Returns on Bajaj Allianz Super Saver Plan

POSTED BY Vivek ON November 14, 2011 9:01 am COMMENTS (26)

I came to know about the Bajaj Allianz Super Saver Guaranteed addition plan. I did some rough calculations and found that it gives around 14% (Based on terms in brochure – GA of 4% of SA) and around 15.6% (based on GA of 6% of SA as told by the agent ….. but need to confirm)
SA = 7x Annual Premium. Premium paying term : 3 years. Policy term 10 years.

So, for annual premium of Rs 50000 we get SA = 350000 and GA = 21000 p. a. @6% of SA /14000 p.a. @ 4% of SA
So on maturity:
Total premium paid = 150000
Accumulated guaranteed Additions: 210000
SA = 350000
So total return after 10 years = 560000
This gives me a return of 15.6%. Not sure if this is better than many of other types of investments. (debt funds and maybe even balanced/equity funds). I get personal loans at around this rate itself.
Any thoughts??

26 replies on this article “Returns on Bajaj Allianz Super Saver Plan”

  1. Vishvaraj says:

    Hi Friends,

    I too got fooled into buying this policy and paying the policy premium for 3 yrs and making it as paidup. One problem is that I lost my original policy document. If Anybody bought the policy before December 2010 can you please share the scanned copy of the policy document so I can compare with that if they provide the new document to me for policy wordings.

    1. Thanks for sharing that Vishvaraj

  2. Varun Gupta says:

    This is a shit policy, don’t go with it at any point of time however the agent tells you so. Earlier when I had taken this policy the agent used to lure with 1g gold coins. The scheme which they tell is completely different from the actual policy.

    1. I saw your facebook post. Its an endowment policy with just a fancy name 🙂

      The returns are worst and it will be more bad if you close it in between ..

  3. VJ says:

    Hi,

    I have this policy and paying premium of ~50000 per year and maturity is 15 years. The first catch is the sum assured value of 10x, though you are paying the premium for 15 years.

    The benefits are, sum assured 5.09 L + 4 % Guaranteed addition on SA (~20000) per year + vested bonus / interim bonus on the SA (1.3% to 3.15%, I have got 2% for last 3 years; it is ~10,000 per year).

    I made a rough calculation of 6% of SA every year (4% Guaranteed + 2% VB, it is an assumption and it will vary based on the company’s performance), the return will be 30000 per year.
    After the end of maturity, my investment is 15 Y * 50000 = 7.5 L only premium

    According to the benefits in the policy terms you will get during maturity is,
    1. 5.09 L SA + 4.5L GA & VB in total = 9.5 L
    2. Out of 9.5 L, 2.5 L is part of premium (you SA is only 10x times !, in other terms 10 years of premium and last 5 year of premium is excluded from SA)
    3. The actual return is 9.5 L – 7.5 L = 2 L
    4. Dividing 2L by 15 years, it is ~13400 return per year and the return % is 13400 / 200000 is 7% per year, which is way below a simple calculation with same amount in PPF with prevailing interest rate.

    I have decided to close this policy and make it as paid up.
    I got into the trap, though it is not too late to get out of it, instead of making a bad investment for next 12 years !

    Let me know your views.

    Thanks
    VJ

    1. Yes, its better to close off this policy now

    2. karthik says:

      Hi VJ,

      can you please tell me how you made this as a paid up? I got into this trap and the customer care people are telling me you go to ombudsmen. I dont have a good case because the agent who sold me the plan was blacklisted by the company.

      Thanks in advance,
      -Karthik

      1. You just need to stop paying the premium and it will become paid up

        1. SathishKumar says:

          what is the use Paid up ? if i close i will get some amount ! if its change to paid up what will happen? Please explain me !!

          1. If you make it paid up, you dont have to pay further premiums, and you will get the money you paid at maturity !

            1. SathishKumar says:

              Thanks Manish ,
              I have paid 100000 rs till now if I close how much i will get , how they calculated ??

            2. Hi SathishKumar

              This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

              Manish

            3. Ganesh says:

              Do you mean we cannot close the paidup policy untill maturity date?

