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Market-linked investments with capital guaranteed feature: Are you ready to be blown away

  By : , Delhi, India       10.2.2016         Phone:-          Mail Now

Why do you look for any investment plan? There must be some preplanned goals which you desire to achieve with the accumulated money. The reasons might be infinite but there are some common goals for almost every individual, for instance, for kidís future needs like education, business or marriage, for the hard-unforeseen time, for an easy life after retirement, for medical emergencies, etc. Obviously, you look for various investment options available online that can help to fulfill your dream with the highest yield over the period.

To meet long-term objectives, it is advised to invest smartly in market-linked investment plans which offer double benefits in the form of high returns and insurance coverage. However, as these plans are subject to ups and downs of the market, risk-averse investors maintain a distance from them. To combat this problem, here comes the market-linked investment plans with capital guaranteed feature. These plans give high returns by investing a portion of your premium in equities, while also giving the dual benefits of capital protection and life cover. In case of adverse market scenario, the sum of all paid premiums is returned to the policyholder. In some cases, it is 101% of all the premiums paid by the policyholder. It says, under no circumstances, you get lesser than your invested amount. In addition, insurance is also offered to protect the family from a sudden demise of the policyholder.

These plans offer the benefit of capital appreciation, while maintaining a balance between safety and high returns. Such guaranteed plans are ideal for people who want to buy market-linked investment plans but ultimately purchase traditional plans due to their apprehensions about the market. Now these investors are happy about the capital guarantee as it gives them a sense of comfort.

How market-linked investment plan with capital guaranteed feature works?

In a conventional ULIP, the value of the invested premium is fluctuated, depending on the market conditions. The market-linked investment plans with capital guaranteed feature limit such risk and at the same time, any market bonuses are passed on to the policyholder.

To illustrate, letís assume out of the total premium of ICICI Pru Guaranteed Wealth Protector plan, the insurer has invested Rs 20,000. However, due to the market volatility, the investment value gets reduced to Rs 18,000. Here in this case, the policyholder will be protected from the downside risk and the insurer will pay 101% of the sum of all the premiums paid on maturity. Similarly, if there will be an increase in the investment value, the same will be paid to the policyholder.

On maturity of the ICICI Pru Guaranteed Wealth Protector, the policyholder will be entitled to get (1), (2), whichever is higher.

Fund value

Assured Benefit (101% of the sum of all premiums paid)

On death of the policyholder during the tenure of the policy, the nominee will be entitled to get (1), (2) or (3), whichever is higher.

Sum Assured

Minimum Death Benefit (105% of the total premiums paid)

Fund Value

Benefits of investing in market-linked investment plans with capital guaranteed feature

High Return: The pool of your money is invested in the equity market so obviously you get the high equity link return, which is the prime benefit of investing in the equity market.

Tax Benefits: Often people buy a plan that not only provides good returns but also offers tax benefits. You will not get disappointed as market- linked investment with guaranteed return also provides tax benefits on the premium paid and the maturity benefits as per the Income Tax Act 1961.

Death Benefits: The plan provides great investment opportunity but the main essence of any insurance plan i.e. death benefits are also intact. In the case of death during the plan, the nominee will get either the fund value or the sum assured or the minimum death benefits whichever is higher.

Loyalty Additions: Most of the insurers offer extra units as loyalty additions at the end of the policy year, usually starting from the sixth policy year.

To make a right investment, you need to act prudently. The high returns of the equity markets attract numerous investors but the risks associated with them disappoint people many times. People then move towards debt market for investment but again the low return does not provide real appetite of investment. Insurance and tax benefits are the other factors that people look while planning for the investment. The market- linked investment plans with capital guaranteed is a win-win investment plan for any investor. Further, you can buy these plans online also. Like, ICICI Pru Guaranteed Wealth Protector plan can be bought online without stepping outside your home. It is like buying one of the greatest investment plans while sipping coffee at your bedroom under the blanket.

Think wisely, plan wisely and invest wisely. After all, only you know better how much hard effort you do every day to earn every single penny for your familyís comfort.

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