ULIPs and mutual funds are two popular yet distinct investment avenues, each coming with its unique set of benefits and drawbacks. Know which one is better for your individual needs and preferences.
Invest smart today for a better tomorrow
Over the years, significant developments have taken place in the financial sector globally. Nations across the world have witnessed a dynamic shift in investment patterns, as global capital flows increasingly gravitate towards emerging markets.
This considerate transition has brought about a host of opportunities and challenges, ultimately reshaping the economic landscapes of the financial world. With this, multiple investment products have immensely gained popularity in recent days. One such product is the S&P 500 Index introduced by Investors Trust. It is a capital guarantee plan.
Now the question arises - what exactly is a capital guarantee plan? Well, this type of plan specifically provides investors with the assurance that their initial investment will be protected against losses. By investing in a capital guarantee fund, the investor's principal amount remains safeguarded even if the underlying investments incur losses, as the fund company absorbs those losses.
For more information regarding the S&P 500 Index Fund, jump onto further sections of this article!
Let’s take a deep dive into the primary features of the capital guarantee product -
The S&P 500 Index plan is available in USD currency.
Under this plan, individuals can choose their policy terms for 10, 15, or 20 years.
Depending on the term opted, individuals within the age bracket of 18 years to 60 years can apply for this plan.
Individuals are required to make a minimum contribution of a minimum of USD 2,400 annually. It’s worth noting that monthly payment options are only available if paid via credit cards or direct debit.
Participants receive guaranteed returns with these plans as a percentage of the sum of all contributions at the end of the term -
|10 Year Term||100%|
|15 Year Term||140%|
|20 Year Term||160%|
Customers receive their loyalty bonuses as per the following schedule -
|7.5%||Of the premium for years 1 through 10, credited at the end of year 10|
|7.5%||Of the premium for years 11 through 15, credited at the end of year 15|
|5%||Of the premium for years 16 through 20, credited at the end of year 20|
A grace period of 90 days is provided to all participants before they make their first payment.
In case of the unfortunate death of the participant, the standard amount payable will be 101% of the account value. Note that the benefit will terminate and won’t be reinstated if the necessary premiums are not paid within the grace period.
The policyholders are notified when their plans reach maturity. They will then need to provide instructions to the company related to the disbursement of funds.
Policyholders can choose to pay their premiums via different modes such as wire transfer, credit card, debit card, or cashier cheque. They can also change their payment method at any time and frequency without having to pay any fees.
Under this plan, individuals have flexible premium payment options, i.e., they can choose to pay their premiums on a monthly, quarterly, semi-annually, or annual basis. Policyholders can also pre-pay for future premiums due, up to three annual payments per plan year.
Policyholders can choose to decrease their existing premiums only after the completion of the initial period. Note that a minimum contribution is applied.
Individuals can also choose to increase their premiums by opting for add-on plans on their basic plan. Depending on the add-on plan/ plans that they select, the premium amount can rise up by a minimum of USD 2,400 per annum.
Accumulation units are completely allocated when premium payments are made after the initial period. These are then used to fund the monthly policy fee and structure fee over the policy duration and other corresponding charges, if any.
Before applying, individuals must check if they meet the following eligibility criteria -
Check out the table below for the different types of payment methods available for the S&P 500 Index fund -
|Method of Payment||Annually||Semi-Annually||Quarterly||Monthly|
|Check/ Cashier Cheque||Yes||Yes||Yes||No|
In case the insured individual fails to make the premium payments during the initial period of the policy tenure or the plan runs out of accumulation units, the policy will lapse. In such a situation, one can make a request to reinstate the policy within 2 years after the lapsed date, which is subject to the payment of past-due premiums and charges.
Partial withdrawal and full surrender features are available within the S&P 500 Index plan -
Note: If a policyholder wishes to change the existing beneficiaries, they can do so by sending a written request to the company.
Here are certain key details of the S&P 500 Index plan in the UAE -
Note: While individuals can select an additional medium of receiving the plan documents, they cannot opt out of the electronic delivery method.
Those interested in availing of the S&P index fund plan can simply apply through our digital platform policybazaarinsurance.ae.
The process is fairly simple - visit the website and choose ‘Capital Guarantee Plans’ under the Investment drop-down. Fill out the lead form accurately to get directed to the quotes page. Once done, select the relevant product and apply by following the on-screen instructions. Upon successful submission of the form, one of our representatives will get in touch with you soon to help you with the remaining process.
Here are some other investment options in the UAE other than capital guarantee plans -
A mutual fund is a type of investment vehicle that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. Managed by professional fund managers, mutual funds offer individual investors the opportunity to participate in a diverse range of assets without requiring significant capital at a time.
Stocks are fundamentally investment products that showcase the company’s ownership. Once an investor or individual purchases a stock, they become a shareholder, entitling them to a portion of the company's assets and earnings. Stocks are traded on stock exchanges, where their prices fluctuate based on market demand and the company's performance.
An Exchange-Trading Fund (ETF) is a type of investment product that pools money from multiple investors to buy a diversified portfolio of bonds, stocks, and other assets. These funds are then traded on stock exchanges, which further allow investors to purchase or sell shares throughout the trading day at market prices. With their flexibility and potential for long-term growth, ETFs have become a popular choice for those seeking diversified and cost-effective investment solutions.