canara hsbc promise4 wealth plan
Can the Canara HSBC Promise4 Wealth Plan truly help you build long-term wealth while protecting your loved ones, or is it just another ULIP with average growth potential?
Does the Canara HSBC Promise4 Wealth Plan offer the right balance between market-linked returns and life insurance, or are there better wealth creation options available?
Is the Canara HSBC Promise4 Wealth Plan a smart choice for achieving your financial goals, or could its features and charges limit your long-term returns?
Let’s examine the plan by analysing its features, benefits, and benefit illustration to determine whether it lives up to its claims.
What is the Canara HSBC Promise4 Wealth?
What are the features of the Canara HSBC Promise4 Wealth?
Who is eligible for the Canara HSBC Promise4 Wealth?
What are the benefits of the Canara HSBC Promise4 Wealth?
What are the fund options in the Canara HSBC Promise4 Wealth?
What are the charges for the Canara HSBC Promise4 Wealth?
Grace Period, Discontinuance and Revival of the Canara HSBC Promise4 Wealth
Free Look Period for the Canara HSBC Promise4 Wealth
Surrendering the Canara HSBC Promise4 Wealth
What are the advantages of the Canara HSBC Promise4 Wealth?
What are the disadvantages of the Canara HSBC Promise4 Wealth?
Research Methodology of Canara HSBC Promise4 Wealth
Benefit Illustration – IRR Analysis of Canara HSBC Promise4 Wealth
Canara HSBC Promise4 Wealth Vs. Other Investments
Canara HSBC Promise4 Wealth Vs. Pure-term + PPF/Equity Mutual Fund
Final Verdict on Canara HSBC Promise4 Wealth
Canara HSBC Promise4 Wealth is a Unit Linked Individual Savings Life Insurance Plan. It is designed to support all your financial needs.
With strong benefits and flexible plan options – Maximiser, Shield, and Long Life – Promise4Wealth keeps you aligned with your financial goals.
| Eligibility Conditions | Promise4 Wealth Maximiser | Promise4 Wealth Shield | Promise4 Wealth Long Life |
| Entry age | 0-65 years | 18-45 years | For PPT less than 10: 18 to 50 |
| Maturity age | 18-80 years | 28-70 years | up to age 100 years |
| Policy term | 10-30 years | 10-25 years | 100 minus (Age at entry) |
| Premium paying term | Limited Pay: 5 to Policy Term-1 Years | ||
| Regular Pay: Same as Policy Term | |||
| Sum assured | 10*Annualised premium | ||
| Annualised premium | Minimum – ₹ 12,000 | ||
| Premium payment mode | Annual, Semi-Annual, Quarterly and Monthly | ||
Promise4 Wealth Maximiser
Higher of:
Promise4 Wealth Shield
The higher of the following will be payable as a lump sum:
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 Policyholder before death.
Income Benefit – Upon the death of the Life Assured, a monthly income equal to 1/12th of the Annualised Premium will be payable starting from the next policy anniversary following the date of death and will continue until the end of the Canara HSBC Promise4 Wealth Plan Policy Term.
Promise4 Wealth Life Long
Higher of:
Promise4 Wealth Maximiser and Promise4 Wealth Life Long options:
In case the Life Assured survives till the maturity of the Policy, the Fund Value as on the date of maturity is payable, and the Canara HSBC Promise4 Wealth Plan Policy will terminate upon payment of such benefit.
Promise4 Wealth Shield option:
Fund Value as on 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 the Maturity Benefit as a structured payout using the Settlement underPromise4 Wealth Maximiser and Promise4Wealth Shield options.
Loyalty Additions will be credited 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 the Premium Paying Term
Wealth Boosters as a percentage of the average Fund Value is added from 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 Promise4 Wealth Plan Policy Term
Return of Charges
Return of Mortality Charge: An amount equal to the total of all the Mortality Charges deducted during the Policy Term will be added to the Fund Value at the maturity date.
Return of Policy Administration Charge: Policy Administration Charges deducted during the Canara HSBC Promise4 Wealth Plan Policy Term will be added to the Fund Value at the maturity date.
This Plan gives you the flexibility to manage and control the savings in your own way.
You will have the option to invest in any of the following unit-linked funds in the proportion as desired.
