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S&P 500 Index - Your Complete Guide to the Capital Guarantee Product

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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!

What are the Key Features of the S&P 500 Index Fund?

Let’s take a deep dive into the primary features of the capital guarantee product -

Currency Options

The S&P 500 Index plan is available in USD currency. 

Term of the Product

Under this plan, individuals can choose their policy terms for 10, 15, or 20 years. 

Issue Age

Depending on the term opted, individuals within the age bracket of 18 years to 60 years can apply for this plan. 

Minimum Contribution

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. 

Guaranteed Values

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%

Loyalty Bonus

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

Grace Period

A grace period of 90 days is provided to all participants before they make their first payment.

Guaranteed Death Benefit

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.

Maturity Benefit

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.

Payment Method

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.

Payment Options

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. 

Option to Decrease Premium

Policyholders can choose to decrease their existing premiums only after the completion of the initial period. Note that a minimum contribution is applied.

Option to Increase Premium

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

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.  

Who is Eligible to Apply for the S&P 500 Index Fund?

Before applying, individuals must check if they meet the following eligibility criteria -

  • Individuals, companies, and other legal entities can apply
  • Up to 2 applicants per policy are allowed
  • US citizens and residents are not allowed
  • Residents of the Cayman Islands cannot apply

What are the Available Payment Methods?

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
Wire Transfer Yes Yes Yes No
Check/ Cashier Cheque Yes Yes Yes No
Debit Card Yes Yes Yes Yes
Credit Card Yes Yes Yes Yes

What is the Termination and Reinstatement Policy?

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.

How to Withdraw and Surrender S&P 500 Index Policy?

Partial withdrawal and full surrender features are available within the S&P 500 Index plan -

Partial Withdrawal

  • After the completion of the initial period, individuals can make a partial withdrawal, subject to maintaining a USD 2,400 surrender value.
  • Even though partial withdrawals are free, they negate the guarantee. 

Full Surrender

  • Existing customers can nominate beneficiaries and contingent beneficiaries.
  • The nominated beneficiaries will then receive the plan proceeds on the death of the plan participant. 

Note: If a policyholder wishes to change the existing beneficiaries, they can do so by sending a written request to the company.  

Key Details Regarding Beneficiaries of the S&P 500 Index

Here are certain key details of the S&P 500 Index plan in the UAE -

  • Nominated Beneficiaries - S&P 500 Index policyholders can nominate their beneficiaries and contingent beneficiaries. These beneficiaries receive the plan proceeds on the unfortunate death of the policyholder. 
  • Changing Beneficiaries - In case plan participants wish to change their existing beneficiaries, they can write and send a request to the company.
  • Plan Documents - Policyholders will receive their plan documents automatically via electronic delivery. As an alternative, they can also request a printed copy of their documents. In addition to that, they can also opt for e-plan documents. However, to receive an e-copy of these documents, participants must pay a fee of $50. This fee covers expedited shipping to the client or general agency.

Note: While individuals can select an additional medium of receiving the plan documents, they cannot opt out of the electronic delivery method.

How to Apply for S&P Index Funds?

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.

What are the Other Investment Options Available in the Market?

Here are some other investment options in the UAE other than capital guarantee plans -

1.) Mutual Funds

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.

2.) Stocks

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.

3.) ETFs

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.

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