Lock in high returns

Font Size

Print

Feedback

Email

Discuss

: Aviva's single-premium endowment plan promises 7 per cent assured return for the next 10 years
Aviva Life Insurance has launched IndiaBond, a single-premium endowment plan that guarantees maturity benefits. The plan is available from September 22 to October 6, 2008 and offers a compounded return of 7 per cent per annum on maturity.
Say, for instance, if you take this policy for 10 years and pay a single premium of Rs 1 lakh, you will get Rs 1,96,715 on maturity. Anybody in the age bracket of 15 to 45 years can get this policy with a minimum investment of Rs 50,000. There is no limit on the maximum amount of investment. An investor has a choice of two terms — 5 or 10 years.

Tax advantage
Besides guaranteed returns, the plan also gives tax advantage both at the time of investment and at the time of maturity. “All the premiums paid have tax exemption at the time of investment under Section 80C and also at the time of maturity under Section 10(10) D,” says Anil Sahgal, director, strategy and chief investment officer, Aviva Life Insurance.
The policy also offers life cover. In case of the demise of the insured in the first year of the policy, the nominee will get five times the single premium. This multiple, however, will keep decreasing as the years go by. In case of death in the second year, the nominee will get four times the premium paid. By third year, the cover reduces to three times the premium paid, and thereafter, to two times. It will invest 15-100 per cent in debt space in government bonds, infrastructure bonds, corporate bonds, and the rest in equities.

“There are indications that we are at the height of interest rates and rates will start softening again. So it is a great opportunity to lock in high interest rates the tax efficient ways,” says Sahgal.
The policy does not allow partial withdrawals but an investor can withdraw prematurely. “If you are buying this policy, stay till maturity,” says Sahgal.