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Can the Canara HSBC Guaranteed Suraksha Kavach Plan provide the perfect mix of protection and returns for your long-term goals?
Can the Canara HSBC Guaranteed Suraksha Kavach Plan truly offer the financial security it promises, or is there more to uncover?
Is the Canara HSBC Guaranteed Suraksha Kavach Plan the ideal shield for your financial future, or should you explore other options?
This review will provide insights into its features, benefits, advantages, and drawbacks to help you make an informed decision.
Table of Contents:
What is the Canara HSBC Guaranteed Suraksha Kavach Plan?
What are the features of the Canara HSBC Guaranteed Suraksha Kavach Plan?
Who is eligible for the Canara HSBC Guaranteed Suraksha Kavach?
What are the benefits of the Canara HSBC Guaranteed Suraksha Kavach Plan?
Grace Period, Discontinuance and Revival of Canara HSBC Guaranteed Suraksha Kavach Plan
Free Look Period of Canara HSBC Guaranteed Suraksha Kavach Plan
Surrendering Canara HSBC Guaranteed Suraksha Kavach Plan
What are the advantages of the Canara HSBC Guaranteed Suraksha Kavach Plan?
What are the disadvantages of the Canara HSBC Guaranteed Suraksha Kavach Plan?
Research Methodology of Canara HSBC Guaranteed Suraksha Kavach Plan
Benefit Illustration – IRR Analysis of Canara HSBC Guaranteed Suraksha Kavach Plan
Canara HSBC Guaranteed Suraksha Kavach Plan Vs. Other Investments
Canara HSBC Guaranteed Suraksha Kavach Plan Vs. Pure-term + PPF/ELSS
Final Verdict on the Canara HSBC Guaranteed Suraksha Kavach Plan
What is the Canara HSBC Guaranteed Suraksha Kavach Plan?
Canara HSBC Guaranteed Suraksha Kavach Plan is a Non-Linked Non-Par Individual Life Insurance Savings cum Protection Plan. It is exclusively designed to suit defence personnel’s financial needs and provide a secure future with two plan options – Future Suraksha and Income Suraksha.
What are the features of the Canara HSBC Guaranteed Suraksha Kavach Plan?
- A financial safety net to secure your child’s future
- Assured benefits throughout the Canara HSBC Guaranteed Suraksha Kavach Plan policy duration
- Comprehensive coverage with multiple layers of protection in case of death
- Monthly Family Income Benefit to provide financial support during unforeseen events
- Tax benefits as per prevailing laws, subject to amendments
- Under the Income Suraksha option, receive a Guaranteed Monthly Income for 10 or 15 years for you and your family
Who is eligible for the Canara HSBC Guaranteed Suraksha Kavach?
| Parameters | Minimum | Maximum | |
| Entry age | 18 years | 55 years | |
| Maturity age | 28 years | 70 years | |
| Premium payment term & Policy term | Premium payment term | Policy term (Future Suraksha) | Policy term (For Income period 10/15 years-Income Suraksha) |
| 5 years | 10 years | 20/25 years | |
| 7 years | 12 years | 22/27 years | |
| 10 years | 15 years | 25/30 years | |
| 12 years | 17 years | 27/32 years | |
| Annualised premium | Monthly-2000 Quarterly-6000 Half-Yearly-12000 Yearly-24000 |
No limit | |
| Premium paying mode | Annual, Half-Yearly, Quarterly & Monthly modes | ||
| Sum assured | Will depend upon your age, your nature of duty Annualized Premium, Policy Term and Premium Payment Mode | No limit | |
What are the benefits of the Canara HSBC Guaranteed Suraksha Kavach Plan?
1. Future Suraksha
Death benefit
- Immediate Benefit: Guaranteed Sum Assured as a lump sum.
- Family Income Benefit: Monthly income equal to 12% of the Annualized Premium every month starting from the next monthly anniversary following death till the end of the policy term.
- Premium Protection Benefit: All future premiums will be waived off and the policy will continue with maturity benefit as an in-force policy i.e. Guaranteed Monthly Additions will continue to accrue.
Maturity Benefit
Guaranteed Sum Assured plus accrued Guaranteed Monthly Additions payable in lump sum.
2. Income Suraksha
Death benefit
- Accrued Guaranteed Monthly Additions, if any, will be paid as lumpsum immediately
- Guaranteed Income on Death will be payable on each monthly anniversary immediately following the date of death of the Life Assured and will continue for the duration of the Income Period. It is expressed as a percentage of Annualized Premium.
Survival/Maturity benefit
Guaranteed Survival Income plus Loyalty Income will be payable at the end of the chosen Income Frequency. This income shall be payable over a period of the last 10 or 15 years of the Policy Term as per the Income Period chosen.
