India's 1st IRDAI Approved Insurance Web Aggregator
Bajaj Allianz Principal Gain Plan
Bajaj Allianz Principal Gain Review
Bajaj Allianz Principal Gain is a Unit Linked Insurance Plan which promises a guaranteed maturity benefit. Thus the plan enables the policyholder to reap three benefits under a single policy which are of principal protection, life insurance cover and market-linked returns.
Highlights of the Bajaj Allianz Principal Gain Plan
This is a Unit Linked Plan where premiums can be paid either for the entire plan tenure through Regular Premiums or for a limited tenure through Limited Premiums.
Guaranteed Loyalty additions are added to the Fund Value when the plan matures.
The plan follows the Guaranteed Builder Portfolio Strategy of investment which reduces marker risks and protects the principal.
The policyholder can choose any combination of the policy term and the premium payment term.
Working of the Bajaj Allianz Principal Gain Plan
The policyholder decides on the amount of premium he wants to pay, the policy term, the premium paying term and the premium paying frequency.
The Sum Assured is based on the amount of premium paid and is fixed at 10 times the annual premium.
The premium paid, net of the applicable allocation charge is invested in the Guarantee Builder Portfolio Strategy. Under this investment strategy, the net premiums are first invested by the company in two funds of Balanced Equity Fund and Builder Bond Fund in a predefined ratio. The investment in the Balanced Equity Fund is higher in the initial years. As the plan nears maturity, the proportion of money invested in the Balanced Equity Fund is reduced and the Builder Bond Fund is proportionately increased.
The fund is also rebalanced every policy anniversary to maintain the minimum required percentage in the Builder Bond Fund.
This strategy protects the returns from market volatility as the plan approaches maturity.
If the policyholder wants, he can change the premium paying term subject to certain terms and conditions.
If the policyholder dies during the tenure of the plan the death benefit is paid.
If the plan attains maturity, the maturity benefit is paid.
Benefits and Features of Bajaj Allianz Principal Gain Plan
Maturity Benefit – On maturity, higher of the following is paid to the policyholder:
The available Fund Value on maturity date + Guaranteed Loyalty Additions
101% of the premiums paid which is the Guaranteed Maturity Benefit.
The policyholder, if wishes, can also avail the maturity benefit in installments over a period of 5 years post the date of maturity under the Settlement Option.
Death Benefit – If the insured dies when the plan is in-force, higher of the following would be paid as the death benefit:
Fund Value as on the date of death
105% of the total premiums paid till death which is the Guaranteed Death Benefit
Bonus – Being a ULIP plan, bonus is not declared.
Guaranteed Loyalty Additions – If the policyholder has paid the premiums for at least 5 years, he would be entitled to receive Guaranteed Loyalty Additions at the time of maturity. The Guaranteed Loyalty Addition is expresses as a percentage of the annual premium paid and is equal to 4% of the annual premium if the policy term is up to 10 years or 15% of the annual premium if the chosen term is more than 10 years.
Claw-back Additions – As per the IRDA regulations, non-negative additions would be added to the Fund Value to fulfill the maximum reduction in yield criteria from the end of the 5th policy year.
Loan –loan is not available under the plan.
Tax benefit – Premiums paid under the plan would be exempt from tax under Section 80C up to a limit of Rs.1.5 lakhs. The death benefit or the maturity benefit received would also be tax exempt under Section 10(10D) of the Income Tax Act.
COMPARE THIS PLAN WITH OTHER ULIP PLANS
Eligibility Criteria of Bajaj Allianz Principal Gain Plan
The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
Entry age (Last Birthday)
Maturity Age (Last Birthday)
Annual – Rs.15,000
Monthly – Rs.2000
Premium Paying Term
5 years to 15 years
10 times the annual premium
Top-up Sum Assured
1.25 times the top-up premium if age is lower than 45 years
1.10 times the top-up premium if the age is 45 years and above
Premium payment mode
Annual and monthly
Applicable charges in Bajaj Allianz Principal Gain Plan
Being a ULIP plan, there are certain charges applicable. The charges include the following:
Premium Allocation Charge – This charge is deducted on receipt of each premium before the premium is credited into the fund. The charges is:
% of premium paid
2 – 5 years
6 years onwards
Policy Administration Charge – There is no charge in the first 5 years of the plan. From the 6th year onwards, an annual charge of 2.5% of the annual premium paid would be applicable for the duration of the premium paying term. This charge would be calculated and levied on a monthly basis.
Fund management Charge – These charges depend on the type of fund selected and are charged on a daily basis. The applicable charges are:
Balanced Equity Fund
1.25% per annum
Builder Bond Fund
0.95% per annum
Discontinuance Life Fund
0.50% per annum
Miscellaneous Charges – A charge of Rs.100 per transaction for altering the premium paying term or frequency would be charged.
Guarantee Charge – 0.25% of the Fund Value.
