Capital Guarantee Plan Meaning, Types and Eligibility
Investing in market-linked products can be intimidating, especially for first-time investors. A capital guarantee plan offers a solution to this fear by securing your principal amount while also giving you the opportunity to earn market-linked returns.
A capital guarantee solution plan is a unique hybrid investment that combines features of Unit Linked Insurance Plans (ULIPs) and guaranteed return plans. It is designed to protect your investment while enabling capital growth, making it a perfect choice for cautious investors.
What is a Capital Guarantee Solution Plan?
The capital guarantee plan combines the advantages of guaranteed return products with the market exposure offered by ULIPs. Around 50% to 60% of your investment goes into low-risk guaranteed return instruments, and the remaining portion is invested in equity-oriented funds to generate market-linked returns.
This ensures the premium paid is 100% secured, making the capital guarantee solution an attractive long-term option, especially in low interest rate environments. It allows investors to benefit from market highs while insulating the principal from market downturns.
Various Capital Guarantee Plans
Below are some popular capital guarantee plans in India offering financial security and investment growth:
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Bajaj Allianz Life Guaranteed Income Goal: A non-linked, non-participating endowment life insurance plan offering life cover extension, income benefits, and lump sum payouts. Tax benefits under Section 80C and 10(10D) apply.
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Canara HSBC Life Insurance Invest 4G: Offers 8 fund options with portfolio management strategies like safety switch, auto-rebalancing, return protector, and systematic transfer. Includes life, care, and century cover options.
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Edelweiss Tokio Life Wealth Secure +: Features 7 fund choices, partial withdrawals post 5 years, loyalty additions, and built-in life insurance benefits.
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HDFC Life Capital Shield: Guarantees 100% of premium invested with market-linked returns. Offers a death benefit of 105% of total premiums paid and loyalty additions from the 6th policy year.
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HDFC Life Click 2 Wealth: Provides 11 fund options, 101% fund allocation for the first 5 years, and premium waiver benefits on proposer’s death. Suitable for retirement planning due to regular withdrawal features.
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ICICI PruSignature: Offers 4 portfolio strategies, death and maturity benefits, and partial withdrawals after 5 years. Policy term extensions are allowed before maturity.
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SBI Life eWealth Insurance: Offers 3 fund choices and an automatic asset allocation tool. Policy terms range from 10 to 30 years, with annual or monthly premium options.
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Tata AIA Life Insurance Fortune Pro: Provides 11 fund choices, loyalty additions starting from the 11th policy year, and long-term policy options up to 40 years.
Does a Capital Guarantee Plan Help in Long-Term Planning?
Yes, a capital guarantee plan is ideal for long-term financial planning. While short-term investments are vulnerable to market volatility, long-term capital guarantee solutions allow you to average your investment cost over time and benefit from equity growth.
These plans offer flexible terms ranging from 10 to 40 years with premium payment terms of 5, 7, or 12 years. For long-term goals such as retirement or education, investing in a capital guarantee solution for at least 10 to 15 years is recommended for better wealth creation and capital safety.
Eligibility Criteria for Capital Guarantee Plans
Eligibility for a capital guarantee plan depends on several factors such as age, policy term, premium amount, and investment duration. Although each plan differs in specifics, the common minimum entry age is 18 years. The maximum age and other parameters vary across providers.
Should You Invest in a Capital Guarantee Solution Plan?
Yes, especially if you are a risk-averse investor looking for market participation with capital safety. A capital guarantee plan helps secure financial goals such as retirement, child education, or family protection. It also acts as a cushion during economic downturns, preserving your invested capital.
These capital guarantee solutions offer life coverage, fixed returns, and minimal exposure to market risks. They ensure stable growth while protecting your financial future.
Conclusion
A capital guarantee solution plan is a wise choice for investors seeking low-risk, long-term investment opportunities with assured returns. It eliminates market-related anxieties while offering decent returns over time. Unlike pure equity-based products, these plans provide a balanced approach to investment and security.
Explore trusted solutions like those from Fincrif and lay the foundation for a financially secure future with a capital guarantee plan that aligns with your goals.
