Axis Max Life Smart Wealth Plan Review: Should You Buy It?

Axis Max Life Smart Wealth Plan: A Simple, Honest Check.

This analysis of Axis Max Life Smart Wealth Plan has been prepared for people who have bought or are considering this plan. This Analysis is based purely on promised objectives of the plan and their results. We’ve checked the suitability of this plan with the claimed objectives. Analysis has been done on the direct impact on the future of an investor of this plan. Investors can take better decision without depending only on seller’s promise. You may bookmark this page for future reference.

Why We Analysed the Axis Max Life Smart Wealth Plan

Most people buy a plan because someone they trust told them to. Very few check the real numbers first. Reality is that you have limited savings - your wealth in future will depend on the maturity value of your investments. Invest your savings carefully.

Central idea of this analysis includes your wealth and your financial responsibilities in future with increasing costs. We have shown the impact of probable results of Axis Max Life Smart Wealth Plan on your life; negative or positive.

This is a direct, impact-based, neutral check. We’ve taken the Smart Wealth Plan’s own numbers. We’ve compared them with plain, well-known options like FD, PPF, and Mutual Funds. We’ve also checked the real wealth creation after adjusting for inflation, so you see real value, not just big-looking numbers. We’ve differentiated wealth creation and risk protection for your better understanding.

Axis Max Life Smart Wealth Plan: Quick Summary of the Results.

Firstly, The Axis Max Life Smart Wealth Plan is a: Non-Linked Non-Participating Individual plan. What does that mean?

1.      Non-Linked: Not linked to performance of stock market. It focuses on preserving your money rather than wealth creation.

2.      Non-Participating: Your benefits are limited to what’s promised. You won’t receive any bonuses linked to the company’s profits.

3.      Individual plan: A life insurance plan that covers a single person.

Secondly, The Axis Max Life Smart Wealth Plan promises to help you with two objectives: guaranteed wealth creation, and risk protection for your family.

When we checked both parts on their own, both looked weak.

Risk Protection: The life cover is too less to protect a family. We’ve checked its life cover for the same risk premium vs. term plan.

Wealth Building: The wealth part gives loss of wealth, in real terms (remember this is a non-linked plan). The maturity value is less when compared vs. plain FD or vs. PPF. It is much lower than potential wealth creation vs. Mutuals Funds (both commission and non-commission based) over the same holding period of 20 years.

It blocks a big amount of your savings. Has a very highly negative impact on your financial future.

The rest of this article walks you through the exact numbers based on the prospectus, so you can judge it yourself.

PYW WEALTH RATING * * * * *                              (loss of wealth)

What Axis Max Life Smart Wealth Plan Promises You.

Here is what Axis Max Life Smart Wealth Plan promises, in simple terms with example:

·     Annual premium of ₹1 lac

·      A life cover, or sum assured, of ₹11 lakh

·      You pay premium for 10 years

·      The plan matures after 20 years

·      At maturity, you get back around ₹22 to ₹23 lakh

·      The returns are shown as “guaranteed”

Axis Max Life Smart Wealth Plan: What It Claims to Do.

People usually buy this kind of plan for two reasons:

1.      Risk Protection: People want to protect their family if something happens to them.

2.      Wealth Building: Investors want their money to grow into real wealth for future responsibilities.

Axis Max Life Smart Wealth Plan tries to do both jobs in one product. Let's check how it justifies both.

Is the Life Cover Enough to Protect Your Family?

How much life insurance risk protection does a family need? Insurance is bought to protect family for their entire life -

Wife’s expenses for entire life, education of children, settlement of children, prepayment of loans, in-total dignity of family forever.

Let's see how much protection it gives to your family - after you.

Say your age is 40 and total yearly premium is ₹1,00,000. This is how Axis Max Life Smart Wealth Plan distributes it between both parts:

·         Approximately ₹6,602 goes toward pure life cover, for every ₹ 11 lakh of sum assured (vs. term plan for same risk cover).

·         The rest, about ₹93,398, goes into the wealth-building part (we shall check this in wealth building section).

Now, is ₹11 lakh of life cover enough? Think about it plainly about these situations:

·         How much do you spend annually now?

·         How much loan you have, how will your dependents pay it?

·         Your child’s school or college fees?

·         Your child’s settlement?

·         Your loved one’s day to day life?

Would ₹11 lakh be sufficient for now and with the increasing costs of your responsibilities; if you are not there tomorrow? The honest answer is no.

How Much Life Insurance Does Your Family Really Need?

You will pay for your responsibilities and create wealth by age 55 or 60. You protect your family’s future with insurance in case of untimely death in between.

In this article ahead, we have shown the path, how you can protect your family on your own without depending on advisors. Also, how you can do your own financial planning.

Axis Max Life Smart Wealth Plan: Does It Really Build Wealth?

Now, let's check the wealth creation from Axis Max Life Smart Wealth Plan. Does maturity value mean wealth? NO.

We shall check wealth creation in two parts:

Firstly, we shall compare the maturity value.

Secondly, we shall check the wealth creation, as it should be seen; after adjusting for increasing costs (inflation, future bills of all the responsibilities are rising with inflation).

A Quick Summary of Results.

If you invested the same yearly amount of ₹ 93,398 in other investment products for the same period, here is what you could get:

Even a plain FD or PPF, both very safe and simple, gives you more than this plan. An Index Fund of Mutual Fund could give you far more in 20 years.

What Real Wealth Creation Actually Means.

More wealth means more purchasing power. To be wealthy, you need to create purchasing power in future. So, you create wealth when you get more return than inflation.

Wealth Check with a Practical Example.

Imagine you set a target of ₹11 lakh in today’s value for your child's college after 20 years. That sounds like a good number today. With rising cost of education that costs ₹11 lakh today could cost close to ₹42 lakhs in 20 years (at 7% inflation, but experts suggest considering 10% inflation for education cost).

You are committed to pay for your future goals, should you invest more?

Don't Invest Without Clarity - Respect Your Savings for Wealth.

Do you have unlimited savings? Have you already arranged funds for your future goals? If yes, it hardly matters where you invest. If not, respect it.

It’s the only thing that will take care of your future bills like – college fee of son and daughter, their marriage, your medical bills beyond insurance cover, 20 to 30 years of retirement and many more…

You ask any advisor about your future, and some plan is sold to you. In reality, 90% of people are investing in wrong investment products, without knowing the result.

Your responsibilities can’t be postponed. If you have limited savings to invest, your future depends on maturities you will get in your bank account. It’s a must to take suitable financial decisions for achievement of goals with less savings.

Does this plan suit your situation?

How to Know Which Plan Is Right for You?

Every family has different current situation; they have unique future needs. They need to make suitable investments and financial decisions; as per their age, career, savings, future expenses and all the goals.  As mentioned above, investments must provide college fees of ₹42 lacs, it looks difficult with limited savings. So, suitability becomes more important.

How to check suitability of plans when you have never taken training or education on investing and money management? To plan your own world everyone must get trained. And take responsibility of their own investments.

You need 3 things to identify suitable investments for your family’s better future and wealth:

1.      Skills of money management

2.      Take commitment to become your own financial advisor

3.      Know your current situation and future goals

I have discussed all the three in short.

How Money Skills Help You Grow Real Wealth.

Everyone has his own opinion of money management. Think, how have you made this opinion? Do we know how rich people create passive income with small amounts? It’s the skill of wealth principles.

Skills of creating wealth gives you freedom; you don’t need to depend on others for advice. You start investing with clarity.

In my financial planning career of more than 20 years I have seen people struggling at retirement. It’s due to the reason; they are not aware of all the strategies of wealthy retirement. One can plan early retirement with less savings too.

Money skills allow you to save hidden commissions: Hidden commissions erode approximately 40% of your wealth by the age of 60.

Approximately 20 hours of knowledge can make you wealthy forever.

After learning a question will strike in your mind, why these skills are not shared with common people. With wealth skills you will be able to evaluate your current investments and take suitable decisions, after analysing your situations.

Know Your Requirements and Situation.

Where are you today, financially? How much exactly do you save to invest? Is your money lying in bank accounts? What are the required future amounts for goals? What do your son and daughter want? How much do you need to retire?

What is the suitable plan for you?

A plan that suits your colleague may not suit you at all.

The Best Solution - Become Your Own Financial Advisor.

Where do people fail in investing, usually?

People save, take advice from others. Product sellers and bankers project themselves as advisors. Investing on sellers’ advice is too costly.

It’s simple, easy and highly beneficial to be your own financial advisor.

For this you may start your learning with Planyourworld Wealthy IQ, specially designed by financial planners for the common man. It can be covered in 6 hours.

The beauty of this course is that it works for people with no knowledge of finance.

Already Bought the Axis Max Life Smart Wealth? Do This.

If you already hold Axis Max Life Smart Wealth plan, please do not panic.

Check its suitability in your current situation and for future benefits. For this you may learn money management. Evaluate your other investments too.

Or hire a good fee based financial planner for your complete financial planning. This will show you the right path.

Axis Max Life Smart Wealth Plan: The Final Verdict.

Plans like Axis Max Life Smart Wealth Plan look attractive on the surface. Big numbers, the word “guaranteed,” and a trusted person recommending it, all add comfort.

But lastly, it’s your money so it’s your own responsibility to take right decisions.

If this article helped you look at your own investments a little differently, that is a good first step towards your journey of learning to become your own financial advisor.

Axis Max Life Smart Wealth Plan: Common Questions Answered.

1.    What is the Axis Max Life Smart Wealth Plan?

It's an insurance-cum-investment plan sold by Axis Max Life – it promises to help you with two objectives in the same product: a life cover for your family, and a wealth-building part for your future. Under it, you pay ₹1 lakh a year for 10 years, the plan matures after 20, and you get back around ₹22 to ₹23 lakh at the end.

2.    Is Axis Max Life Smart Wealth Plan an investment plan or an insurance plan?

It tries to be both. But if you check each part on its own, both look weak – when compared vs. term plan the life cover is too less to protect a family. The wealth part’s maturity value is less vs. plain FD. In most cases, mixing the two can compromise both goals.

3.    Who should consider Axis Max Life Smart Wealth Plan?

Answer this simple question first: Have you already built enough life cover and wealth for your goals? If yes, this plan probably won't add much value. If not, check its numbers against your real needs - that's exactly what this article walks you through.

4.    Does Axis Max Life Smart Wealth Plan really create wealth?

Not really. Real wealth means more purchasing power in future, and that only happens when your return beats inflation by a good margin. As you will learn by reading this article, this plan's maturity value is lower than a plain FD or PPF - so it isn't for building wealth.

5.    Are the returns of Axis Max Life Smart Wealth Plan guaranteed?

Yes, but guaranteed returns don’t necessarily mean wealth is created. A fixed deposit guarantees returns too, and could still give you more money at maturity than this plan. It doesn’t account for rising cost of living. A guarantee only means you know from start your approx. maturity amount. It says nothing about whether it’ll be enough for your goals.

6.    What is the expected annual return of Axis Max Life Smart Wealth Plan?

Out of your ₹1 lakh yearly premium for 10 years, about ₹93,398 goes toward saving for maturity value. This maturity value would be between ₹22 to ₹23 lakh for a holding period of 20 years. Compare that vs. FD or vs. PPF for the same money and same time, and both come out ahead.

7.    Can a Fixed Deposit give a higher maturity amount?

Yes, they can. The same ₹93,398 a year, in a plain FD at 7%, grows to about ₹27,16,000 - more than this plan promises, with no long lock-in and no hidden life-cover cost eating into your returns.

8.    Can PPF outperform this plan?

It can, and by a decent margin. The same amount in PPF could grow to roughly ₹27,57,000, tax-free and government backed. More money, more safety, more peace of mind.

9.    Can mutual funds create much higher wealth?

Yes, they can. Their performance is linked to the market, unlike this plan. A commission-based mutual fund plan could give you around ₹57,00,000; a direct plan, with no commission, could get close to ₹65,99,000. These figures are as per market experts and historical data. That's nearly three times what this plan promises, for the same yearly savings over the same 20 years.

10. Does inflation reduce the real value of the maturity amount?

It does, and this is the part most people miss. ₹22 to ₹23 lakh of maturity could sound like a big number today, but costs keep rising every year too. Let’s say you have a goal worth ₹11 lakh today, e.g. your child's college fee. In 20 years, it could cost close to ₹42 lakh, assuming 7% average inflation. So, the real question isn't how big the number looks. It's how much that number can actually pay for when you reach that goal.