Promise of guaranteed return plans are appealing, but compare their IRR

A combination of term plan, MFs may be volatile but is likely to get higher returns

Recently, two insurers — Aditya Birla Sun Life Insurance and IndiaFirst Life Insurance —launched their non-linked (traditional), non-participating plans. The former’s plan is called ABSLI Child’s Future Assured Plan, while the latter’s is called IndiaFirst Life Guaranteed Benefit Plan. Both these plans promise guaranteed returns to customers. Whatever is the final value promised to the customer, he will get it, irrespective of what happens in the equity or debt markets.

Experts say since the lockdown began, people have shown a preference for either pure protection (term) plans or for guaranteed-return products. The loss of salary/income in recent months has led