Many believe that one of the worst part of financial planning is to invest in ULIPs. These plans comes with high allocation charges which would eat away the capital. One might not even get their capital if investing in ULIPs. Max Life has launched Smart Capital Guarantee Solution plan that provides guarantee 100% capital guarantee benefit and market linked returns. What are the key features of Max Life Smart Capital Guarantee Solution? What is the eligibility to take Smart Capital Guarantee Solution? Should you invest in Max Life Smart Capital Guarantee Solution?
Key Features of Max Life Smart Capital Guarantee Solution
Max Life has launched this plan which is a combination of its existing plans i.e. Max Life Smart Wealth Plan and Max Life Flexi Wealth Advantage Plan.
This is comprehensive plan that comes with death benefits and maturity benefits.
This is a life insurance savings plan where the returns are market linked.
It provides flexible premium payment options.
It provides benefits by way of lumpsum or regular income for defined period or whole life etc., depending on the plan chosen.
This plan provides income tax benefits u/s 80c for the premiums paid up to Rs 1.5 Lacs in a financial year and maturity is tax free u/s 10 (10D).
Individual who are between 18 years to 50 years are eligible to take this plan.
What are different combinations in Max Life Smart Capital Guarantee Solution?
This plan comes with 5 different combinations.
1) Milestone Solution (10 years)
2) Milestone Solution (12 years)
3) Milestone Solution (15 years)
4) Whole Life Solution
5) Regular Income Solution
For plan 1 to 3, one need to pay premium for only 5 years and after policy term, policy holders would receive 100% of capital + market linked returns.
For plan 4, premium payment term is 8 years and policy would be there for whole life i.e. 100 years of age. Policy holders would get 100% capital by way of income for 8 years and they can do partial withdrawals till 100 years of age.
For plan 5, premium payment term is 6 years only and one can get regular income for 30 years after this period.
How does Max Life Smart Capital Guarantee Solution work?
Here are 3 illustrations that can help you (click them to enlarge).
Why to invest in Max Life Smart Capital Guarantee Solution?
This is a comprehensive plan. It is a life insurance savings scheme where it provides life risk coverage and also helps to grow savings.
This policy provides 100% capital guarantee. You need not worry about safety of your investments.
This is a good scheme for low risk investors who want to invest in disciplined manner and looking for safety.
Why not to invest in Max Life Smart Capital Guarantee Solution?
This policy provides only return of capital. It does not provide any guarantee on returns on such schemes.
ULIPs in general does not guarantee returns. The returns are market linked and can generate between 4% to 8%. This plan is a combination of life insurance and ULIP, hence we can assume similar returns in this scheme too.
Such schemes provide returns below bank FD interest.
Max Life Smart Capital Guarantee Solution – Should you invest or avoid?
This plan is a combination of two existing plans of Max Life Insurance. While it indicates 100% guaranteed return of capital, it does not guarantee any returns. Such market linked plans can provide low returns compared to other investment options available and would not beat inflation.
Low risk investors who want to invest in regular / disciplined way, however looking for safety of their capital can invest in such schemes. If you are aggressive investors, you can avoid this scheme and invest in mutual funds which are better.
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