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Should I Invest in Bajaj Allianz Ace Plan for Retirement?

Ramalingam

Ramalingam Kalirajan  |9699 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 15, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Prashanth Question by Prashanth on Apr 15, 2025Hindi
Money

Sir is bajaj Allianz ace plan good for retirement?

Ans: It is always good to plan early for retirement. You have taken an important step by considering this.

Let’s now evaluate the Bajaj Allianz Ace plan in detail.

What Type of Plan Is This?

This is a ULIP-based retirement product.

It mixes investment with insurance.

Your money is split into charges, investment, and insurance cover.

The returns are not guaranteed.

It depends on the market and fund chosen.

How It Works for Retirement?

You pay premiums regularly.

Part of the money is invested in equity or debt funds.

The rest goes towards charges and insurance cover.

After 10–15 years, you get the fund value.

You can convert it into regular pension or take the full value.

Are There High Charges? Yes.

This plan has many layers of charges.

Premium allocation charge: Deducted before investing.

Fund management charge: Yearly deduction on fund value.

Policy admin charges: Fixed deduction regularly.

Mortality charges: Cost for life insurance cover.

Switching and partial withdrawal charges may also apply.

All these reduce your actual returns.

Transparency Is Not Clear

You won’t know how much is going to each part.

The illustration shows assumed returns of 8%.

Real return after charges could be 4% to 5%.

This is not enough to beat inflation in the long run.

Insurance + Investment Is Not a Good Mix

Insurance should be bought only for protection.

Investment should aim for growth.

Mixing both results in neither goal being achieved fully.

Instead, pure term insurance plus mutual funds work better.

More clarity, control, and better returns.

Returns Are Market-Linked, Not Guaranteed

Many people assume returns are fixed.

But ULIPs are not fixed-return products.

They are like mutual funds, but with extra charges.

There are no bonuses or loyalty additions that truly add value.

Lock-in period of 5 years.

Early surrender comes with heavy loss.

Tax Benefit – But Don’t Get Misguided by That

Yes, premiums are tax-free under 80C.

Maturity proceeds are tax-free if yearly premium is less than Rs 2.5 lakh.

But tax saving should not be the main goal of any investment.

Low-return products with tax savings are not wise.

Better to invest for real growth and pay reasonable tax later.

What Are the Better Alternatives?

Let us look at more efficient options. These offer more growth, safety, and flexibility.

SIPs in actively managed mutual funds.

Choose large cap, flexi cap, and hybrid equity funds.

Start small and increase with time.

Returns may go up to 10% or more in the long term.

Managed by experts with better fund performance tracking.

Regular funds through a Certified Financial Planner provide right guidance.

Long-term wealth creation is more likely here.

Avoid Index Funds or ETFs

Index funds only copy the index.

No expert decision-making.

They do not protect in falling markets.

Actively managed funds adjust the portfolio based on market.

More suitable for child education and retirement goals.

Avoid Direct Funds Without Guidance

Direct funds seem cheaper.

But no expert support is available.

You may choose wrong schemes or exit at wrong time.

Regular funds through a Certified Financial Planner are better.

You get personalised asset allocation.

Goal planning is better aligned.

Mistakes are fewer, and discipline is higher.

360-Degree Planning for Retirement

Let us now connect the dots for your retirement.

Decide your retirement age and lifestyle.

Calculate monthly income needed after retirement.

Estimate inflation and life expectancy.

Then work backward to know how much to invest now.

Split money between equity, debt, and short-term funds.

SIPs are best for long-term consistency.

NPS can be added for additional benefit.

But even NPS must be reviewed every 2 years.

Avoid depending only on one plan like Bajaj Allianz Ace.

Diversify and regularly review your plan.

What If You Already Have This Plan?

If you have already paid 5 years, consider stopping further premiums.

Do not surrender before 5 years.

If it is new and just started, better to stop now.

Consider switching the maturity amount to mutual funds later.

Use SIPs and STPs (systematic transfer plans) to move money wisely.

If confused, get help from a Certified Financial Planner.

What You Can Do Now

You can start with this approach instead of the ULIP.

Invest Rs 10,000 to Rs 15,000 monthly in mutual funds.

Use a mix of equity and hybrid funds.

SIPs in regular funds via a Certified Financial Planner.

This builds good wealth over 15–20 years.

Link investment to your retirement and child’s future goals.

Add term insurance for life cover separately.

Avoid policies that bundle investment and insurance.

Track growth every 6 months.

Adjust allocation as per market condition and goal timeline.

Final Insights

The Bajaj Allianz Ace Plan looks attractive due to brand and packaging.

But the plan is expensive, opaque, and inefficient.

Returns are uncertain and charges are high.

You don’t get flexibility or clarity.

For long-term goals like retirement, it is not ideal.

Better to go for mutual funds via monthly SIPs.

Keep life insurance separate and pure.

Mixing goals and tools never works well.

You have time and a clear goal.

Make use of it with the right plan and guidance.

Always keep things simple and separate.

That will help you reach financial freedom faster.

For any help, consult a Certified Financial Planner.

They will give a complete and balanced plan.

It keeps your future safe and peaceful.

Don’t run after packaged products. Run after your goals.

