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Can the Canara HSBC Promise4 Growth Plan offer complete control over your savings and insurance needs?
Is the Canara HSBC Promise4 Growth Plan the perfect balance between wealth creation and life cover?
Can the Canara HSBC Promise4 Growth Plan provide the flexibility needed to adapt to your changing financial goals?
This review explores its features, benefits, and drawbacks, along with an analysis of potential returns.
Table of Contents:
What is the Canara HSBC Promise4 Growth Plan?
What are the features of the Canara HSBC Promise4 Growth Plan?
What are the plan options in the Canara HSBC Promise4 Growth Plan?
Who is eligible for the Canara HSBC Promise4 Growth Plan?
What are the benefits of the Canara HSBC Promise4 Growth Plan?
What are the fund options in the Canara HSBC Promise4 Growth Plan?
What are the charges in the Canara HSBC Promise4 Growth Plan?
Grace period, Discontinuance and Revival of Canara HSBC Promise4 Growth Plan
Free Look period of Canara HSBC Promise4 Growth Plan
Surrendering Canara HSBC Wealth Promise4 Growth Plan
What are the advantages of the Canara HSBC Promise4 Growth Plan?
What are the disadvantages of the Canara HSBC Promise4 Growth Plan?
Research Methodology of Canara HSBC Promise4 Growth Plan
Benefit Illustration – IRR Analysis of Canara HSBC Promise4 Growth Plan
Canara HSBC Promise4 Growth Plan Vs. Other Investments
Canara HSBC Promise4 Growth Plan Vs. Pure-term + PPF/ELSS
Final Verdict on Canara HSBC Promise4 Growth Plan
What is the Canara HSBC Promise4 Growth Plan?
Canara HSBC Promise4Growth Plan is a Unit-Linked Individual Savings Life Insurance Plan. This product is a non-participating product.
You can customise the plan as per your goals and changing requirements. With an unmatched combination of Portfolio Management Options and flexibilities, you can fulfil your savings and insurance needs.
What are the features of the Canara HSBC Promise4 Growth Plan?
- Enjoy life coverage for the entire Canara HSBC Promise4Growth Plan policy term.
- Flexibility to choose between paying premiums throughout the policy tenure or for a limited period.
- Select from three plan options — ‘Promise4Wealth,’ ‘Promise4Care,’ or ‘Promise4Life’—tailored to your life stage needs.
- Only Fund Management and Risk Charges apply, enhancing your savings potential.
- Mortality Charges deducted during the policy term are added back to the Fund Value at maturity.
- Access a selection of nine investment funds.
- Optimize your returns with multiple Portfolio Management Options, aligning with your investment strategy.
- Enjoy potential tax benefits on premiums paid and benefits received, subject to prevailing tax laws under the Income Tax Act, of 1961.
What are the plan options in the Canara HSBC Promise4 Growth Plan?
Promise4Wealth: A simple option that provides life coverage during the Canara HSBC Promise4Growth Plan Policy Term and the accumulated fund value of your savings at maturity.
Promise4Care: Option that provides life coverage and ensures that your savings contributions are made even in your absence through ‘Premium Funding Benefit’, where all future premiums get funded by the Company, thus ensuring a secure future for your dependents
Promise4Life: This option will cover you till you turn 100 years of age and also allows you to leave a legacy for your loved ones.
Who is eligible for the Canara HSBC Promise4 Growth Plan?
| Eligibility Conditions | Promise4 Wealth | Promise4 Care | Promise4 Life |
| Entry age | 0-65 years | 18-50 years | 18-65 years |
| Maturity age | 18-80 years | 28-80 years | up till age 100 years |
| Policy term | 10-30 years | 10-30 years | 100 minus (Age at entry) |
| Premium paying term | Limited Pay: 5 to Policy Term-1 Years Regular Pay: Same as Policy Term |
Limited Pay: 10 to Policy Term-1 Years Regular Pay: Same as Policy Term |
|
| Sum assured | 10*Annualised premium | ||
| Annualised premium | ₹ 12,000 – No limit | ||
| Premium payment mode | Annual, Semi-Annual, Quarterly and Monthly | ||
What are the benefits of the Canara HSBC Promise4 Growth Plan?
1. Death benefit
Promise4 wealth
Higher of:
- Sum Assured less withdrawals, if any, in the preceding two years, or
- Fund Value as on date of intimation of death claim, or
- 105% of all Premiums paid up to the date of death.