Guaranteed Sum Assured on Maturity will be paid as a lump sum at the end of the Canara HSBC Guaranteed Suraksha Kavach Plan Policy Term on survival of Life Assured and is expressed as a percentage of Total Premiums Paid.
Grace Period, Discontinuance and Revival of Canara HSBC Guaranteed Suraksha Kavach Plan
Grace Period
A Grace Period of 30 days for annual, half-yearly and quarterly modes and 15 days for monthly modes from the Premium due date to pay the due premium.
Discontinuance
If you fail to pay the due premium within the Grace Period in the first policy year then your policy will lapse at the expiry of the Grace Period and the insurance cover will cease immediately and no benefit is payable on death/maturity/request for termination of the policy.
If you fail to pay the due premium within the Grace Period after paying premiums for the first full policy year policy years, your policy will become a Paid-up policy and will continue with reduced benefits till death/survival/maturity.
Guaranteed Monthly Addition(s) will not accrue any further.
Revival
The Canara HSBC Guaranteed Suraksha Kavach Plan policy can be revived within the revival period of 5 years from the due date of the first unpaid premium.
Free Look Period of Canara HSBC Guaranteed Suraksha Kavach Plan
If the Policyholder does not agree with the terms and conditions of the Policy or otherwise & has not made any claim, they shall have the option to request for cancellation of the Policy by returning the Policy Document (if issued physically upon request) within 30 days from the date of receipt of the Policy Document, whether received electronically or otherwise (whichever is earlier).
Surrendering Canara HSBC Guaranteed Suraksha Kavach Plan
The Canara HSBC Guaranteed Suraksha Kavach Plan policy shall acquire a Guaranteed Surrender Value (GSV) after payment of at least the first 2 consecutive policy years’ premiums.
The policy shall acquire a Special Surrender Value (SSV) after payment of the first full year’s Premium and post-completion of 12 months from policy inception.
On surrender of the policy, the Surrender Value payable will be higher than Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV).
What are the advantages of the Canara HSBC Guaranteed Suraksha Kavach Plan?
- Loan facility available, with a maximum limit of 80% of the Surrender Value
- Guaranteed survival/maturity benefits, even after the policyholder’s demise
What are the disadvantages of the Canara HSBC Guaranteed Suraksha Kavach Plan?
- Fixed policy terms and premium payment schedules with no flexibility
- Guaranteed benefits, but returns are relatively low
- Restrictive cash flow structure
- Survival benefits under the Income Suraksha Plan may encourage discretionary spending
Research Methodology of Canara HSBC Guaranteed Suraksha Kavach Plan
Before investing in any financial product, it is essential to evaluate potential returns. To better understand the Canara HSBC Guaranteed Suraksha Kavach Plan, we will calculate its returns and assess its suitability.
Following is the Internal Rate of Return (IRR) calculation based on the figures provided in the Canara HSBC Guaranteed Suraksha Kavach Plan policy brochure.
Benefit Illustration – IRR Analysis of Canara HSBC Guaranteed Suraksha Kavach Plan
A 28-year-old male invests ₹36,000 annually in this plan, selecting a 10-year Premium Payment Term and a 15-year Policy Term, with a sum assured of ₹3.60 lakhs under the Future Suraksha Option.
| Male | 28 years |
| Sum Assured | ₹ 3,60,000 |
| Policy Term | 15 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 36,000 |
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 28 | 1 | -36,000 | 3,60,000 |
| 29 | 2 | -36,000 | 3,60,000 |
| 30 | 3 | -36,000 | 3,60,000 |
| 31 | 4 | -36,000 | 3,60,000 |
| 32 | 5 | -36,000 | 3,60,000 |
| 33 | 6 | -36,000 | 3,60,000 |
| 34 | 7 | -36,000 | 3,60,000 |
| 35 | 8 | -36,000 | 3,60,000 |
| 36 | 9 | -36,000 | 3,60,000 |
| 37 | 10 | -36,000 | 3,60,000 |
| 38 | 11 | 0 | 3,60,000 |
| 39 | 12 | 0 | 3,60,000 |
| 40 | 13 | 0 | 3,60,000 |
| 41 | 14 | 0 | 3,60,000 |
| 42 | 15 | 0 | 3,60,000 |
| 43 | 5,18,756 | ||
| IRR | 3.49% |
At maturity, he will receive the Guaranteed Sum Assured along with accrued Guaranteed Monthly Additions, resulting in a final payout of ₹5.18 lakhs.
This translates to an Internal Rate of Return (IRR) of just 3.49% as per the Canara HSBC Guaranteed Suraksha Kavach Plan maturity calculator.
Such a low return over a long 15-year period is unfavourable, as long-term investments should outpace inflation to ensure financial goals are met. Additionally, the sum assured is inadequate to provide sufficient financial security for the family.
Therefore, investing in the Canara HSBC Guaranteed Suraksha Kavach Plan may not be the best choice, as it falls short of building the required corpus and ensuring adequate financial protection.
