Compare Bajaj Allianz Guarantee Assure Plan

Bajaj Allianz-Life-Insurance-Company

Bajaj Allianz Guarantee Assure Plan

Bajaj Allianz Guarantee Assure is a traditional endowment plan which does not participate in bonus declarations but the plan earns Guaranteed Additions. Premiums are payable only for 5 years while the plan continues longer. Females are charged a lower rate of premium and there are also premium discounts for higher Sum Assured levels. The plan also provides monthly instalment options where the benefits are payable monthly if desired.

Key features of the plan

  • Premiums under the plan are paid only for a limited tenure of 5 years.
  • Guaranteed Additions increase the benefit payable and go as high as 63% of the Sum Assured.
  • Premium discounts are allowed for female lives and high Sum Assured levels.
  • The benefits under the plan can be taken either in lump sum or in monthly installments over 5 or 10 years.

How does the plan work?

Step 1 – the policyholder chooses the Sum Assured and the plan term. Based on the insured’s age and the above factors, the premiums are calculated.

Step 2- Guaranteed Additions are paid throughout the plan tenure. Their rate depends on the policy term selected.

Step 3 - in case of death, the death benefit would be paid which is the Sum Assured on Death and accrued Guaranteed Additions.

Step 4 – if the insured survives the plan tenure, the maturity benefit is paid which is the Sum Assured and accrued Guaranteed Additions.

Example

Vihan, aged 40 years buys a plan for 9 years for a Sum Assured of Rs.2 lakhs. He chooses to pay premiums annually.

Option 1 – Guaranteed Additions accrue under the plan @ 7% of the Sum Assured which is Rs.14, 000. If Vihan dies in the 5th year of the policy, higher of 10 times the premiums paid, Sum Assured of Rs.2 lakhs or 105% of premiums paid till the 5th year would be paid. The accrued Guaranteed Additions of Rs.70, 000 (Rs.14, 000*5) would also be paid along with the death benefit. Vihan’s nominee can take the death benefit in monthly instalments. If the Sum Assured was the highest, the death benefit becomes Rs.2 lakhs + Rs.70, 000, i.e. Rs.2.7 lakhs. In this case, each monthly instalment would be: 1.08*270, 000/120 if the payout term is 10 years which comes to Rs.2430

Option 2 – when the plan matures, the maturity benefit would be the Sum Assured which is Rs.2 lakhs and the accrued Guaranteed Additions which is Rs.14, 000 added for 9 years, i.e. Rs.1.26 lakhs. Thus, the total maturity benefit would be Rs.2 lakhs + Rs.1.26 lakhs which comes to a total of Rs.3.26 lakhs. This maturity benefit can be taken in monthly instalments over 5 or 10 years. The instalments would be computed as follows:
For 5 years – 1.04*326, 000/60 = Rs.5651
For 10 years – 1.08*326, 000/120 = Rs.2934

Plan benefits

  • Death benefit – if the life insured dies during the term of the plan, and all premiums have been paid, the Sum Assured on death is paid. The Sum Assured on death is higher of 5 times the annual premium, Sum Assured or 105% of premiums paid till death. The death benefit can be taken in monthly instalments over a 5 or 10 year period. each monthly instalment would be calculated as follows:
  • If taken in 5 years – 1.04*maturity or death benefit/60
    If taken in 10 years – 1.08* maturity or death benefit/120

  • Maturity Benefit – when the chosen tenure of the plan comes to an end, and all premiums have been paid, Sum Assured is paid to the policyholder along with the accrued Guaranteed Additions. The policyholder can take the maturity benefit in monthly instalments over a period of 5 or 10 years. One monthly instalment would be calculated as below:
  • If taken in 5 years – 1.04*maturity or death benefit/60
    If taken in 10 years – 1.08* maturity or death benefit/120

  • Guaranteed Additions – guaranteed additions are added every year of the plan tenure as a percentage of the Sum Assured. The additions depend on the policy term and are 5% of the Sum Assured for a 7 year term, 6% of the Sum Assured for a 8 year term and 7% of the Sum Assured for a 9 year term.
  • Early Termination Value – if the policyholder has paid the first annual premium and the plan has completed one year from inception but two years’ premiums have not been paid, an Early Termination Value is paid if the policy is surrendered. The value is calculated as 10% of the premiums paid plus 10% of the Guaranteed Additions added under the plan.
  • Premium discounts – discounts are allowed in premium if the policyholder chooses a high Sum Assured under the plan. The discount allowed is Rs.7.50 for each Rs.1000 Sum Assured over R.1 lakh. Moreover, female lives are also charged a lower premium.
  • Loan – up to 90% of the acquired Surrender Value can be availed as loan under the policy.

Eligibility:

  Minimum Maximum
Age at entry (in completed years) 9 years 60 years
Age at maturity (in completed years) 18 years 69 years
Term of the plan 7,8,9 years
Premium paying options Limited pay
Premium Paying term 5 years
Premium amount Yearly – Rs.23,839
Half-yearly – Rs.12,158
Quarterly – Rs.6198
Monthly – Rs.2145
No limit
Sum Assured on Maturity Rs.1 lakh No limit

What is not covered in the policy?

  • In case of suicide committed within 12 months of inception, 80% of the premiums paid are refunded.
  • If suicide is committed within 12 months of revival, higher of 80% of the premiums paid or the surrender value under the plan is paid.

Premium Illustration

Below are the sample rates of premium payable by a non-tobacco user male for a combination of different ages, term and Sum Assured. The premiums are assumed to be paid annually and the premium paying term is the policy term less 5 years.

Bajaj-Allianz-Guarantee-Assure

FAQs

What are the premium paying frequencies?

The premium paying frequencies are annual, half-yearly, quarterly and monthly.

What is the grace period available under the plan?

If premiums are paid in monthly mode, grace period is 15 days. If, on the other hand, premiums are paid in any other frequency, the grace period allowed is 30 days.

When does the plan acquire Paid-up Value?

Paid-up Value is applicable if at least the first 2 years’ premiums have been paid by the policyholder.

Are there any riders under the plan?

No riders are available under the plan.

What happens if the insured dies due to an accident within the first month of buying the policy?

Since the insured died due to an accident which was uncertain, the death benefit would be paid irrespective of when the death has occurred. If, however, the insured had committed suicide within the first policy year, 80% of the premiums paid would have been refunded and no death benefit would have been paid.


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