Capital Guarantee Solution
Investing your money can be tricky. With the array of options available today, you may find yourself struggling to identify the perfect investment opportunity that can take care of your wealth-creation and life security needs, without putting your funds at risk.
Capital guaranteed investments are financial tools that specifically address this need by combining the benefits of market linked returns along with capital guarantee – providing the best of both worlds to policy buyers. It can be an excellent option for individuals seeking safe investment opportunities....Read More
: In Unit Linked Policies, the investment Risk in the investment portfolio is borne by the policyholder.
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What is Capital Guarantee?
Under the capital guaranteed investments, the capital is entirely secure throughout the policy period, promising 100% capital returns to the investor and they also benefit from the market's linked return through money invested in funds of their choice which could be debt, equity, balance or a combination.
Before we understand more about how capital guarantee solution works, it is crucial to know more about the components that make up this solution – Max Life Online Savings Plan and Max Life Assured Wealth Plan or Smart Fixed Return Digital Plan. Let’s take a look at how these plans work:
Max Life Online Savings Plan?
Max Life Online Savings Plan(A unit-linked non-participating Individual Life Insurance Plan|UIN:104L098V05) combines the benefits of investment and life insurance under a single plan. This plan provides you with the opportunity to build wealth while also providing financial protection for your life. You invest your money in financial instruments through ULIPs (equity, debt, balanced or a combination of both). The performance of the funds you choose determines your investment returns.Max Life Assured Wealth Plan?
The Max Life Assured Wealth Plan(A non-linked, non-participating Individual Life Insurance Saving Plan|UIN:104N096V04) is a life insurance savings plan which provides guaranteed returns# to policyholders. The guaranteed# benefits allow you to reach your savings goals without enduring market-linked risks. Along with this, it also provides comprehensive death benefit in the unfortunate case of the insured person’s demise.Max Life Smart Fixed Return Digital Plan?
Max Life Smart Fixed Return Digital Plan (UIN: 104N123V03) is designed to make your life investments easier by helping you prepare for your financial goals. The plan gives you the best of both worlds, offering both guaranteed*# tax-free## returns along with the protection of life cover.
How Do Capital Guaranteed Investments Work?
Capital guarantee investments are becoming more popular because of their earning potential. However, as an investor, you would want to know what happens to your hard-earned income when you invest it in a policy. Hence, let’s understand how capital guarantee investments works in detail by considering the case of Mr. Mehra.
Mr. Mehra is 35, working as a government servant. He wishes to save for his dream house by finding the right investment vehicle. As a salaried man, he is worried about investing in market-linked products because of the volatile nature of returns.
He decides to play it safe by investing his money in a Capital Guarantee Solution. He makes a monthly investment of Rs. 20,000 for the next 5 years (premium payment term) and stays invested till the next 10 years(policy term)
Let’s take a look at both components of a Capital Guarantee Solution to understand how it works in both aspects for Mr. Mehra:
Capital Guarantee
Since he invests Rs. 20,000 each month for the first 5 years of the capital guaranteed solution scheme, he will receive 100% of the amount at the age of 45, once the policy period is over. This means, irrespective of the market conditions during the capital guaranteed investment policy, he will receive Rs. 12,00,000 he invested as capital guarantee at age 45. As a result, the policy serves as a savings instrument for investors who wish to keep their money secure for a long time.
Market-Linked Returns
If we consider the rate of market returns @8%, Mr. Mehra will receive Market linked returns of Rs. 17,18,820 or Rs. 9,59,962 @4% at age 55. This means the total benefits will be Rs. 29,18,820 @8% and Rs. 21,59,962 @4%.
Apart from the guaranteed*#returns and market linked returns he will also enjoy life security for the entirety of the policy period. Notably, even though the capital guaranteed solution provides a 100 % capital guarantee*# , investors should consider the opportunity cost before investing to see if it fits with their financial goals. The market-linked returns on capital guaranteed solution will be lower than the returns on a pure ULIP plan for the same amount of money, so investors should keep that in mind.
Please note that the above assumed market-linked rates of returns, 4% and 8%, are only scenarios at these rates after recovering all applicable charges. These are not guaranteed and they are not the upper or lower limits of returns of the Funds selected in your policy, as the performance of the Funds is dependent on number of factors including future investment performance. For more information, please request for your policy specific illustration.
How Are Capital Guaranteed Investments Different?
No one wants to lose their money because of bad financial choices. But, at the same time, it is difficult to pass up an opportunity to grow your corpus. The solution here is to choose an investment tool that addresses such particular financial needs. Unlike regular ULIPs and savings plan, Capital Guarantee Solution (CGS) is a step ahead in terms of innovation in financial products.