Promise4 care
Higher of the following will be payable as a lump sum:
- Sum Assured, or
- 105% of all Premiums paid up to the date of death
Premium Funding Benefit – The policy continues as the company pays the premium. At maturity, Fund Value is payable as a lump sum or as per the Settlement Option chosen by the Canara HSBC Promise4Growth Plan Policyholder before death.
Promise4 Life
Higher of:
- Sum Assured less withdrawals, if any, in the preceding two years, or
- Fund Value as on date of intimation of death claim, or
- 105% of all Premiums paid up to the date of death.
2. Maturity benefit
Promise4Wealth and Promise4Life options:
In case the Life Assured survives till the maturity of the Policy, Fund Value as on the date of maturity is payable and the Canara HSBC Promise4Growth Plan Policy will terminate upon payment of such benefit.
Promise4Care option:
Fund Value as of the date of maturity is payable to the Life Assured if the Life Assured is alive or to the Claimant if the Life Assured is not alive
Option to receive Maturity Benefit as a structured payout using the Settlement Option under the Promise4Wealth Option and Promise4Care option.
3. Additions
Loyalty Additions from the end of the 5th Policy Year from the date of commencement and every 5th Policy Year thereafter i.e. 10th, 15th 20th Policy Year etc. till the end of Premium Paying Term
Wealth Boosters at the end of the 10th Policy Year from the date of commencement and every 5th Policy Year i.e. 15th, 20th Policy year etc. thereafter till the end of the Canara HSBC Promise4Growth Plan Policy Term
What are the fund options in the Canara HSBC Promise4 Growth Plan?
This Plan gives you the flexibility to manage and control the savings in your way. Here you can choose from a range of 9 Unit Linked Funds. You can choose to allocate your Premiums to any, all or a combination of the Unit Linked Funds as per your risk preference.
| Asset Allocation | |||||
| S no | Fund Name | Equity | Debt Securities | Money Market | Risk Profile |
| 1 | Large-cap Advantages fund | 90-100% | _ | 0-10% | High |
| 2 | Midcap Momentum Growth Index fund | 70-100% | _ | 0-30% | High |
| 3 | Emerging Leaders Equity fund | 60-100% | _ | 0-40% | High |
| 4 | India Multi-cap Equity fund | 60-100% | _ | 0-40% | High |
| 5 | Equity II fund | 60-100% | _ | 0-40% | High |
| 6 | Growth Plus fund | 50-90% | 10-50% | 0-40% | Medium to High |
| 7 | Balanced Plus fund | 30-70% | 30-70% | 0-40% | Medium |
| 8 | Debt fund | _ | 60-100% | 0-40% | Low to Medium |
| 9 | Liquid fund | _ | 0-60% | 40-100% | Low |
i.) Systematic Transfer Plan (STO)
Through STO, your entire annual/single allocable Premium (after deduction of applicable charges) will be first allocated to the Liquid Fund (‘Source STO Fund’) and then systematically transferred on a monthly basis into any one of the Unit Linked Funds (‘Target STO Fund’) as chosen by you as per the below Table.
STO can be opted / re-opted only when Premiums are paid in annual mode.
| Source STO Fund | Target STO Fund |
| Liquid Fund | Equity II fund |
| India Multi-cap Equity fund | |
| Emerging Leaders Equity fund | |
| Large-cap Advantages fund |
ii.) Return Protector Option (RPO)
Through RPO, your entire Premium net of applicable charges is invested into any one of either Large Cap Advantage Fund or India Multi-Cap Equity Fund or Equity II Fund or Emerging Leaders Equity Fund, as opted by You (‘RPO Fund) and gains made from RPO Fund are automatically transferred to a lower risk Debt Fund so as to create a more stable sequencing of investment returns during the Policy Term.
You can choose any fixed flat target appreciation percentage in multiple of 1 within a range of 5% to 15%.
iv.) Auto Funds Rebalancing (AFR)
Once opted, after every 3 months, it automatically rebalances the allocation of your savings in various Unit Linked Funds to the allocation proportions chosen by you.
v.) Safety Switch Option (SSO)
The Safety Switch Option will be available only under Invest Plus and Premium Plus.
As the Canara HSBC Promise4Growth Plan Policy nears maturity, your funds will get shifted systematically to the relatively low-risk Liquid Fund at the beginning of each of the last 4 years of the Policy as per the following schedule:
| At the start of the Policy year (T refers to Policy term) | Fund Allocation in Other than Liquid funds | Liquid fund allocation |
| T-3 | 70% | 30% |
| T-2 | 40% | 60% |
| T-1 | 10% | 90% |
| T | 0% | 100% |
What are the charges in the Canara HSBC Promise4 Growth Plan?
