This is the blog post for Bharti Axa Elite Advantage Plan in which we will review its details, check what are the true returns that this plan generates and find out whether or not you should take this plan.
Plan Review Date
25 – Sep – 2021
Plan Name
Bharti Axa Elite Advantage Plan
Plan Code
UIN:130N060V05
Plan Type
Non-Linked, Non Participating Individual Life Insurance Savings Plan
A plan which is Non-Linked means that the returns for this plan are not linked to Stock Market.
And Non-Participating means that this plan will not be participating in the Bonuses declared by the company.
Individual means that the plan can only be taken on an Individual’s Life
Savings Plan, since the plan is offering you Guaranteed Returns
Bharti Axa Elite Advantage Plan’s USP
Guaranteed pay-outs of 8.5% to 9.5% of Sum Assured on Maturity, paid during Maturity Payout period.
The Guaranteed Payouts will actually be a a percentage of Sum Assured on Maturity and not based on the Premium Paid.
Reasons to Buy (As per Company)
The company is offering following as the reasons for “investing” in this plan –
- Guaranteed benefits at regular intervals from end of 13th year to end of 19th year
- Guaranteed lump sum benefit at Maturity
- 100% of Sum Assured on Maturity paid at the end of 20th year from the policy date.
- Different Premium payment Terms to choose from. Premium payment Terms being 5, 7 and 12 years.
- Receiving Tax benefits on the Premiums paid and pay-out benefits received.
The carrot of Tax Benefits being offered is the biggest driver in selling of these Insurance Plans. However, we will soon find out why this is not really a great thing and should better be avoided.
Reasons NOT to Buy
Check my detailed Youtube Review (Link Below)
How Bharti Axa Elite Advantage Plan works?
Bharti AXA Life Elite Advantage is a traditional non-participating savings & protection oriented plan. The insured pays the premium for the chosen Premium Payment Term. At the end of Policy Term, the Maturity Benefit Period will start during which Guaranteed Payouts will be paid from the end of the Policy Term until the end of the 19th year. At the end of the 20th year, 100% of the Sum Assured on Maturity will be paid to the Policyholder.
The below illustration will make the policy easy to understand.
Calculation of Returns
For the above given Illustration and scenario, the plan offers an overall return of 4.28%. This is considering the fact that no tax benefit has been availed against the Premium Paid. If one choses to avail tax benefits against the premium paid, the returns jump to 5.14%, 6.12% and 7.23% for people in 10%, 20% and 30% tax benefit. Detailed calculations in this regard has been uploaded in an Excel Sheet whose link is given below.
If you wish to create a True Returns Sheet for your Insurance Plan, you can mail me at [email protected] . The charges for the same can be referred on this page.
Excel Sheet
Please find below the Link for the Excel Sheet.
Alternatives to this Plan
In my video, I have tried to explain that instead of buying Bharti Axa Elite Advantage Plan, once can opt for Bharti Axa’s Flexi Term Pro Plan which is a Pure Term Plan.
Even if one choses a Policy Term of 20 years for the Flexi Term Pro Plan (which in case of Bharti Axa Elite Advantage Plan is 12 years), and choses to pay premium for 12 years, the premium for an Insurance cover of ₹1 Crore comes to only ₹15,000 (₹17,700 with GST). If one also choses to take a Rider of Critical Illness along with it, which will help in waiving off future premiums should one be detected by any of the Critical Illness covered under the plan, even then the Premium only jumps upto ₹18,390 (including Tax).
Compared to premium under Bharti Axa Elite Advantage, this is less than 20% of its premium but promises to give 10 times to Life Insurance coverage along with added benefits. The extra amount saved can then be invested in other instruments and the same can give really great results along with the benefit of enhanced liquidity.
Benefits can be summarised as follows :
- 10 Times the Insurance Cover
- Take out your money when you want
- Premium Waiver in case of Critical Illness
- Get High Returns
EPM Rating
Basis all the above factors and the details that I have covered in the video, this plan gets a rating of 4/10.
Hi Sir, the Call centre guy is saying if I invest 1 lakh per year, i will get a return of Lump Sum amount of 27 lakhs at the end of 12th year.
When I calculate the IRR of this it is coming close to 11.68.
Just want to confirm if my calculations is incorrect? Please advise if this is is advisable?
Really appreciate your response sir.
Without even checking anything, I can say that if returns are coming that high, then something is certainly wrong.
Even I got a call today stating invest 1L p.a. and you’ll get 29L at the end of 12th year. Sounds too good to be true.
Hi,
I also got call that invest 1lac per annum and get guaranteed 27 lacs after 12 years. The rate of interest will be 12% and it will be written on policy document as well. Bit confused if thats true