There are times when we can take risks—usually when we are young. And there are times when we need to play it safe—as we get older. So why not do the same when we are investing money!
That’s what those managing Bajaj Allianz Assured Protection Insurance Plan promise to do for you. In the early years of the policy, they will put more of your money in equity-heavy funds but over time shift it to debt (read) based funds.
The company calls it “Wheel of Life Portfolio Strategy”. Here is table that shows how your investments will get allocated/reallocated as years go by:
|Years to Maturity||Proportion in following three Funds (%)||Bond Fund (%)||Liquid Fund
|Blue-chip Equity Fund||Equity Growth Fund 2||Accelerator Mid-Cap Fund 2||Total|
So, initially all the money will be invested in equity-based funds. Then, from the fifth year onwards (in case of 20-year policy term), some of the money will be shifted to debt fund and the proportionate allocation for debt fund will increase. By the 16th year, all the funds will be moved to safe instruments. (If you have trouble reconciling what we are saying and what the table shows—we too were stumped at first sight—then just remember, that figure of 20 in Years to Maturity column is the first year of the policy term!)
All of the above if you let them manage your money. Else, the policy also allows you to choose which funds you wish to invest in and switch funds during the term.
Bajaj Allianz APIP is somewhat similar to the Wealth Insurance Plan in many aspects but differs in one crucial aspect: The latter is a Whole Life Plan which locks your funds till you get to 75 years in age but APIP comes with shorter policy terms of 10, 15 or 20 years.
The other interesting bit is that the plan can be used as a sort of Child Plan—if child is a nominee then partial withdrawls are allowed only after she reaches the age of 18.
Ø A settlement option that lets you pull out your maturity proceeds in installments/tranches over the next—to end of your policy term—five years. This pull out can be yearly, half yearly, quarterly or monthly as decided by you.
Ø Maturity Benefit – Upon the maturity of your policy, the policyholder receives the Fund Value as on the maturity date.
Ø Surrender Benefit – This policy allows a policyholder to opt out of the policy anytime after the 5th year. The Surrender Value in that case would be equal to the Fund Value as on the date of surrender of the policy.
Ø Additional Sum assured in case of accidental death: If the insured person’s death occurs after attainment of 7 years, an additional benefit equal to the prevailing regular premium sum assured shall be payable.
Ø Automatic annual increase in sum assured from 6th policy anniversary onwards.
Ø Flexibility of
Ø Optional Riders for the benefit of the policyholder.
Having gone through the key benefits of Bajaj Allianz Assured Protection Insurance policy, let’s now examine its various aspects in detail.
|Minimum Entry Age||1 years (18 years in case of Additional Rider Benefits)|
|Maximum Entry Age||60 years ( 50 years in case of Additional Rider Benefits)|
|Minimum Age at Maturity||18 years|
|Maximum Age at Maturity||75 years ( Additional Rider Benefits ceasing at Age 65 years)|
|Policy Term||10,15 and 20 years|
|Minimum Regular Premium||Rs 15,000 per yearly installment|
|Maximum Regular Premium||Rs 24,000 per yearly installment|
|Minimum Premium Paying Term||7 years|
|Maximum Premium Paying Term||Policy Term|
|Minimum Top Up Premium||Rs 5000|
|Maximum Top Up Premium||No Limit|
|Premium Payment Frequency||Annual mode only|
|Minimum Sum Assured||10 times Annualized Premium for entry age below 45 years.
7 times Annualized Premium for entry age 45 years and above.
|Maximum Sum Assured||Policy Term times Annualized Premium, if any rider has been opted then maximum sum assured shall be same as the minimum sum assured.|
Investment Options (Funds)
This unit-linked policy gives you the following array of 7 investment options (funds), each having a varied proportion of equity and debt, for you to choose from (based on your risk appetite and expectations of returns) –
|Fund name||Asset classes invested in (as a % of overall fund portfolio)|
|Bank Deposits & Money Market Instruments||Equities||Government Securitiess, Bonds, Fixed Deposits|
|Pure Stock Fund (shuns unethical sectors like gambling)||0-40%||60-100%|
|Bluechip Equity Fund (invests in NSE NIFTY-listed stocks, seeking to replicate returns registered by the benchmark index)||0-40%||60-100%|
|Equity Growth Fund II (investment in specific equity stocks having high growth potential)||0-40%||60-100%|
|Bond Fund (invests in high-quality fixed income securities)||0-100%||0-100%|
|Liquid Fund (invests in liquid money market and short-term instruments)||0-100%|
|Accelerator Mid-Cap Fund II (invests in a diversified pool of mid-cap and large-cap stocks, with at least 50% of equities exposure to mid-cap companies)||0-40%||60-100%|
|Asset Allocation Fund (allocates assets across equities, bonds and cash to build a balanced portfolio)||0-100%||0-100%||0-100%|
Test case for investment returns –
Age – 30 Years; Policy term – 10 years; Annual Premium – Rs. 15,000; Sum Assured – Rs 150,000
|Fund name||Fund track record (rate of returns delivered till date from inception)||Projected Maturity Benefit (based on fund track record till date; no guarantee, however) (in Rs.)|
|Pure Stock Fund||23.24%||357,493|
|Bluechip Equity Fund||-26.59%||- 112,800|
|Equity Growth Fund II||14.41%||157,098|
|Accelerator Mid-Cap Fund II||9.10%||77,662|
|Asset Allocation Fund||8.86%||74,623|
Premium Apportionment –
The policy holder is entitled to making any number of partial withdrawals he wants, anytime after the fifth policy year–conditional upon several factors, a few of which are shortlisted below:
There is a five year lock-in. After that you can withdraw from the policy and get whatever is the fund value in the sixth year. .
Premiums paid towards the Bajaj Allianz Wealth Insurance Plan are eligible for tax benefits under section 80C. On the other hand, you can claim tax relief for maturity benefit, death benefit and surrender value under section 10(10) D of the Income Tax Act.
The policy shall automatically become void on the earlier occurrence of either of the following events: