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

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Axis Max Life Smart Wealth Plan: A Simple, Honest Analysis!

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 Have Analyzed 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.

How We Have Analyzed Axis Max Life Smart Wealth Plan.

Central idea of this analysis are your wealth and your financial responsibilities in future with increasing costs. We have shown the impact of probable results of this plan on your life; negative or positive.

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

For the preparation of Planyourworld Analysis we have used the calculators available on Planyourworld.com. These are unique in India, they show the real wealth creation after adjusting for inflation, income tax, and the value of maturity amount in today’s term.

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

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: In our analysis its actual rate of return came out close to 5.53% (You can check the actual rate of return you would receive in our Whole Life Insurance Wealth Calculator).

The wealth part gives loss of real wealth, in real terms (after adjusting for inflation). The maturity value is less than a plain FD or PPF. It blocks a big amount of your savings. Has a highly negative impact on your financial future.

The rest of this article walks you through the exact numbers, so you can judge for yourself.

PLANYOURWORLD WEALTH SCORE: 4/10 (loss of wealth)

Promises of Axis Max Life Smart Wealth Plan

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

• Annual premium of ₹1 lakh
• 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.

Axis Max Life Smart Wealth Plan: Analysis of Life Cover.

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

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 life cover and wealth-building 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.

Concept of Life Insurance As per Financial Planning

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: How Much Wealth Can You Build?

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’ll compare the maturity value.

Secondly, we’ll 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).

If you invested the yearly amount of ₹ 93,398 (₹ 1 Lakh Annual Premium) for ten years and held it for another ten years. How much can you get?

Where the money goes	Estimated amount you’ll get back	Wealth Creation
Axis Max Life Smart Wealth Plan at ~5.53%	About ₹22 to ₹23 lakh	About -16% over 20 years

Axis Max Life Smart Wealth Plan based on its own illustration would give you around ₹23 lakh. This makes its actual return close to 5.53% and a wealth creation of about -10%.

Axis Max Life Smart Wealth Plan vs. FDs, PPF and Mutual Funds:

Let’s take a quick overview of wealth creation in the Axis Max Life Smart Wealth Plan vs. other plain and simple options. If you invest the same amount in other places for the same period. We’ll see what amounts you can get after the 20-years period.

Axis Max Life Smart Wealth Plan vs. Fixed Deposits

Where the money goes	Estimated amount you’ll get back	Gap from smart wealth plan	Wealth Creation
Axis Max Life Smart Wealth Plan	About ₹22 to ₹23 lakh	-	About -16% over 20 years
Fixed Deposit (FD) at 7%	About ₹27,16,000	About +₹4,16,000	0%

Fixed Deposits are the most common form of investment for Indian families. In our analysis we found that FDs can give you over ₹27 Lakh. Yes, this is for the same period and investment amount.

Real wealth creation from all the options has been described below.

Axis Max Life Smart Wealth Plan vs. PPF

Where the money goes	Estimated amount you’ll get back	Gap from smart wealth plan	Wealth Creation
Axis Max Life Smart Wealth Plan	About ₹22 to ₹23 lakh	-	About -16% over 20 years
Public Provident Fund (PPF)	About ₹27,57,000 (tax-free, government-backed)	About +₹4,57,000	+1.51 %

Public Provident Fund is another popular category among investors. It is backed by the government, although its tax-free feature doesn’t guarantee wealth creation.

Axis Max Life Smart Wealth Plan vs. Mutual Funds (Commission-based)

Where the money goes	Estimated amount you’ll get back	Gap from smart wealth plan	Wealth Creation
Axis Max Life Smart Wealth Plan	About ₹22 to ₹23 lakh	-	About -16% over 20 years
Mutual Fund regular plan (with commission)	About ₹57,00,000	About +₹34,00,000	+90.94%

This is for a large-cap Mutual Fund plan which has the hidden commission of the distributor included (also called a regular plan). This commission is deducted on a daily basis at the time of NAV calculation. It may give you about ₹57,00,000 for the same investment and period.

(We’ve considered an average 12% rate of return over the whole period).

Axis Max Life Smart Wealth Plan vs. Mutual Funds (No Commission).

Where the money goes	Estimated amount you’ll get back	Gap from smart wealth plan	Wealth Creation
Axis Max Life Smart Wealth Plan	About ₹22 to ₹23 lakh	-	About -16% over 20 years
Mutual Fund direct plan (no commission)	About ₹65,99,000	About +₹42,99,000	+113.35%

This is for the same Mutual Fund scheme without the commission of distributor (also called a direct plan). It could give you about ₹65,99,000 for the same investment and period. Anyone can get this value by learning money management.

(We’ve considered an average 13% rate of return over the whole period).

Even a plain FD or PPF, both very safe and simple, could give you more than Axis Max Life Smart Wealth Plan. An Index Fund of Mutual Fund could give you far more in these 20 years.

Concept of Wealth Creation

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.

Axis Max Life Smart Wealth Plan FAQs: Frequently Asked Questions.

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 of same cost, the life cover is too less to protect a family. The wealth part’s maturity value is less than a 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. Its actual return came out close to ~5.53% in our analysis. 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 Axis Max Life Smart Wealth Plan guaranteed?

Yes, but guaranteed returns don’t necessarily mean wealth is created. An FD 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. This makes its actual return close to 5.53%. Compare that vs. FD or PPF for the same money and same time, and both come out ahead.

7.   Can a Fixed Deposit give a higher maturity amount than Axis Max Life Smart Wealth Plan?

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 Axis Max Life Smart Wealth 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 than Axis Max Life Smart Wealth Plan?

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.