Please note - We don't provide any service for Highest NAV guarantee plans and traditional insurance plans.
We all love this amazing word “Guarantee” if something comes with guarantee we likes to purchase it. Now a days, there is a new “Innovative” product in the market. They’re called Highest NAV Guaranteed Plans .These products are in, after the recent crash of equity market, and companies are taking advantage of the fact that Investors are looking for some kind of a safe investment equity product. Hence, they’ve launched these Highest NAV Return ULIP’s which confuse investors and make them believe that they are going to get the highest return from the Stock market in long run – generally the tenure is 7 yrs, for these plans . When we looks at how Highest NAV Guarantee ULIP’s work, and you will understand, that how any Guarantee product can be created by simple methods . The simple catch, here is that these schemes, are structured in such a manner, that the collected funds can be invested either in equities, debt instruments or in money-market instruments in proportions varying from zero to 100%.
We all want to get great returns, but we have to shed this belief that, companies come up with plans specially for us. All the companies out there exist to earn money, and their motive behind every product is to make money, & generate profits for their companies, so that they keep their shareholders happy. So next time a product like this comes up , you have to control your emotions before getting in and first investigate. The worst part of this whole business, (of guaranteed highest NAV products) is the timing and how it gives naive investors, high illusions about the product. Products like these, take major advantage of psychology of the ordinary saver. Many Investors in smaller towns have broken their Fixed Deposits and taken some loan to invest in products like these.
Whose should invest in these products?
If you are looking for modest returns, like 8-10%, you can invest in these policies. The return of these policies may be high in the beginning, if market does well; but when market starts performing badly, the returns can take a hit and then be in a tight range. Your NAV will be protected for sure, but the returns wont be, since over time the CAGR return will go down. Remember, if your NAV is 10 today and you highest NAV is 20, for a 2 year period, the return is a good enough 41%, but by the 4th year it’s just 18.9% and by the end of 7th year it’s a measly 10.4%. So what you really need, is protection of returns, not the NAV which is just a fixed number.
Please note - We don't provide any service for Highest NAV guarantee plans and traditional insurance plans.
Whose should invest in these products?
If you are looking for modest returns, like 8-10%, you can invest in these policies. The return of these policies may be high in the beginning, if market does well; but when market starts performing badly, the returns can take a hit and then be in a tight range. Your NAV will be protected for sure, but the returns wont be, since over time the CAGR return will go down. Remember, if your NAV is 10 today and you highest NAV is 20, for a 2 year period, the return is a good enough 41%, but by the 4th year it’s just 18.9% and by the end of 7th year it’s a measly 10.4%. So what you really need, is protection of returns, not the NAV which is just a fixed number.
Please note - We don't provide any service for Highest NAV guarantee plans and traditional insurance plans.
Please look blow image:
How Highest NAV guarantee plan works?
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For comments/queries feel free to CLICK HERE with your contact details.