A. Premium Allocation Charges
No Charge.
B. Policy Administration Charges
No Charge.
C. Fund Management Charges
| S no | Fund Name | |
| 1 | Emerging Leaders Equity fund | 1.35% |
| 2 | India Multi-cap Equity fund | 1.35% |
| 3 | Equity II fund | 1.35% |
| 4 | Midcap Momentum Growth Index fund | 1.35% |
| 5 | Growth Plus fund | 1.35% |
| 6 | Balanced Plus fund | 1.35% |
| 7 | Large-cap Advantages fund | 1.00% |
| 8 | Debt fund | 1.00% |
| 9 | Liquid fund | 0.80% |
| Discontinued Policy fund | 0.50% |
D. Surrender/Discontinuance Charge
It is levied on the Fund Value on account of Surrender/Discontinuance of the Policy. It depends on the year of discontinuance, premium amount and premium paying term.
E. Mortality Charge
This charge is the cost of life insurance. It will be deducted at the beginning of each Policy month by cancellation of units. The amount of the charge taken each month depends on the Life Assured’s age and Sum at Risk.
| Age | 20 | 30 | 40 | 50 |
| Male | 0.878 | 0.928 | 1596 | 4.214 |
| Female | 0.788 | 0.887 | 1.29 | 3.01 |
F. Premium Funding Benefit (PFB) Charges
This charge is only applicable for Premium Plus. The Premium Funding Benefit Charge will apply on the Present Value of Future Premiums payable by the Life Assured for an in-force Policy.
G. Partial Withdrawal Charges
No Charge.
H. Switches Charges
No Charge.
I. Miscellaneous Charges
No Charge
Impact of Charges: While this plan does not impose higher fees than other ULIPs, certain charges continue throughout the policy term. These ongoing costs can gradually diminish returns over time, impacting overall profitability for investors.
Grace period, Discontinuance and Revival of Canara HSBC Promise4 Growth Plan
Grace Period
You have a period of 30 days for Annual, Half Yearly and Quarterly Mode of Premium payment and 15 days for Monthly Mode of Premium payment from the due date to pay your Premiums, during which life insurance cover will continue.
Discontinuance
Discontinuance of Policy during Lock-in Period (during first five years): the Fund Value less applicable Discontinuance Charge will be transferred to the DPF and the risk cover, if any, under the Policy will cease.
The proceeds of the DPF shall be paid to the Canara HSBC Promise4Growth Plan Policyholder at the end of the Revival Period or Lock-in Period whichever is later.
Discontinuance of Policy after the Lock-in Period (after the first five years): the Policy shall be converted into a Reduced Paid-up Policy, with the Paid-up Sum Assured.
The Canara HSBC Promise4Growth Plan Policy shall continue to be in Reduced Paid-up status. The Fund Value shall be paid to the Policyholder at the end of the Revival Period or at the end of the Policy Term, whichever is earlier.
Revival
The Canara HSBC Promise4Growth Plan policy can be revived within a period of three consecutive years from the date of the first unpaid premium
Free Look period of Canara HSBC Promise4 Growth Plan
If the Policyholder does not agree with the terms and conditions of the Policy or otherwise and 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 the free-look period of 30 days from the date of receipt of the Policy Document, whether received electronically or otherwise (whichever is earlier).
Surrendering Canara HSBC Wealth Promise4 Growth Plan
Surrender of Policy during Lock-in Period (during first five years): the Fund Value after deduction of applicable Surrender Charges is transferred to the DPF and the proceeds of discontinued policy shall be refunded to the Policyholder only after completion of Lock-in Period.
Surrender of Policy after the Lock-in Period (after the first five years): the Canara HSBC Promise4Growth Plan Policyholder has the option to surrender the Policy anytime and Fund Value shall be payable.
What are the advantages of the Canara HSBC Promise4 Growth Plan?
- The Milestone Withdrawal Option provides liquidity at key financial milestones.
- Partial withdrawals are allowed from the 6th policy year onwards, provided the life assured is at least 18 years old.
- The Systematic Withdrawal Option enables you to generate an additional income stream during the policy term.
- The Settlement Option is available under the ‘Promise4Wealth’ and ‘Promise4Care’ plans.
