How good is Bharti Axa Life Secure Income Plan?
Last week, Bharti Axa life has launched a new limited plan called Bharti Axa Life Secure Income Plan with guaranteed monthly income after a period and sum assured with guaranteed additions as maturity benefit. This is a traditional insurance-cum-investment product. While there are some good features about this plan, in this article, I would provide more insights about the features of Bharti Axa Life Secure Income Plan and its suitability to individuals who want to invest this for insurance-cum-investment product.
About Bharti Axa Life Secure Income Plan
Bharti Axa Life is a joint venture between Bharti Enterprises and Axa which is world’s largest insurance company. Bharti Axa says that this is a plan which would provide a guaranteed monthly income to full-fill short term needs of customers and lump sum amount at maturity for long term. Secure Income Plan is compliant with new IRDA guidelines for traditional plans.
Features of Bharti Axa Life Secure Income Plan
There are 3 benefits available under this plan.
- Guaranteed Income benefit
- Maturity Benefits
- Death Benefits
1) Guaranteed Income Benefit
Under this benefit, guaranteed income is paid to customer after the completion of premium payment term until maturity, provided the policy should be force and all due insurance premiums must be paid. Income generated through this plan is Tax free. Policy term available is 15, 17 and 20 years. Below table indicates the premium payment term, guaranteed income % and guaranteed income period. The income is paid every month based on guaranteed annualised %.
*8% of sum assured per annum
2) Maturity Benefit
Under this benefit, fixed guaranteed additions declared as percentage of sum assured would get added every year to policy after completion of premium term until maturity of policy. Sum assured along with guaranteed additions would be paid at maturity. Tenure, no. of years of premium payment and % of guaranteed additions is indicated below.
3) Death Benefit
In case of death, the highest of the following would be paid as per death benefit.
4) Eligibility to apply for Secure Income Plan
a) Minimum age for entry:
- 3 years for 15 years policy
- 1 year for 17 years policy
- 0 year for 20 years policy
b) Maximum age for entry:
- 65 years for 15 years policy
- 63 years for 17 years policy
- 60 years for 20 years policy
c) Maximum age at maturity: 80 years
7) Quick check on returns also: I have done a quick math about how the returns would be considering for a 30 years individual if he take a policy for Rs 10 Lakhs. The returns are computed after considering yearly premiums from 1 to 10th year and outflow of 8% of sum assured every year for subsequent 10 years + maturity benefit (Sum assured + 10.5% guaranteed additions per year on sum assured). The annualized returns worked out to be 3.5%. Means the returns on such products would be around 3.5% to 4% per annum depending on the age of the person.
Conclusion: While I would not like ULIP policies where heavy charges are charged during initial years, Bharti Axa Life Income Secure Plan returns are guaranteed. Thought I am not excited with this insurance plan, if an individual is looking for fixed income after 10 years along with insurance coverage, one can consider this Insurance Plan. Alternatively, you can choose term insurance plans and invest balance in low risk options like Bank FD or debt mutual funds to get higher returns.
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Bharti Axa Life Secure Income Plan
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