Discontinuance Charge – Applicable for policies in which premiums are discontinued. The charges are:
Year of Discontinuance
Annual Premiums up to Rs.25,000
Annual Premiums above Rs.25,000
Lower of 20% of annual premium or Fund Value up to a maximum of Rs.3000
Lower of 6% of annual premium or Fund Value up to a maximum of Rs.6000
Lower of 15% of annual premium or Fund Value up to a maximum of Rs.2000
Lower of 4% of annual premium or Fund Value up to a maximum of Rs.5000
Lower of 10% of annual premium or Fund Value up to a maximum of Rs.1500
Lower of 3% of annual premium or Fund Value up to a maximum of Rs.4000
Lower of 5% of annual premium or Fund Value up to a maximum of Rs.1000
Lower of 2% of annual premium or Fund Value up to a maximum of Rs.2000
5 year onwards
Mortality charge – This charge is deducted on the first day of each month based on the Sum at Risk and the policyholder’s age.
Additional Benefits of Bajaj Allianz Principal Gain Plan
Riders – There are no riders under this plan.
Partial Withdrawals – Partial withdrawals are not allowed in the plan.
Top-up Premiums – Top-up premiums are not allowed under the plan.
Grace Period – A grace period of 30 days is allowed for annual mode of premium and 15 days for monthly mode of premium payment.
Free Look Period – A cooling off period or a free look period of 15 days is granted to the policyholder after the policy issuance to review the policy terms and conditions. If found unsatisfactory, the plan can be cancelled within this period and the premium paid would be refunded after deducting the relevant mortality charge, service tax, cess and stamp duty paid
Step 1 : Choose your premium
Step 2 : Choose your policy term
Step 3 : Choose your premium payment term
Step 4 : Choose the premium payment frequency (annual or monthly)
Note : Your Sum Assured will be 10 times of the chosen annual premium.
Your money will be invested as per Guarantee Builder Portfolio Strategy. Your premium, net of premium allocation charge,
will be allocated by the Company to Balanced Equity Fund and Builder Bond Fund, based on the proportion and the
outstanding years to maturity (as at policy commencement date) as per the table below:
Your Fund Value will also be rebalanced on each policy anniversary such that a minimum percentage in Builder Bond Fund
as shown in the above table is maintained. But under no circumstance will there be any movement of fund from Builder
Bond Fund to Balanced Equity Fund even if the Fund Value under the Builder Bond Fund is higher than the percentage
mentioned in the table above.
Let's Understand The Plan With An Example:
35 years old Rahul has taken a Bajaj Allianz Life Principal Gain policy for a Policy Term of 15 years. Rahul has decided to pay
Rs.25,000 as annual premium for a premium payment term of 15 years. His Sum Assured will be 10 times of his annual
premium i.e.Rs.2,50,000. Rahul’s premium, net of premium allocation charge, will be invested as per Guarantee Builder
The Maturity Benefit at 8% and 4% is not guaranteed and is subject to minimum Guaranteed Maturity Benefit of
Rs.3,78,750. In case of Rahul’s unfortunate death during the 5 policy year, his nominee may receive the Sum Assured of Rs.2,50,000 as
Exclusions in Bajaj Allianz Principal Gain Plan
If the policyholder commits suicide anytime during the plan tenure, the available Fund Value would be paid to the nominee.
Non-Payment of Premium in Bajaj Allianz Principal Gain Plan
Premiums are payable for the chosen tenure. If the premiums are not paid, the policyholder has three choices. If the premiums for the first 5 years are not paid, the policyholder would have to either revive the policy or the policy would deemed to be surrendered and the Surrender Value would be paid. If premiums are discontinued after 5 years, the policyholder can revive the policy, make it paid-up or surrender the policy.
Surrendering the policy
Within the first 5 policy years
The policy has a 5 year lock-in period. If the policy is surrendered within the first 5 years, Fund Value and would be transferred to the Discontinuance Policy Fund after deducting the Discontinuation charges. The life cover and the Guaranteed Maturity Benefit would cease to apply. The money would remain in the Discontinuance Policy Fund till the completion of 5 years and the Fund Management charges would be deducted as and when applicable. If the policyholder dies during this period, the Fund Value as on the date of death would be paid. Otherwise, after the completion of the lock-in period of 5 years, the available Fund Value would be paid.
After 5 years
If the plan is surrendered any time after the completion of 5 years, the available Fund Value and any would be paid without deduction of any charges.
Making the policy paid-up
Paid-up facility is available only if the first 5 years’ premiums have been paid. The benefits payable in case of a paid-up policy are:
Death Benefit – higher of the following:
Paid-up Sum Assured
Guaranteed Death Benefit of 105% of all premiums paid till death
Maturity Benefit – higher of the following:
Fund value on maturity date + Guaranteed Loyalty Additions
Guaranteed Maturity Benefit of 101% of all premiums paid
Revival is allowed within 2 years from the date of the first unpaid premium. The policyholder would be required to pay the outstanding premium and any interest charged by the insurer to revive his policy.