as on the date of death of the life insured

• • 125% of Surrender Value applicable as on the date of death Any accrued income benefit and loyalty income boosters, if not already paid shall be paid in addition to the death benefit.

Considering PCB opts

If the Life Insured dies during the Policy Term provided the Policy is in force, the Death Benefit is the sum of the Death Benefit and Policy Continuance Benefit

Death Benefit equal to higher of:

• • Sum Assured on Death

• 105% of (Total premiums paid plus underwriting extra premiums plus loadings for modal premiums) as on the date of death of the life insured

Policy Continuance Benefit: All future Survival Benefits and Maturity Benefits shall be paid to your beneficiary, as and when due in the future without any need for the premium payment. Plus, any accrued income benefit and loyalty income boosters, if not already paid shall be paid.

The plan also comes with an in-built accidental death benefit that pays an additional amount that equals 50% of the sum assured if the premium payment term is completed by the policyholder if the life insured dies due to an unfortunate accident.

5.)Advantages of the Max Life Smart Wealth Advantage Guarantee (SWAG) Plan – Analysis

• • You have the flexibility to choose the mode of pay-out to receive your Income benefit. Either you can accrue it or get it on every policy anniversary.

• • Income pay-out frequency – annually, semi-annually, quarterly, and monthly.

• • Loan option is available to meet your urgent financial requirements.

• • There are special rates for women & discounts for transgender.

• • Riders will allow you to extend your range of benefits by paying a small premium.

• • A settlement option is available for both death & maturity benefit.

6.)Disadvantages of Max Life Smart Wealth Advantage Guarantee (SWAG) Plan – Analysis

• • The Insurance Plan mainly focuses on Income benefits rather than building wealth.

• • Though the returns are guaranteed, they will not aid you in fulfilling your financial goals.

• • The sum Assured is too low.

For more details on surrendering the policy, free-look period, etc…; please refer to the Max Life Smart Wealth Advantage Guarantee (SWAG) Policy Brochure.

7.)Research Methodology of Max Life Smart Wealth Advantage Guarantee (SWAG) Plan

The above details may not help you to decide whether this plan should be in your Investment Portfolio or not.

We need some numerical validation to make the RIGHT Investment decision. So, let us find out the Internal Rate of Return of this policy.

Also, let us compare the IRR with other investment avenues to support our investment decision.

8.)IRR (Internal Rate of Return i.e Interest Rate) of the Max Life Smart Wealth Advantage Guarantee (SWAG) Plan

The Assumptions for Comparison (wealth for Milestone)

Male	35 years
Sum Assured	₹ 11,00,000
Policy Term	16 years
Premium Paying Term	8 years
Annualised Premium	₹ 1,00,000

Under the Wealth for Milestone variant, there is only a  Maturity benefit.

For the Sum Assured of Rs. 11 lakhs, Policy Term is 16 years & Premium Paying Term is 8 Years, and the Annual premium is Rs. 1 Lakh.

The following table will decipher the cash flow & IRR workings of the Max Life Smart Wealth Advantage Guarantee (SWAG) Plan.

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	0	11,00,000
44	10	0	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		15,81,090
	IRR	5.54%

From the above illustration,the IRR for Max Life SWAG – Wealth for Milestone Variant is calculated at 5.54%.

Still, the IRR doesn’t hold well to investment as the rate is far below any fixed income securitie’s rate of return.

Even if you invest in a Bank FD, the returns will be much better. Moreover, this variant pays you only lump-sum benefit. Other variants offer the income benefit that may not help you to meet any of your big-ticket expenses, like your children’s higher education or their marriage.

9.)Max Life Smart Wealth Advantage Guarantee (SWAG) Plan Vs. Other Investment Avenues

The Sum assured is too low & the IRR is also too low for the Max Life SWAG Plan.

So, let us look for other options to fulfill both our requirements i.e., Life cover & investment. We can assume a similar cash flow as in the above illustration.

The annual premium of Rs. 1 lakh can be invested in a Pure Term Insurance Policy & also for Wealth Creation Purposes.

The premium for a Pure Term Insurance Policy with a Sum assured of Rs. 11 lakh is Rs 9,000. The balance amount of Rs 91,000 can be invested either in equity or debt instrument as per your choice.

