If you are looking for safety while making that investment decision and also looking

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at the possibility of getting decent returns, you could be tempted to look at the guaranteed-return products offered by insurance companies. Along with the guaranteed returns, the instruments carry an insurance element that could come as an added incentive.

Insurers and investment advisers say the guaranteed-return products are good investment options for risk-averse investors.

Harpal Karlcut, chief executive officer, Canara HSBC Oriental Bank of Commerce Life Insurance, said, “Investors who are risk averse, can invest in these schemes for a long- term horizon because it promises to provide you with reasonable return as investments will be more into the fixed-interest bonds.”

Among the several such guaranteed products being marketed in a big way by respective companies recently are ‘Jeevan Saral’ by the country’s biggest life insurer, Life Insurance Corporation of India (LIC), a product offering guaranteed returns of 6-10 per cent depending on the tenure of the investment. Another life insurance company, Birla Sun Life, offers plans such as a Guaranteed Bachat Plan and Platinum Premier plan that provides an advantage of the highest net asset value (NAV) in seven years. Other life insurance companies such as Kotak Mahindra Old Mutual Life Insurance and Aegon Religare Life Insurance have also floated guaranteed-return plans to tap the market.

The guaranteed plans are all unit-linked insurance policies, better known as Ulips, and are meant to channelise savings to create wealth in the long term.

Yateesh Srivastava, chief marketing officer, Aegon Religare Life, said the guaranteed-return plans are a good product to launch in a market where investor confidence has been shaken. “After the financial turmoil, investor confidence in the markets has still remained lacklustre. Therefore, investors are now looking for returns that will be conservative but provide them with a greater degree of safety. Over a long-term horizon, investors tends to benefit,” said Srivastava, chief marketing officer.

Anil Chopra, group chief executive officer, Bajaj Capital, also said the guaranteed- return products offer the twin benefit of security, as well as returns. “Many insurance companies have started offering these guaranteed schemes to attract customers because the market seems to be choppy and directionless. It provides a sense of security in the minds of the customer because there will be no loss in their portfolio. These schemes will also earn a decent return over a period of time,” said Anil Chopra, group chief executive officer, Bajaj Capital.