Bharti Axa Invest Once Insurance Plan – What are its hidden factors?
Bharti Axa Life Launches Invest Once Insurance Plan – What are its hidden factors?
Last week, Bharti Axa Life has launched “Invest Once”, single premium plan targeting young investors. Bharti Axa Invest Once plan says guaranteed additions of 9% every year. This is creating some buzz in the market as none of the money back / endowment plans provide such high returns. What are the features of Bharti Axa Invest Once Single Insurance Plan? What are the hidden factors of Bharti Axa Life Invest Once Insurance Plan?
Also Read: Top Single Premium Insurance Plans to invest in India now
Features of Bharti Axa Invest Once Single Insurance Plan
- This is traditional non-linked, non participating endowment plan.
- This insurance plan is created targetting young investors.
- This plan is available for 2 tenures. One for 5 years and second for 10 years.
- This plan indicates guaranteed additions of 7% for 5 year option and 9% for 10 year option.
- Optional insurance coverage for 10 times of premiums paid by paying additional premiums.
- Minimum premium is Rs 5,000 per annum excluding taxes.
What is the eligibility and features of Bharti Axa Invest Once Insurance Plan?
What are the benefits in Bharti Axa Invest Once Single Insurance Plan?
- Maturity benefit would be as follows:
- 5 year tenure = Single premium paid + 7% returns per annum for 5 years
- 10 year tenure = Single premium paid + 9% returns per annum for 10 years
- To understand better, if one has invested Rs 1 Lakh premium in a 5 year plan, he would get maturity amount of Rs 135,000. If one has invested Rs 1 Lakh premium in a 10 year plan, he would get maturity amount of Rs 190,000.
- Means, thumb rule is 35% returns for 5 year tenure option (5 years x 7%) and 90% returns for 10 year tenure option (10 years x 9%).
- Basic cover would be 190% of single premium paid.
- You can enhance cover by paying as mortality premium.
Let me explain with an example
Mr.Rajesh, 25 years age has taken this plan for 10 years option by paying Rs 1 Lakh single premium. He would have basic risk cover of Rs 1.9 Lakhs (190% of single premium paid). His maturity benefit would be Rs 1,90,000 (at 9% x 10 years). If he can take additional coverage, he need to pay Rs 2,500 additional amount and he would have total insurance coverage of over Rs 10 Lakhs which is 10 times of insurance premium paid.
What does Bharti Axa Life Management say about this new single premium insurance Plan?
Bharti AXA Life Insurance, Sandeep Ghosh, MD and CEO says, "This product will provide investors with both investments as well as savings. Bharti AXA Life Invest Once has been designed keeping in mind the needs of the young investor. The research study helped us understand their expectations of the category, and the delivery of our product; I’m confident (this) will meet their needs. We have provided a user-friendly buying experience by following a mobile first strategy.”
According to officials from the insurance company, though policies can be purchased online, they will also sell the products through agents and particularly leverage Airtel’s network across the country.
Also Read: 10 Points to remember before buying Unit Linked Insurance Plans (ULIP)
Should you opt for Bharti Axa Invest Once Single Insurance Plan?
This is simple endowment plan which guarantees 7% and 9% returns for 5 year and 10 year tenure options. For 5 year, it provides 7% which does not beat inflation. Howevever for 10 years, it provides 9% returns which is some what reasonable. However, there are several other best investment plans which provide higher returns. Mutual funds on one hand can provide 12% to 15% annualized returns (not simple returns). Even a simple plan like Reliance Life Guaranteed Double your money scheme, provides 100% returns in 10 years. In such case why you would go for 10 year plan which would provide only 90% returns? Personally, I would try to avoid such plans. Investors with low risk appetite and do not want to invest in stock markets can opt for such plans.
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Bharti Axa Invest Once Single Insurance Plan
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What about taxability of maturity proceeds?
Sorry for asking unrelated question here, but I didn’t know where to ask this…
I have an account with icici direct and invested in stocks but not in mutual funds. I now want to invest in mutual funds but through direct plans but there is something called KYC that is being asked at the dsp blackrock site.. Can you please tell the procedure to get this done.. And whether is it to be done manually or can be done online? Thanks in advance..
Point no.1 – ICICI direct, you cannot invest through direct plans. Point no.2 – You should visit mutual fund house website to invest directly. Yes KYC there is process, let me put in an article next week so that others would also get benefitted.
Thanks for the prompt reply and waiting for the article 🙂
Sir you didn’t give the article related to KYC this week?
Nice analysis 🙂
Very informative blog which helps to attain the Financial freedom to all.
Keep it up………
Thank you Babitha
Do people not understand the difference between simple interest and compound interest. It is working out to 6.2% for 5 years term and 6.6 for 10 years period compound and not 7 and 9% as promised.