- Premium redirection is available at no additional cost.
- Enjoy unlimited free switches between funds for greater investment flexibility.
- The Premium Fund Benefit (applicable to ‘Promise4Care’) ensures that your savings contributions continue even in your absence.
- Adjust your policy to meet evolving financial needs by modifying premiums, payment terms, and policy duration.
What are the disadvantages of the Canara HSBC Promise4 Growth Plan?
- This plan does not offer a loan facility.
- Funds remain inaccessible during the first five policy years.
- The sum assured may fall short of financial requirements.
- Investment returns are lower compared to alternative options.
Research Methodology of Canara HSBC Promise4 Growth Plan
This section analyses the investment potential of the Canara HSBC Promise4 Growth Plan. By calculating the expected returns, you can evaluate its performance and compare it with other investment options.
The following Internal Rate of Return (IRR) analysis is based on figures from the Canara HSBC Promise4Growth Plan policy brochure.
Benefit Illustration – IRR Analysis of Canara HSBC Promise4 Growth Plan
A 21-year-old male opts for the Canara HSBC Promise4 Growth Plan with a sum assured of ₹12 lakhs. The policy term and premium payment term are both 15 years, with an annual premium of ₹1.20 lakh. He selects the ‘Promise4 Wealth’ option.
| Male | 21 years |
| Sum Assured | ₹ 12,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 1,20,000 |
Under this option, the fund value is available at the end of the policy term, assuming consistent premium payments. The policy brochure provides projected returns based on assumed investment rates of 4% and 8%.
These figures are not guaranteed and do not indicate the actual upper or lower limits of potential returns. The final maturity benefit depends on multiple factors, including the policy’s market performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 21 | 1 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 22 | 2 | -1,20,000 | 12,00,001 | -1,20,000 | 12,00,001 |
| 23 | 3 | -1,20,000 | 12,00,002 | -1,20,000 | 12,00,002 |
| 24 | 4 | -1,20,000 | 12,00,003 | -1,20,000 | 12,00,003 |
| 25 | 5 | -1,20,000 | 12,00,004 | -1,20,000 | 12,00,004 |
| 26 | 6 | -1,20,000 | 12,00,005 | -1,20,000 | 12,00,005 |
| 27 | 7 | -1,20,000 | 12,00,006 | -1,20,000 | 12,00,006 |
| 28 | 8 | -1,20,000 | 12,00,007 | -1,20,000 | 12,00,007 |
| 29 | 9 | -1,20,000 | 12,00,008 | -1,20,000 | 12,00,008 |
| 30 | 10 | -1,20,000 | 12,00,009 | -1,20,000 | 12,00,009 |
| 31 | 11 | -1,20,000 | 12,00,010 | -1,20,000 | 12,00,010 |
| 32 | 12 | -1,20,000 | 12,00,011 | -1,20,000 | 12,00,011 |
| 33 | 13 | -1,20,000 | 12,00,012 | -1,20,000 | 12,00,012 |
| 34 | 14 | -1,20,000 | 12,00,013 | -1,20,000 | 12,00,013 |
| 35 | 15 | -1,20,000 | 12,00,014 | -1,20,000 | 12,00,014 |
| 36 | 22,54,344 | 30,80,496 | |||
| IRR | 2.76% | 6.46% | |||
At a 4% return, the projected fund value is ₹22.54 lakhs, resulting in an IRR of 2.76% as per the Canara HSBC Promise4Growth Plan maturity calculator, which is lower than the interest offered by a savings account.
At an 8% return, the projected fund value reaches ₹30.80 lakhs, with an IRR of 6.46% as per the Canara HSBC Promise4Growth Plan maturity calculator, comparable to or potentially lower than a bank fixed deposit rate.
Although the Canara HSBC Promise4 Growth Plan is a market-linked product, the returns do not adequately compensate for the associated risk. While designed for long-term wealth creation and inflation protection, its returns fall short, limiting wealth accumulation.
Consequently, the corpus generated through the Canara HSBC Promise4 Wealth plan may not be sufficient to achieve your financial goals.
Canara HSBC Promise4 Growth Plan Vs. Other Investments
The Canara HSBC Promise4 Growth Plan faces limitations in terms of suitability due to its inability to generate inflation-beating returns and an inadequate sum assured.
The combination of insurance and investment within a single product further contributes to its subpar returns. To better illustrate this, let’s explore an alternative approach by separating life insurance and investment.