Pure Term Life Insurance Policy
Sum Assured	₹ 11,00,000
Policy Term	16 years
Premium Paying Term	5 years
Annualised Premium	₹ 9,000
Investment	₹ 91,000

10.)Max Life Smart Wealth Advantage Guarantee (SWAG) Plan Vs. Pure Term Insurance + PPF / ELSS

Based on your risk appetite, you can invest the saved premium in either a PPF (debt instrument) or an ELSS fund (equity instrument). The premium paying term for pure-term life insurance is 5 years. Whereas it is 8 years in the earlier illustration. So, in the last 3 years, the full premium can be invested.

		Term insurance + ELSS
Age	Year	Term Insurance premium + ELSS	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	0	11,00,000
44	10	0	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		28,99,541
	IRR	10.62%

The pre-tax maturity value in the ELSS fund is ₹31.88 Lakhs. After accounting for capital gains tax, the post-tax maturity value is ₹ 28.99 Lakhs. The IRR for pure-term and ELSS combo is 10.62%.

In this alternate investment strategy, you get better liquidity and inflation-beating returns, which are missing on the Max Life Smart Wealth Advantage Guarantee Plan.

ELSS Tax Calculation
Maturity value after 16 years	31,88,047
Purchase price	7,55,000
Long-Term Capital Gains	24,33,047
Exemption limit	1,25,000
Taxable LTCG	23,08,047
Tax paid on LTCG	2,88,506
Maturity value after tax	28,99,541

• Max Life Smart Wealth Advantage Guarantee (SWAG) Plan Vs. Max Life Guaranteed Lifetime Income Plan

Both the plans are Non-Linked, Non-Participating, Individual, Life Insurance, and Savings Plans.

In ‘Guaranteed Lifetime Income Plan’ Eight different annuity choices are available for you to choose from, according to your needs.

Please read the complete review below.

Max Life Guaranteed Lifetime Income Plan Review: Is It a Worthy Investment?

• Max Life Smart Wealth Advantage Guarantee (SWAG) Plan Vs. Max Life Smart Wealth Plan

Both plans are non-linked products. A non-linked product does not make stock or stock market investments.

Read the complete review below with precise calculations and illustrations of the IRR.

Max Life Smart Wealth Plan – Should You Buy It or Not?

• Max Life Smart Wealth Advantage Guarantee (SWAG) Plan Vs. Other Investment Options – Review Conclusion

After a very thorough analysis of all other alternative investment options ‘Smart Wealth Advantage Guarantee (SWAG)’ Plan.

As we have discussed earlier, after brief calculations and illustrations:

The IRR of the Max Life Smart Wealth Advantage Guarantee (SWAG) Plan doesn’t hold well due to the rate being significantly lower than the rate of return on any fixed-income securities.

You will still earn considerably better profits even if you invest in a bank FD.

Additionally, the income benefit might not assist you in covering any of your significant costs, such as your children’s college tuition or their wedding.

11.)Final Verdict on the Max Life Smart Wealth Advantage Guarantee (SWAG) Plan – Good or Bad?

The Max Life Smart Wealth Advantage Guarantee (SWAG) Plan is a traditional life insurance policy where you get the benefits either every year or at the end of the policy term. All the benefits (Maturity & Survival) are guaranteed under this plan.

Besides the guaranteed benefit, the plan may not be suitable for wealth accumulation.

Max Life Smart Wealth Advantage Guarantee (SWAG) Plan neither serves you in terms of life cover nor in terms of Investment.

But still, insurance agents are keen on selling you this Max Life Smart Wealth Advantage Guarantee (SWAG) Plan.

Have you ever wondered why? like many policies in the bazaar, this serves them high agent commission!

Alternatively, build an Investment Portfolio based on your life goals & risk appetite. Also, take a Pure Term Insurance Policy with an adequate life cover at a low-cost premium.

It is always a wise choice to keep your Insurance and Investment separate.

Are you someone who keeps searching for Insurance and Investment choices on social media platforms like Facebook, Twitter, Quora, etc?

You should consult with your Financial Advisor if you need help deciding which Insurance and Investment choice would be the RIGHT fit for your Investment Portfolio. As a professional, he would be able to provide immense guidance in customizing your Financial Plan.