Max Life Smart Wealth Advantage Guarantee (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.
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
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
11.) Final Verdict on the Max Life Smart Wealth Advantage Guaranteed(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.
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.
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 |
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 |
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:
Other than single pay: Death benefit shall be higher of:
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:
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.
For more details on surrendering the policy, free-look period, etc…; please refer to the Max Life Smart Wealth Advantage Guarantee (SWAG) Policy Brochure.
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.
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.
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 |
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 |
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?
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?
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.
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.
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compare this plan with icici gift pro plan
Will try to do. Thanks for the suggestion
My parents are deciding on getting a term insurance policy for me from max life insurance. The policy name is swag par plus, I am 20 years old and the broker suggested a policy up to age 60 for an annual premium of 10 lakhs, and the policy amount rounds up to 1.2 Crores. There is an annual return of around 4 lakhs and a lump-sum payment at the time of claim estimated at 3 crores. Should i go ahead with it ?
It's advisable to reconsider. While the policy offers insurance and returns, it's not purely a term insurance plan. For a 20-year-old, a basic term insurance plan offers much higher life cover at a significantly lower premium. You can get robust coverage of ₹1.2 Crores or more for a fraction of the ₹10 lakhs annual premium, allowing you to invest the remaining amount elsewhere for potentially better returns. Evaluate if a term insurance plus investment strategy aligns better with your financial goals.
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