Capital Guarantee Plan

What is a Capital Guarantee Plan?

The capital guarantee plan is an investment plan that offers you the assurance of protecting your initial investment (capital) from potential losses. This is an insurance product that provides a combination of investment opportunities of a Unit Linked Insurance Plan (ULIP) and a safety net of a Non-Linked Guaranteed Return Plan. It ensures that you receive at least the amount you initially invested, regardless of market conditions.

What are the Key Features of a Capital Guarantee Solution Plan?

Following are some of the fundamental features of a Capital Guarantee Solution Plan:

• Balanced Investment Plan: This savings plan aims to strike a balance between risk and reward, which helps mitigate the downside risk associated with investments.

• Capital Protection: The primary feature of a Capital Guarantee Plan is the assurance that your initial capital will be protected, regardless of market fluctuations or investment performance.

• Potential for Returns: It allows you to participate in the potential growth of your investments while minimizing the risk of losing your principal amount.

• Ideal for Conservative Investors: This makes it an attractive investment option for cautious investors.

• Term and Maturity: You commit your capital for the defined duration ranging from a few years to decades. At maturity, you receive a 100% guaranteed principal amount along with any potential gains.

• Flexibility in Investment Plan Options: You have the freedom to allocate your funds among different investment portfolios or choose from a range of risk profiles based on your individual financial goals and risk tolerance.

• Professional Management: Financial professionals who have expertise in asset allocation and risk management typically manage Capital Guarantee Plans.

• Partial Withdrawals: You can withdraw any amount from your Fund Value after 5 years of lock-in period. Multiple withdrawals are allowed only for market link funds.

Capital Guarantee Solution Plan with an Example 

The TATA AIA Capital Guarantee Solution is an insurance product which is among one of the best Policybazaar investment plans:

Suppose Mr Akhil is of age 30 years and decides to invest in TATA AIA Capital Guarantee Solution as per the following terms:

• Principal Investment Amount: Rs. 10,000 per month

• Premium Payment Term (PPT): 10 years

• Total Investment: Rs. 12 lakhs

• Policy Term (PT): 20 years

At the age of 50 years (20 years of policy term), Mr Akhil will earn the following benefits:

• 100% Guaranteed Return: Rs. 12.1 lakhs

• 10-year return from Whole Life Mid Cap Equity fund: 14.1% p.a.

• Market-Linked Returns from ULIP funds: Rs. 1.04 crores

• Lump Sum Payout: Rs. 98.98 lakhs

• Life Coverage Benefits: Rs. 12.93 lakhs

Capital Guarantee Solution Plans by Various Insurance Companies in India

Let us learn the list of best capital guarantee plans from the table below if you invest as per the following conditions:

• Investment Amount: Rs. 10,000/ month

• PPT: 10 years

• PT: 20 years

Note: The rate of return is as of July, 2025. Actual figures may vary depending on the market performance.
Disclaimer: ≈ Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is done in alphabetical order (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

Who Should Invest in a Capital Guarantee Plan?

A Capital Guarantee Plan is suitable for individuals who prioritize the protection of their capital while still seeking potential returns on their investments. The plan is particularly attractive to the following types of investors:

1. Risk-Averse Investors

   Ideal for individuals who want equity-linked returns but fear market volatility. These plans ensure your invested capital is safeguarded.

2. First-Time Investors

   Those new to market-linked instruments can start with capital guarantee plans for a safer investment experience.

3. Long-Term Financial Planners

   If you have long-term goals like a child's education, marriage, or retirement, these plans offer disciplined investing with capital protection.

4. Tax-Saving Investors

   Since many capital guarantee plans offer tax benefits under Section 80C, they’re apt for investors seeking tax-efficient options.

5. People Nearing Retirement

   Individuals who cannot afford to lose principal but still want some exposure to market returns can benefit from these hybrid plans.

Why Should You Invest in a Capital Guarantee Solution Plan?

Investing in a capital guarantee solution plan can offer several benefits to you, some of them are as follows:

1. Assured Capital Protection

   Your invested capital is safeguarded and returned at maturity, regardless of market performance.

2. Equity Market Participation

   A portion of your premium is invested in market-linked funds, giving you the potential to earn higher returns over time.

3. Tax Benefits

   Enjoy tax deductions under Section 80C and tax-free maturity under Section 10(10D), subject to conditions.

4. Goal-Based Planning

   Ideal for long-term financial goals like education, marriage, or retirement, as it instills discipline and protects your base investment.

5. Balanced Risk Approach

   It’s designed for investors who want some exposure to equity without putting their entire capital at risk.

6. Inbuilt Life Cover

   Along with capital protection and market-linked growth, you also get an inbuilt life insurance cover, ensuring financial security for your loved ones in case of an unfortunate event.

What are the Factors to Consider while Buying a Capital Guarantee Plan?

Before investing in a Capital Guarantee Plan, it's important to evaluate the following aspects to make an informed decision:

1. Capital Protection Terms

   Understand the terms under which your capital is guaranteed. Usually, the guarantee applies only at policy maturity.

2. Lock-in Period

   These plans come with a longer lock-in (typically 5 years or more). Ensure your investment horizon aligns with the plan’s term.

3. Fund Allocation Strategy

   Check how your premium is split between market-linked funds and debt instruments to balance returns and capital safety.

4. Charges and Fees

   Look for policy charges such as premium allocation, fund management, and mortality charges that can affect your returns.

5. Life Cover Benefit

   Confirm the sum assured offered and whether it sufficiently meets your family's protection needs.

6. Returns Expectation

   Since returns depend on market performance, ensure you have realistic expectations, these are not high-return products but aim for stable growth.

7. Tax Implications

   Review the plan’s eligibility under Section 80C and 10(10D) for tax savings and check if it complies with the latest income tax rules.

8. Insurer’s Credibility

   Choose a reliable insurer with a good claim settlement ratio and financial strength to ensure smooth servicing and payouts.

Why Buy Capital Guarantee Plans from Policybazaar?

Following are some of the reasons to prefer buying the best Capital Guaranteed Plan from Policybazaar are as follows:

1. No Hidden Charges

   Policybazaar follows the policy of full transparency. All the charges along with returns are clearly spelt out so you are fully aware of what you are buying.

2. Expert Advice

   Certified advisors at Policybazaar are always happy to help the curious investors.

3. Safety and Security

   Policybazaar does not represent any particular insurance company and it always suggests products that are suitable for you. The company is regulated by Insurance Regulatory and Development Authority of India (IRDAI) to act fully in the interest of policyholders.

4. 100% Calls Recorded

   Policybazaar takes full responsibility for their every sale. All the calls take place on a recorded line to ensure that the financial experts do not miss-sell a product to you. The company believes in utmost transparency & honesty.