chennai with stock marketrelated unit linked insurance plans ulips hardly finding any takers now life insurers have launched old favourites guaranteed return products hoping to cash in on the noguaranteeinlife sentiment the idea is to combine a normal life insurance policy and the promise of entitlement to a fixed sum of money at the end of the maturity period 5710 years riskaverse investors who want the comfort of a guaranteed return of around 6 to 9 on maturity are sure giving them a lookin and initial responses have been positive industry sources say most insurers will park the premium into bank deposits money market instruments gilts bonds debentures and corporate debt papers lics jeevan aastha aegon religares guaranteed return plan idbi fortis bondsurance and reliance lifes guaranteed return plan series i are some examples many agentsadvisers are promising returns of up to 12 to 13 after factoring in discretionary loyalty additions all these products are single premium products which mean that the customer aged between 90 days and 45 years 60 years in some cases pays a single oneoff payment which could be as low as rs 20000 the return guaranteed by the insurers is based on the prevailing interest rates hence insurers need to lock in the entire amount at a particular rate of interest if the premium is collected annually and the rate of interest falls in the future the insurers would be hard pressed to meet the guaranteed return said rahul aggarwal chief executive of optima insurance brokers the products are also positioned as taxsavers sales of insurance policies in the fourth quarter accounts for 40 of their annual sales as individuals invest to avail of tax benefits both the amount invested and the amount returned by the insurer at the time of maturity are tax exempt customers usually lock their returns at high interest rates especially when they have a perception that the current interest rates may not sustain also offering taxfree returns under sec 1010d with this combination of guaranteed returns with life cover allows offering a much better net yield posttax to the customer said g v nageswara rao ceo and managing director idbi fortis life an investor can unbundle a guaranteed return product by taking a term insurance policy and tax free long term bonds issued by government while this would be financially a better option if the return from the bonds is more than what is being promised by the insurance company aggarwal of optima feels most investors are not sophisticated enough to do such unbundling and would be better off by investing in a guaranteed return insurance policy agrees rao of idbi fortis our understanding from customer feedback is that most customers find it difficult to buy and manage multiple instruments they prefer a one stop solution