That is the true smart step.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Asked by Anonymous - May 17, 2024Hindi
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Iam investing 28000 into sip and 50000 per year for Bajaj wealth scheme, I have term insurance of 50 lakhs and 10.5 lakh corpus into my funds I want to retire in my 50 ( my age is 35 )
Ans: Evaluating Your Current Financial Strategy
It's impressive that you are actively investing towards your retirement goals. You have taken significant steps with your SIPs and insurance. However, to optimize your financial strategy, some adjustments can be made to better align with your goals of retiring by 50.

Assessing the Bajaj Wealth Scheme
The Bajaj wealth scheme combines insurance and investment. However, these plans often have high fees and lower returns compared to mutual funds. Surrendering this policy and redirecting the funds into mutual funds can be more beneficial. Mutual funds typically offer higher returns due to lower costs and professional fund management.

Benefits of Surrendering Insurance-Cum-Investment Policies
Insurance-cum-investment policies often underperform compared to dedicated investment products. They have high charges and lower flexibility. By surrendering the Bajaj wealth scheme, you can avoid these high fees. This move will allow you to invest in more efficient financial instruments.

Redirecting Funds to Mutual Funds
Redirecting your funds from the Bajaj wealth scheme to mutual funds can significantly boost your retirement corpus. Mutual funds offer diversified investment options, managed by financial experts. They provide the potential for higher returns, which is crucial for reaching your retirement goals.

Increasing Your SIP Contributions
Currently, you are investing ?28,000 per month in SIPs. To retire comfortably by 50, consider increasing this amount annually. Incremental increases, aligned with your income growth, can leverage the power of compounding. This strategy can greatly enhance your retirement savings over time.

Advantages of Actively Managed Mutual Funds
Actively managed funds have a professional fund manager making strategic investment decisions. They can adapt to market changes, aiming to maximize returns. This flexibility and professional management can lead to better performance compared to index funds.

Importance of Regular Portfolio Review
Regularly reviewing your portfolio is crucial. Market conditions change, and your investment strategy should adapt accordingly. Consulting with a Certified Financial Planner (CFP) ensures your investments remain aligned with your retirement goals. A CFP can provide tailored advice based on market trends and your personal financial situation.

Enhancing Term Insurance Coverage
Your term insurance coverage of ?50 lakhs is a good start. However, as your financial responsibilities grow, consider increasing your coverage. Adequate term insurance ensures financial security for your family in case of unforeseen events.

Building an Emergency Fund
Ensure you have an emergency fund covering 6-12 months of expenses. This fund provides financial security and prevents you from withdrawing your investments during emergencies. Maintaining this fund is crucial for financial stability.

Diversification and Risk Management
Diversification reduces investment risk. Spread your investments across various sectors and types of funds. This strategy ensures that potential losses in one sector do not significantly impact your overall portfolio. Actively managed funds offer this diversification and professional management.

Avoiding Common Investment Pitfalls
Avoid emotional investment decisions and chasing high returns without understanding the risks. Stay focused on your long-term goals and maintain a disciplined investment approach. Regular consultation with a CFP can help you stay on track.

Conclusion: A Balanced Approach
You are on the right path to achieving your retirement goals by 50. Surrendering the Bajaj wealth scheme and redirecting those funds into mutual funds can enhance your portfolio’s performance. Increasing your SIP contributions, maintaining adequate insurance, and building an emergency fund are crucial steps. Regularly review and rebalance your portfolio with professional guidance. Your proactive approach and disciplined strategy will help you achieve financial independence.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Hello sir. I have got SRM ktr cse specialistions and other SRM core and specialisations... last day for choice filling is tomorrow...there is only one option for choice ... im planning to choose cse ktr .. my rank is 2778.... Phase 3 what if i dont get whatever i choose rn it is showing in case the seats arent available or fulled .. so what can I do ?
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Recommendation: Float your Core CSE KTR choice to remain in subsequent allotment cycles, confirm with the counselling office about expanding your preference list to include allied CSE specializations, and monitor seat-matrix updates daily. All the BEST for Admission & a Prosperous Future!

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Nayagam P

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Career Counsellor - Answered on Jul 12, 2025

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Mere beta ka JEE percentile 92.78 hai he has scored 93% in pcm he wants to do btech cse suggest a college plz
Ans: Surinder Sir, With a 92.78 percentile in JEE Main and 93% in PCM, your son is well positioned for admission to leading private engineering institutes across Northern India offering B.Tech CSE. These colleges combine strong accreditations, modern computing laboratories, active placement cells, industry collaborations, and supportive campus environments. Recommended options include Amity University Noida, SRM Institute of Science and Technology Kattankulathur (Chennai main campus via Phase 3 SRMJEEE), Manipal University Jaipur, Bennett University Greater Noida, Galgotias College of Engineering & Technology Greater Noida, Chandigarh University, Sharda University Greater Noida, Chitkara University Punjab, Lovely Professional University Jalandhar, and UPES Dehradun—all of which typically close CSE admissions around the 90–95 percentile bracket, ensuring solid placement outcomes and academic rigor.

Recommendation: Prioritize Amity University Noida for its proven 90–95 percentile cutoffs and robust corporate partnerships; next, choose SRM KTR for its elite CSE cutoffs up to rank 5 000 and 90–95% placement consistency; then consider Manipal University Jaipur for its Institute of Eminence status and MET-based CSE admissions around 33 000–38 000 ranks. All the BEST for Admission & a Prosperous Future!

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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