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Bajaj Allianz Life LongLife Goal is a new-age whole life unit-linked insurance plan (ULIP) that comes with competitive features.
The plan scores over other whole life ULIPs and regular online ULIPs on fund performance, loyalty additions and lower charges. An option to choose ‘retired life income’ that provides regular income, post-retirement, to the life assured is an added advantage.
Whole life ULIPs offer a life cover up to 99/100 years of the life assured’s age. In Bajaj Allianz Life LongLife Goal, the policy term is 99 minus age at entry of life assured, while the premium paying term ranges from 7 to 25 years.
This ULIP from Bajaj Allianz is available offline and online. On maturity, the plan will give the fund value. On death of the insured during the policy term, the fund value, or 105 per cent of total premiums paid, or sum assured, whichever is higher, will be paid.
Regular retirement income
One of the attractive features under this plan is ‘retired life income (RLI)’. By opting for this, the policy holder will receive regular income on attaining the age of 55 or after 10 policy years, whichever is later.
As percentage of your fund value ranging from 0 to 12 per cent per annum (based on your choice), the amount is payable by redeeming the units. As an additional benefit called return enhancer, each RLI instalment will increase by 0.5 per cent over and above the percentage chosen. Please note that no RLI will be paid if the fund value drops below 105 per cent of the total premiums paid.
Better fund options
Data sourced from Capitaline show that equity funds from Bajaj Allianz Life have been chart-toppers across periods and have beaten their respective benchmarks and peers since launch. For instance, Bajaj Allianz Life equity growth fund II (invests primarily in large-cap stocks) has delivered a compounded annualised return of 16 per cent in the five-year time-frame (as of February 19, 2019). During the same period, ULIP funds in the large-cap category clocked 12 per cent returns, while large-cap mutual funds delivered 11 per cent.
The eight fund options offered for investors with different risk profiles are equity growth fund II (invests primarily in large-cap stocks), blue chip equity (and index fund), accelerator mid cap fund II, pure stock and pure stock II (both follow ethical strategy), asset allocation II (mix of equity and debt), bond and liquid funds. Over the long run, the bond fund also performed well by delivering a compounded annualised return of 9 per cent over the last five years.
The ULIP also offers four investment strategies based on the individual’s requirement — investors selectable portfolio strategy, wheel of life portfolio strategy, trigger-based portfolio strategy and auto transfer portfolio strategy. Under the investor selectable portfolio strategy, one can invest in any of the eight funds as desired. Unlimited free switches are allowed among funds and portfolio strategies (only in under the investor selectable portfolio strategy) during the policy term.
Attractive additions
Bajaj Allianz Life LongLife Goal offers ‘loyalty additions’ to the fund value as percentage of annualised premium at the end of each policy year, commencing from the end of fifth year. The addition of 2, 4, 6 and 7 per cent every year are for the 5-9, 10-14, 15-19 and 20-25 years respectively. The other attractive feature is that the plan returns all the mortality charges collected during the policy term at regular intervals — it starts from the end of the 15th policy year and thereafter every tenth year.
The additions increase returns for the investor.
Charges
In Bajaj Allianz Life LongLife Goal policy, there are no premium allocation and policy administration charges if bought online.
The fund management charge is 1.25-1.35 per cent for equity funds and 0.95 per cent for debt funds.
The net yield under the plan for a gross return of 8 per cent, assuming a premium-paying term of 20 years, comes to 6.59 per cent. This is more or less equal to that of other online ULIPs.
Investors who wish to plan for retirement can consider this ULIP and choose equity fund options.
However, being a ULIP, you may consider taking a separate term insurance policy for a adequate life cover.
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