Today’s newspaper carried a nice attractive advertisement about Bajaj Allianz Life Guaranteed Pension Goal. The eye-catching word guaranteed pension goal is a trap to fool individuals to buy a product that gives a very low return. This policy is also a Non-Linked, Non- Participating, Deferred & Immediate Annuity plan which means there will not be any bonus added and also not linked to stock-market. One would think it’s great to save using such a product but let’s dive deep into the product offering to know if it’s a goal or a trap. There is also a mention that no medical and a lifelong income is also offered by this product.
Bajaj Allianz Life Guaranteed Pension Goal Review :
Key Features of Bajaj Allianz Life Guaranteed Pension Goal is a Non-Participating, Non-Linked, Individual/Group General Annuity Savings/Pure Risk Plan. Main features of this plan
- Guaranteed income throughout life: Your annuity amount is guaranteed at policy inception and is paid regularly as per your choice and need (Yearly/Half-yearly/Quarterly/Monthly)
- Wide range of Annuity Options: Choose from a wide range of Annuity options to meet your Lifestyle goals
- Choose when your second innings starts: Annuity starts immediately or after a few years (from policy inception) as per your choice and need.
- Ensure your family’s lifestyle goals are met even when you are not around: Option to take Joint life annuity with 50% or 100% annuity payable to your spouse after your death.
- Return of cost (Purchase price): Option to receive Return of Purchase Price (ROP) on death or as Survival Benefit
Annuity Options available under the Plan
One can choose any of the following Annuity options at inception.
- Immediate Annuity: Pay a lump sum and the Annuity pay-out will start immediately, as early as next month, depending up on the Annuity frequency option chosen by you at inception.
- Deferred Annuity: Pay a lump sum or regular/limited Premium and Annuity pay-out will start after the deferment period, chosen by you at inception.
As per illustration, male age 50, a premium term taken is 10 years. Rs. 5.13 Lakhs is the premium and after 10 years they are giving Rs.4 Lakhs as an annuity, so the total premium paid in 10 years is Rs.51.33 Lakhs for which 4 lakhs is the taxable annuity received. The internal rate of return works out to be 5%
| Paid/return | Year | Age |
| -513000 | Year 1 | 50 |
| -513000 | year 2 | 51 |
| -513000 | Year 3 | 52 |
| -513000 | Year 4 | 53 |
| -513000 | Year 5 | 54 |
| -513000 | Year 6 | 55 |
| -513000 | Year 7 | 56 |
| -513000 | Year 8 | 57 |
| -513000 | Year 9 | 58 |
| -513000 | Year 10 | 59 |
| 400000 | Year 11 | 60 |
| 400000 | Year 12 | 61 |
| 400000 | Year 13 | 62 |
| 400000 | Year 14 | 63 |
| 400000 | Year 15 | 64 |
| 400000 | Year 16 | 65 |
| 400000 | Year 17 | 66 |
| 400000 | Year 18 | 67 |
| 400000 | Year 19 | 68 |
| 400000 | Year 20 | 69 |
| 400000 | Year 21 | 70 |
| 5130000 | Year 22 | 71 |
| 5% | IRR |
Wait………..This return is not tax-free as this is not an insurance product, the annuity is taxable based on the present income. Post-tax return can go down to 3.5% if one is under 30% Tax slab. Stay away from such products.
One should stay away from such low-yielding products which is taxable. Annuity products must be purchased from a reputed insurance company that gives the highest rate and also has lower surrender value. As there is nothing in terms of insurance, no medical checkup is required and this is used as a highlight to sell this product. Note: This is not an insurance product but it’s an annuity and a medical checkup is not required as there is no risk cover here.
Choose the option carefully: There are several options under this scheme and avoid choosing one which has the highest return as that involves your whole investment non-refundable. This means if someone invests 10 Lakhs and some risk happens, no amount will be paid to the nominee. This is a trick used to show high returns as the principal amount is not refundable.
I hope you found this article on Bajaj Allianz Life Guaranteed Pension Goal Review helpful, and do share your thoughts in the comments section below.
Note: Illustrations are based on advertisement. Do read official product information leaflet or brochures to verify the same. Always consult a qualified advisor to understand the fine prints of such products. An advisor will say both pros and cons of the product. Our expert can be reached at 7200039282 for queries on any such product. You can also send your queries by Whatsapp to 7200039282
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