Even though ULIPs are in itself an excellent tool for wealth creation and life security, capital guaranteed investments solutions scheme provides even more tailored benefits.The assurance of receiving the initial capital at the end of the policy term is an enormous advantage for investors who have limited risk-appetites. The market-linked returns and life security serve as additional benefits.
What are the Different Benefits of Capital Guaranteed Investments solutions?
Before making your investment decision, it is crucial to understand what you will get in return properly. Here are the benefits associated with Max Life Capital Guaranteed Solution (CGS):
Zero Risk to Money Invested
With Capital Guarantee Solution 1, capital investment guarantee policy, you can be rest assured that 100% of your money is safe with us throughout the policy period. Regardless of the market conditions in the duration, you will receive the initial capital invested in the policy. Hence, the capital guaranteed investments scheme protect your hard earned money from market volatilities.Market-Linked Returns
During the policy period, a portion of the investment will be invested in market-linked instruments. Thus, making the investor eligible to receive any market-linked returns over and above the capital invested, at the end of the policy term.Life Security
Along with providing market-linked returns and guaranteed*# capital return, this policy also ensures that the investor’s life is secured throughout the policy period.
Tax Benefit
When you invest in capital guarantee Life Insurance solutions, you are eligible to receive certain tax deductions on premiums and proceeds under policy benefits. Please keep in mind that all tax deductions are subject to the tax regulations that are prevalent at the time of premium payment or benefit receipt.
Who Should Buy Capital Guarantee Solution Insurance?
Ideally, investors who wish to invest for long term but do not wish to endure the high-risks of market-linked investments might choose Capital Guarantee Solution 1.
At any given time, capital guaranteed investments serve as a risk-free investment choice in contrast to pure market-linked products, which may not provide profitable returns ere there is risk to the invested capital if the market falls. The capital guaranteed investments scheme assures investors' that their money is protected, is returned and assists them in financially securing themselves by protecting their life and their money.
However, there is no rule that suggests only a specific category of investors should go for capital guaranteed investments. It can be a favourable investment choice for you if you fall under the following categories:
- Salaried individuals
- Self-employed individuals
- Individuals looking for long-term investments
- Individuals with low-risk appetites
- Individuals who want life security and wealth creation under a single product
- Individuals who want to secure their money with and need the assurance of guaranteed returns and wealth creation through market linked returns.
You can invest in Capital Guarantee Solution 1 to save up your retirement, provide for your children's education, ensure your spouse's financial independence while you are away, or achieve any other financial objectives.
Even though the returns may be lower compared to the pure market-linked products, you should consider this plan if you have a low risk appetite and capital protection is important to you.
Frequently Asked Questions
The Capital Guarantee Solution by Max Life Insurance is a combination of Max Life Assured Wealth Plan and Max Life Online Savings Plan. Hence, at the time of policy maturity, investors receive a lump sum which is a total of guaranteed sum assured on maturity of Max Life Assured Wealth Plan and Fund Value of Max Life Online Savings Plan.
Investors can choose to pay the premium for capital guaranteed investments solution annually or monthly.
No, there are different premium payment terms depending on the policy period chosen by the investor:
Premium Payment Term (in years)
| Policy Term (in years)
|
5
| 10, 15, 20
|
8
| 16
|
10
| 15, 20
|
The minimum annualized premium payable for the capital guaranteed investments depends on various factors such as the investor’s age, gender, premium payment term of the policy and the policy period.
Disclaimer : Capital Guarantee solution - This advertisement is designed for combination of benefits of two or more individual and separate products named Max Life Online Savings Plan, A Unit Linked Non Participating Individual Life Insurance Plan (UIN: 104L098V04) and Max Life Smart Wealth Plan, a Non Linked Non Participating Individual Life Insurance Savings plan (UIN: 104N116V04). These products are also available for sale individually without the combination offered/suggested. This benefit illustration is the arithmetic combination and chronological listing of combined benefits of individual products. The customer is advised to refer the detailed sales brochure of respective individual products mentioned herein before concluding the sale.
ARN: PCP/CGS/050623
Why Choose Max Life
99.51% Claims Paid Percentage
(Source: Individual Death Claim Paid Ratio as per Audited Financials for FY 2022-2023)
269 Offices
(Source : As reported to IRDAI, FY 21-22)
₹1,174,515 Cr. Sum Assured
In force (individual) (Source : Max Life Public disclosure, FY 21-22)
₹1,07,510 Cr. Assets Managed
(Source : Max Life Public disclosure, FY 21-22)
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