Bharti AXA Life Power Kid Insurance Plan

Name of Policy

Bharti AXA Life Power Kid Insurance Plan

Type of Policy

ULIP

Various Investment Options

Growth Opportunities Plus Fund: - To provide long-term capital appreciation through investing in stocks across all market capitalization ranges (Large, Mid or Small).

Grow Money Plus Fund: - To provide long-term capital appreciation through investing across a diversified quality equity portfolio.

Build India Fund To provide long-term capital appreciation through exposure to equity investments in Infrastructure and allied sectors, and by diversifying investments across various sub-sectors of the infrastructure sector.

Save ’n’ grow Money Fund To provide steady accumulation of income in medium to long term by investing in high quality debt papers and government Securities.

Steady Money Fund: - To provide steady accumulation of income in medium to long term by investing in high quality debt papers and government Securities.

Safe Money Fund: -To provide capital protection Corporate through investments in low-risk money-market & short-term debt instruments with maturity of 1 year or lesser.

 

 Features

Parameter

Value             

Entry age

Minimum: 21 ; Maximum: 50 years

Maturity Age

65 years for 15 year term

70 years for 20 year term

Policy Term(Fixed)

15/ 20 Years                               

Premium Payment Term

Equal to Policy Term

Premium Payment Term

Annually, Semi Annually, Quarterly and Monthly

Premium

Policy Term(Years)

Annually

Semi Annually

Quarterly

Monthly

15/ 20

26,000

13,000

6,500

2,167

Basic Sum Assured

Age at Entry

Sum Assured

21-34 Years

25 * Annual Premium

35-50 Years

20 * Annual Premium

 

 

Charges

Explanation

Premium Allocation Charge (on regular premiums)

Year 1       

Year 2-5        

Year 6 onwards

8%           

5.50%            

0.00%

Policy Administration Charge( PAC)

This charge is deducted by cancellation of units from the Policy Fund Value on a monthly basis. The monthly Policy administration charge is Rs. 90 per month and is charged from 6th Policy Year onwards. This charge will escalate at 5% p.a. every Policy Year.

Fund Management Charge (FMC)

 

Type of Fund

Charge

Growth Opportunities Plus Fund

1.35% p.a.

Grow Money Plus Fund

1.35% p.a.

Build India Fund

1.35% p.a.

Save ’n’ grow Money Fund

1.25% p.a.

Steady Money Fund

1.00% p.a.

Safe Money Fund

1.00% p.a.

Risk Benefit Charge

This charge is applied to provide for the death benefit under this plan.

 

COI charge for Base Sum Assured:

This charge is applied on per 1000 Sum Assured

Age at Entry

(in years)

Policy Term

15 years

Policy Term

20 years

30

1.65

2.07

35

2.49

3.24

40

4.00

5.16

 

 COI charge for Future Premiums paid:

This charge is applied on per ` 100 Annual Premium

Age at Entry

(in years)

Policy Term

15 years

Policy Term

20 years

30

1.31 

2.07

35

1.49

2.44

40

2.33

3.88

 

Education Allowance Charge:

This charge is applied on per 100 Annual Education Allowance (i.e.

10% of Sum Assured)

Age at Entry

(in years)

Policy Term

15 years

Policy Term

20 years

30

1.21

1.86

35

1.74

2.77

40

2.73

4.39

Life Cover

Yes

Illustration

Let us assume a simple case:

  •      Your age: 30 years
  •      Sum assured- 7.50 lakh
  •      Policy term: 20 years
  •      Premium: Rs. 30,000 p.a.

The life insurance component is miniscule, not exceeding 25 times your annual premium. If you really want life insurance, a good term plan will give you life insurance of about 500 times your annual premium – so you would rather avoid the fund.

Let’s see what you get:

  •       life cover plus Investment
  •      Of your first year premium of Rs. 30,000 p.a. 8%+ 0.001% +Risk Benefit charge + Mortality charge is removed. Most of this goes to your agent’s pocket. Only the remaining gets invested in the fund.
  •      Of your 2-5 year premium of Rs. 30,000 p.a. 5.50%+0.001% +Risk Benefit Charge + Mortality charge gets removed again. Most of this again goes to your agent, and only the remaining gets invested.
  •       In addition to this, of your total fund, the fund management charge of ~1.35% is cut every year
  •      Instead, if this Rs. 30,000 p.a. had gone into a Systematic Investment Plan in a Mutual Fund, giving a return of approximately 15% a year on a five year average, not a single Rupee would have been deducted as policy charges. It would not take a mathematician to deduce that the returns here will be much better.

 

In summary, investments can deliver returns only if the costs are not so high.

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