Cash-rich insurance plan from Bajaj Allianz is a money-back plan that gives the flexibility to choose the premium paying term as well as the money-back term. Thus, for a policy term of say 25 years, the investor is free to choose the premium-paying term of 5, 10, 15 or 20 years. The balance period can be used to receive regular amounts as cash-backs.

Despite the feature of providing a regular income to the policy holder, the kind of returns that the scheme generates till maturity fail to impress if one were to alternatively consider investing a similar amount in other products such as fixed deposits, tax-saving bonds or PPF. Buy a pure-term plan instead that costs very little premium to provide cover to life and invest the surplus in other noninsurance savings products for better yields.

Maturity Gains

Assuming a sum assured (SA) of 10 lakh, for a policy term of 25 years by a healthy male-aged 30 years, the benefits that will accrue at the end of the policy term are illustrated thus…

Unique Feature

Apart from regular cash-back, which is 5% of the sum assured, payable annually during the cash back period, the scheme also provides for annual reversionary bonus, interim bonus and terminal bonus. These are, however, not assured and are payable on company's discretion. Being just a year old, the scheme does not have any bonus history.

For Existing Customers

As the policy is yet to complete three years, it cannot be surrendered. The existing investors are thus advised to stay invested at least for three years as an exit at this stage would mean loss of all premiums paid till date.

For Those Looking to Invest

The scheme suits those who find comfort in managing insurance and investments under one basket, even at the cost of returns. Regular cashbacks ensure a source of income during the aging years if the policyholder survives the term, while the death of the policyholder during the term shall bestow the payment of entire sum assured to the nominee.