Canara HSBC Promise4 Growth Plan Vs. Pure-term + PPF/ELSS
Consider purchasing a pure term life insurance policy with a sum assured of ₹12 lakhs at an annual premium of ₹4,400.
With a policy term and premium payment period of 15 years, this leaves ₹1,15,600 available for investment, which can be allocated based on individual risk preferences.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 12,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 4,400 |
| Investment | ₹ 1,15,600 |
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 21 | 1 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 22 | 2 | -1,20,000 | 12,00,001 | -1,20,000 | 12,00,001 |
| 23 | 3 | -1,20,000 | 12,00,002 | -1,20,000 | 12,00,002 |
| 24 | 4 | -1,20,000 | 12,00,003 | -1,20,000 | 12,00,003 |
| 25 | 5 | -1,20,000 | 12,00,004 | -1,20,000 | 12,00,004 |
| 26 | 6 | -1,20,000 | 12,00,005 | -1,20,000 | 12,00,005 |
| 27 | 7 | -1,20,000 | 12,00,006 | -1,20,000 | 12,00,006 |
| 28 | 8 | -1,20,000 | 12,00,007 | -1,20,000 | 12,00,007 |
| 29 | 9 | -1,20,000 | 12,00,008 | -1,20,000 | 12,00,008 |
| 30 | 10 | -1,20,000 | 12,00,009 | -1,20,000 | 12,00,009 |
| 31 | 11 | -1,20,000 | 12,00,010 | -1,20,000 | 12,00,010 |
| 32 | 12 | -1,20,000 | 12,00,011 | -1,20,000 | 12,00,011 |
| 33 | 13 | -1,20,000 | 12,00,012 | -1,20,000 | 12,00,012 |
| 34 | 14 | -1,20,000 | 12,00,013 | -1,20,000 | 12,00,013 |
| 35 | 15 | -1,20,000 | 12,00,014 | -1,20,000 | 12,00,014 |
| 36 | 31,35,233 | 44,55,719 | |||
| IRR | 6.67% | 10.68% | |||
Low-risk investors may opt for debt instruments like the Public Provident Fund (PPF). Over 15 years, the PPF investment accumulates to ₹31.35 lakhs, yielding an IRR of 6.67%.
This return is comparable to the 8% scenario of the Canara HSBC Promise4 Growth Plan, despite PPF being a low-risk debt instrument.
High-risk investors may choose equity-based options such as Equity-Linked Savings Schemes (ELSS) funds. The pre-tax maturity value in ELSS reaches ₹48.26 lakhs.
After accounting for capital gains tax, the final maturity value is ₹44.55 lakhs, delivering a post-tax IRR of 10.68%. As a market-linked investment, ELSS offers superior risk-adjusted returns along with the flexibility to withdraw funds without restrictions.
| ELSS Tax Calculation | |
| Maturity value after 15 years | 48,26,679 |
| Purchase price | 17,34,000 |
| Long-Term Capital Gains | 30,92,679 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 29,67,679 |
| Tax paid on LTCG | 3,70,960 |
| Maturity value after tax | 44,55,719 |
In contrast, the Canara HSBC Promise4 Growth Plan falls short in terms of liquidity and fails to deliver competitive risk-adjusted returns, making the alternative strategy a more effective approach to financial planning.
Final Verdict on Canara HSBC Promise4 Growth Plan
Marketed as a customizable solution, the Canara HSBC Promise4 Growth Plan offers three variations—wealth accumulation, a plan with a waiver of premium, and whole-life coverage.
At first glance, its features suggest it can help investors achieve financial goals and secure their family’s future. However, a closer analysis reveals that the plan falls short due to its weak return potential and it also has a high agent commission.
The charges and lack of transparency in investment management significantly impact the plan’s performance, resulting in subpar returns and limiting wealth accumulation. Additionally, the low sum assured makes it less attractive.
The combination of insurance and investment within a single product further reduces the Canara HSBC Promise4 Growth plan’s overall efficiency.
A more effective strategy is to separate insurance and investments. A pure-term life insurance policy provides adequate coverage to protect your family while investing separately allows you to align with your financial goals based on your time horizon and risk tolerance.
Before investing, always assess the potential returns of a product to ensure it meets your needs.
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A well-structured financial plan is key to navigating your financial journey with confidence.
If you need guidance, consider consulting a Certified Financial Planner, who can provide expert insights into various financial products and help you build a comprehensive strategy tailored to your needs.
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