            4. No it does not mean that. You can close it even later when you will get the money . But the fault timeline is that you get it at maturity

  4. Ak says:

    I have paid for 5 years now of annual premium of 30k. I thought i could surrender. when i went to their office, they gave me a quotation of some 75k. Sum assured is 3 lakh. These kind of plans are trap to customers. if my policy period is 15 years, how come the sum assured is 3 lakh. They are fooling the customers. The agents will describe in terms of 10 years but actual maturity period is 15 years. be aware. its a worse plan. GA=4% of SA. when i calculate, it comes close to my total investment only. nothing more than that even less. All game is of SA. good luck!!

    1. Thanks for sharing that Ak

  5. Sreedhar says:

    I am into this trap and invested for 2 years. Tell me your suggestion to continue or discontinue

  6. Dear pvivekm@yahoo.com, Please do not fall into the agent’s trap. In this policy you w’d have to pay prem. for full 10Y term i.e. 50K * 10 = 5L Rs.

    You ‘ll get gtd. yly accrued bonus @ 4% of sum assured i.e. 14000 Rs. for you = 140000 over 10Y period. Also you ‘ll get additional vested bonus @ 6% sum assured i.e. 21000 Rs. yly (although not guaranteed in nature) for you = 210000 Rs. in 10Y

    Against your total payment of 5L Rs. in 10Y, you ‘ll get basic 3.5L Rs. sum assured + Gtd. bonus 140000 + vested bonus 210000 = 7L Rs. in total.

    Now do tell me, ‘ll you still think over to invest in this plan? I’m even not asking to go for IRR calculation.

    Thanks

    Ashal

  7. How are you calculating the returns ? You are doing it wrong . You need to use IRR method of calculating the returns in this case . Please do the IRR thing and come back with the number , Here is the video in which I explain that .

    https://www.jagoinvestor.com/2011/02/calculate-insurance-policies-returns-video.html

    1. pvivekm@yahoo.com says:

      Thanks Manish for the response and also for helping with my login at the forum 🙂
      I did it the IRR way itself. I am not able to put it in tabular form here nor am I able to attach screen shot….so will try to describe….
      -50000 for 3 years, 0 for remaining 7 years till maturity (10 years) and then +560000 at 11th year (this is the sum I will get on maturity : 350000 (SA) + 210000 (accumulated GAs) = 560000).
      As this sounds too unrealistic return, I am doubting the maturity amount itself …. but that’s what I learned from the agent.

      1. Seems like you have got fooled by agent badly .. I looked at hte plan details , and it will give 4% GA only if the premiums are paid TILL END

        How come you are saying that you need to pay only 3 yrs premium ? Where is that written ? You will have to pay all the premiums and then at the end you get SA + GA

        Check this wordings

        From 2nd policy year onwards, if premium is not paid, the policy will remain in force for two years from the date of unpaid premium.

        So based on that , now your IRR would be 2% , that too at 6% GA . check the things again and come back

        Manish

        1. pvivekm@yahoo.com says:

          Well….this information is based on the initial explanation the agent gave me – no documents as yet except the brochure. ….and I guess it is a tact to confuse you during the discussion without giving any concrete document/illustration. He started initially saying that I can withdraw money after 3 years (that anyway is a different scenario altogether – which I have not mentioned here so far.) But I am sure he said the premium paying term is 3 years. That made me smell a rat when I did the IRR calculations. Of course I have not yet decided on that policy….just doing preliminary checks on the details.

  8. Abhishek says:

    Hi

    This is a typical endowment plan. Dont trust your agent on the 15% return he is showing.. Stay away from this product. You start investing in Equity Mutual Funds through the SIP route..

    Regards
    Abhishek

    1. SS says:

      I was also cheated by the agent. Agent showed me an return of 12%.. As per this policy, if you invest 50000rs/annum, after 15 yrs, you will get a return of Rs. 10lak. max.
      I have paid 4 premiums now (4yrs) 200000rs, if I call the customer care and ask for surrender value, they are quoting 95000rs. Sheer cheat on customers. I don’t know what to do.

      1. Cant do much in this case. Learn from this and dont repeat the same mistake

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