Canara HSBC Guaranteed Suraksha Kavach Plan Vs. Other Investments
The returns from the Canara HSBC Guaranteed Suraksha Kavach Plan are lower compared to typical debt instruments. For long-term investments, investors need higher-yielding options to ensure they achieve their financial milestones.
Additionally, the life coverage offered by this plan is insufficient. Let’s explore an alternative approach by separating insurance and investment while using the same metrics from the previous example.
Canara HSBC Guaranteed Suraksha Kavach Plan Vs. Pure-term + PPF/ELSS
As per IRDAI guidelines, the minimum sum assured for a pure-term policy like Saral Jeevan Bima is ₹5 lakhs. In the earlier example, the sum assured was ₹3.6 lakhs, so we assume ₹5 lakhs for life coverage in this scenario.
A pure-term life insurance policy with a ₹5 lakh sum assured costs ₹2,500 annually for a 15-year term, with a 10-year premium payment term. By opting for this, you can save ₹33,500 annually, which can be invested based on your financial goals and risk appetite.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 3,60,000 |
| Policy Term | 15 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 2,500 |
| Investment | ₹ 33,500 |
Investment choices should align with individual risk tolerance. High-risk investors can opt for equity instruments like ELSS, while risk-averse investors can choose safer options like PPF. Here’s how both scenarios compare:
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 28 | 1 | -36,000 | 3,60,000 | -36,000 | 3,60,000 |
| 29 | 2 | -36,000 | 3,60,000 | -36,000 | 3,60,000 |
| 30 | 3 | -36,000 | 3,60,000 | -36,000 | 3,60,000 |
| 31 | 4 | -36,000 | 3,60,000 | -36,000 | 3,60,000 |
| 32 | 5 | -36,000 | 3,60,000 | -36,000 | 3,60,000 |
| 33 | 6 | -36,000 | 3,60,000 | -36,000 | 3,60,000 |
| 34 | 7 | -36,000 | 3,60,000 | -36,000 | 3,60,000 |
| 35 | 8 | -36,000 | 3,60,000 | -36,000 | 3,60,000 |
| 36 | 9 | -36,000 | 3,60,000 | -36,000 | 3,60,000 |
| 37 | 10 | -33,500 | 3,60,000 | -36,000 | 3,60,000 |
| 38 | 11 | -500 | 3,60,000 | 0 | 3,60,000 |
| 39 | 12 | -500 | 3,60,000 | 0 | 3,60,000 |
| 40 | 13 | -500 | 3,60,000 | 0 | 3,60,000 |
| 41 | 14 | -500 | 3,60,000 | 0 | 3,60,000 |
| 42 | 15 | -500 | 3,60,000 | 0 | 3,60,000 |
| 43 | 7,01,139 | 10,72,829 | |||
| IRR | 6.40% | 10.53% | |||
PPF Investment: With a minimum contribution of ₹500 annually for 15 years, and adjustments made to meet PPF regulations due to the 10-year premium payment term, the final maturity value reaches ₹7.01 lakhs, yielding an IRR of 6.40%.
ELSS Investment: After accounting for capital gains tax at redemption, the post-tax maturity value stands at ₹10.72 lakhs (pre-tax value: ₹11.60 lakhs), delivering an overall IRR of 10.53% (post-tax).
| ELSS Tax Calculation | |
| Maturity value after 15 years | 11,60,376 |
| Purchase price | 3,35,000 |
| Long-Term Capital Gains | 8,25,376 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 7,00,376 |
| Tax paid on LTCG | 87,547 |
| Maturity value after tax | 10,72,829 |
These returns surpass inflation, resulting in a significantly higher corpus to comfortably achieve financial goals.
The key reason for this substantial difference in maturity value is the power of compounding, which works best over long periods. This compounding advantage is missing in the Canara HSBC Guaranteed Suraksha Kavach Plan due to its bundled insurance-investment structure.
Final Verdict on the Canara HSBC Guaranteed Suraksha Kavach Plan
The Canara HSBC Guaranteed Suraksha Kavach Plan provides assured returns through guaranteed survival and maturity benefits.
However, the returns fall short, as they are significantly lower than those offered by debt instruments, making it an unsuitable choice for long-term investment. Additionally, the life coverage it provides is inadequate and it also has a high agent commission.
Despite its name, the plan fails to serve as a true “Kavach” (Armor) for the real heroes. Though marketed as a plan designed for army personnel, it is merely a traditional insurance policy without any special features. It neither excels as an insurance product nor as an investment option.
Life coverage is a vital component of personal finance, especially for the brave soldiers who safeguard our nation. A pure-term life insurance policy offers far better financial protection.
To achieve your financial goals and adapt to changing needs, building a strong and diversified investment portfolio is essential.
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