Bajaj Allianz Life Insurance has a new 'increasing income' savings plan

Bajaj Allianz Life Insurance on Monday launched a non-unit linked insurance plan offering increased Income every year. This latest policy offering by is a variant of the insurer's flagship participating savings plan, Bajaj Allianz Life ACE, which was launched earlier this year. 

Bajaj Allianz Life ACE - Increasing Income provides life cover with tax benefits and allows flexibility in determining policy terms, ranging from 10 years to 100 years of age, said the insurer. 

A non-unit-linked savings plan is a traditional life insurance plan that combines insurance with wealth creation through investments in government bonds and fixed deposits. This option is suitable for those seeking moderate-risk returns over the long term. There are two types: participating plans offer bonuses from policy profits, while non-participating plans provide guaranteed returns without bonuses.

The plan offers choices like early Income for immediate expenses, wealth options for creating a legacy and increasing income for strategic retirement planning.

Here are the key features of the Bajaj Allianz Life ACE - Increasing Income:

• You receive an income, including a guaranteed amount and potential cash bonuses.
• This income is paid after the premium payment term and deferment period, lasting until the policy term ends.
• Increasing Income option provides income in arrears at five per cent p.a. (on a compounding basis) every year.
• The benefit sum assured is used to calculate guaranteed incomes and cash bonuses.
• Guaranteed Income is 2 per cent of the benefit sum assured.
• Flexible policy term options range from 10 years to 100 years of age.
• You can defer the income start by up to 5 years.
• On maturity, you get a sum assured on maturity (105 per cent of total premiums paid), accumulated income benefits, and a terminal bonus if declared.
• In case of death, the benefit includes a sum assured on death, 105 per cent of accumulated income benefits, and a terminal bonus if declared.
• You can choose monthly/yearly cash bonuses starting after the deferment period.
• Maturity Benefit includes sum assured on maturity, accrued simple reversionary bonus, and terminal bonus if declared.
• Death Benefit covers the sum assured on death, accrued simple reversionary bonus, and terminal bonus if declared.

Let's try to understand this with an example: A 35-year-old male is paying an annual premium of Rs 2 lakh for 12 years. Suppose the policy term is 50 years, the deferment period is zero years, and the income period is 38 years. The total premium paid will be Rs 24 lakh, and the sum assured on death is Rs 22 lakh (at inception).

Source: Bajaj Allianz Life website

"In a dynamic economic environment with rising inflation, we understand that customers seek opportunities to create long-term wealth to help them meet their financial goals. Aligned with this we’ve launched Bajaj Allianz Life Ace - Increasing Income, which offers and provides unparalleled control in the hands of customers to decide when they want to receive their income and maturity benefit,” said Tarun Chugh, MD and CEO of Bajaj Allianz Life Insurance.