Single premium bond from Birla Sun Life

Mumbai: Birla Sun Life Insurance, a joint venture between the Aditya Birla group and Sun Life Financial, has added one more to its basket of unit-linked insurance products.

"This new single premium bond is an insurance cum investment product," said Mr Nani Javeri, CEO, Birla Sun Life Insurance, at a press conference held here today.

Most insurance companies offer a minimum-guaranteed rate of return of 5-6 per cent on their principal for the single premium bonds, whereas Birla Sun Life guarantees only the principal.

Comparing the product to mutual fund schemes which do not assure even the principal, Mr Javeri said: "Assuring returns is not sustainable in the current market conditions'.

"The upside benefit of the product is limitless, depending of the performance of the capital and financial markets," said Mr Peter Akers, Chief Financial Officer and Appointed Actuary, Birla Sun Life Insurance.

With a minimum one-time payment of Rs 25,000, the single premium bond is available for two tenures - 5 years and 10 years.

In the case of the 10-year plan, the investor can choose among the three options of investment fund pattern, depending on one's risk appetite. It is possible to make up to two switches in the investment fund pattern in a year, free of cost and can also surrender the fund at any point in time after the first year without incurring any charge. However, if surrendered in the first year of investing, the customer will have to foot a surrender charge, which is 25 per cent of the initial investment amount.

The single premium bond comes with a life insurance cover, which offers 105 per cent of the premium amount or the policy fund, whichever is higher on the death of the investor.