Moneyraam

Bajaj Allianz Shield Plus is a single premium fixed-term unit linked plan. Let us see, point by point, what your insurance agent will tell you and what he won’t.

1. This plan claims to give up to 100% allocation on the premium paid
   What your agent wont tell you is 100% allocation is only applicable if you pay a premium of  2,50,000 or more.  For a premium of less than 50,000 there is a premium allocation charge of 1.5% and for premium of between 50,000 and 2,49,999 it is 1%.
2. This plan gives you a choice of taking a sum assured of 1.1 or 5 times the premium.
   What your agent won’t tell you is that, if you take a sum assured of less than 5 times the premium, your investment will not be entirely eligible for tax rebate under 80C and returns will also not be tax free.
3. This plan gives you an assured return of 170%.
   What your agent won’t tell you is that this guarantee is on the unit price and not on investment. That mean if you bought the units for Rs 10 you are guaranteed to get a price of Rs 17 per unit on maturity. They do not indicate that the mortality and other charges will be charged by cancellation of units and these canceled units are not available on maturity. Also it is important to note that 170% return over a span of 10 years is equal to about 5.4% interest in a bank account.
4. Other thing that your agent won’t tell you is that the plan has policy administration charges of 2% per year for the first 5 years and 1.15% from there on. Paying this administration charges will reduce your investment by 17%.

Taking all these points into account, investing into would be a mistake.

Product brochure of this plan can be found here.

Disclaimer: Writer of this article is neither a insurance agent nor a certified financial planner. Read the product brochure before investing.

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Meta: May 17th, 2010 by Ripul Gupta
Tags:   Bajaj Allianz · insurance · single premium plan · tax benefit · ULIPNo Comments