This plan is best suited for those looking for a pure investment plan that also combines death benefit—though the death benefit (or risk cover bit of the plan) is probably for meeting the legal requirements. (IRDA—the insurance industry regulator—has mandated that all ULIPs must have death cover.)
Like other Bajaj Allianz plans, they have some good funds underlying them. So if you have surplus cash lying somewhere, and want to invest it, then this would be one of the options.
Ø Single premium plan with fixed term of 10 years.
Ø Sum Assured can be 1.1/1.25 to 5 times of the Single Premium.
Ø You can choose from nine funds including Shield Plus Fund III. If you invest in Shield Plus III, then you get a guaranteed minimum return—Rs 170 after 10 years for Rs 100.
Ø Return of up to 6.00% of the single premium at maturity as Guaranteed Addition.
Ø Flexibility in terms of
o Option to decrease Sum Assured—this will release more money to be invested in funds leading to more money at the end of policy term. This feature is useful in case you get yourself covered nicely with Term Plan (we like Term Plans very much and strongly recommend these) down the line.
o Unlimited top-up premium payment.
o Partial Withdrawals anytime after five years from the commencement of the policy—a standard feature in most such plans.
o Unlimited Free Switches—a standard feature in most such plans.
o Optional Rider Benefits—a standard feature in most such plans.
Having gone through the key benefits of Bajaj Allianz Shield Insurance Plan, let’s now examine its various aspects in detail.
|Minimum Entry Age||8 years (18 years in case of Additional Rider Benefits)|
|Maximum Entry Age||65 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 years|
|Minimum Single Premium||Rs 25,000|
|Maximum Single Premium||No Limit|
|Minimum Top Up Premium||Rs 5000|
|Maximum Top Up Premium||No Limit|
|Minimum Sum Assured||Age at Entry||Minimum Sum Assured|
|8-44 years||1.25 times single premium|
|45-65 years||1.1 times single premium|
|Maximum Sum Assured||Age at Entry||Maximum Sum Assured|
|8-55 years||5 times single premium|
|56-65 years||1.1 times single premium|
Investment Options (Funds)
This unit-linked policy gives you the following array of 9 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).
Some of the funds have good track record so if you are looking to invest in this plan for upside, go for it. But if the guaranteed return is what you are looking for, there are other plans such as ICICI LifeLink Pension SP that offer better guarantees.
|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)||60-100%||0-40%|
|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%|
|Growth Plus Fund 3 (invests in highly rated secured debentures, corporate bonds, equities and money market instruments)||0-20%||80-100%||80-100%|
|Shield Plus Fund 3 ( invests in debt securities, equities, mutual funds and highly rated debentures)||0-50%||0-50%||50-100%|
Test case for investment returns –
Age – 30 Years; Policy term – 10 years; Single Premium – Rs. 50,000; Sum Assured – Rs62,500
|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%||303,588.88|
|Bluechip Equity Fund||-26.59%||- 49,708.85|
|Equity Growth Fund II||14.41%||114,221.94|
|Accelerator Mid-Cap Fund II||9.10%||50,010.84|
|Asset Allocation Fund||8.86%||47,724.73|
|Shield Plus Fund 3||4.87%||15,871.06|
|Growth Plus Fund 3|
The Bajaj Allianz Shield 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:
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.