The investment and risk profile of each Unit Linked Fund is described below:
|
|
| 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 |
| 10 | India Manufacturing Fund | 60-100% | _ | 0-40% | High |
| 11 | Multicap Momentum Quality Index Fund | 70-100% | _ | 0-30% | High |
| 12 | Nifty Alpha 50 Index Fund | 70-100% | _ | 0-30% | High |
| 13 | Nifty 500 Multifactor 50 Index Fund | 70-100% | _ | _ | High |
| 14 | NextGen Consumption Fund | 70-100% | _ | 0-30% | High |
| 15 | BSE 500 Enhanced Value 50 Fund | 60-100% | _ | 0-40% | High |
i. Premium Allocation Charges
No Charge.
ii. Fund Management Charges
| S no | Fund | FMC (p.a.) |
| 1 | Emerging Leaders Equity Fund | 1.35% |
| 2 | India Multi Cap Equity Fund | 1.35% |
| 3 | Equity Il Fund | 1.35% |
| 4 | Growth Plus Fund | 1.35% |
| 5 | Balanced Plus Fund | 1.35% |
| 6 | India Manufacturing Fund | 1.35% |
| 7 | Nifty Alpha 50 Index Fund | 1.35% |
| 8 | Multicap Momentum Quality Index Fund | 1.35% |
| 9 | Nifty 500 Multifactor 50 Index Fund | 1.35% |
| 10 | Debt Fund | 1.00% |
| 11 | Large Cap Advantage Fund | 1.00% |
| 12 | Midcap Momentum Growth Index Fund | 1.35% |
| 13 | NextGen Consumption Fund | 1.35% |
| 14 | BSE 500 Enhanced Value 50 Fund | 1.35% |
| 15 | Liquid Fund | 0.80% |
|
| Discontinued Policy Fund (DPF)* | 0.50% |
iii. Policy Administration Charges
Year 1: 1.00% p.a. n(0.0833% p.m.)
Year 2 to 10: 3.00% p.a. (0.250% p.m.)
The charges will be deducted monthly, subject to a maximum of ₹ 500 per month.
iv. 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.
v. 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 |
vi. Premium Funding Benefit (PFB) Charges
This charge is only applicable to the Promise4 Wealth Shield option.
The Premium Funding Benefit Charge will apply to the Present Value of Future Premiums payable by the Life Assured for an in-force Policy.
vii. Partial Withdrawal Charges
No Charge.
viii. Switches Charges
No Charge.
ix. Miscellaneous Charges
No Charge
Impact of Charges: The Canara HSBC Promise4 Wealth Plan levies various charges throughout the policy term. Although the mortality and policy administration charges are refunded at maturity, the amount forfeits the benefit of long-term compounding during the investment period.
As a result, these recurring charges can gradually erode the corpus and reduce the plan’s overall return potential.
Grace Period
You have a period of 30 days for Annual, Half Yearly and Quarterly modes 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 the 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 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 Policy shall continue to be in Reduced Paid-up status.
The Fund Value shall be paid to the Canara HSBC Promise4 Wealth Plan Policyholder at the end of the Revival Period or at the end of the Policy Term, whichever is earlier.
Revival
The policy can be revived within a period of three consecutive years from the date of the first unpaid premium.
Free Look Period for the Canara HSBC Promise4 Wealth
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).
The Policyholder can surrender this Policy at any time. However, the Canara HSBC Promise4 Wealth Plan Policy cannot be surrendered after the death of the Life Assured under the Promise4 Wealth Shield plan option.
Surrender of Policy during Lock-in Period (during the first five years): The Fund Value after deduction of applicable Surrender Charges is transferred to the DPF, and the proceeds of the discontinued policy shall be refunded to the Policyholder only after completion of the Lock-in Period.
Surrender of Policy after the Lock-in Period (after the first five years): The Policyholder has the option to surrender the Policy anytime, and the Fund Value shall be payable.
Under the Canara HSBC Promise4 Wealth Plan, premiums are paid for a specified period, and the accumulated fund value is payable at the end of the policy term.
To assess the plan objectively, it is useful to evaluate its Internal Rate of Return (IRR), as this allows for a meaningful comparison with other long-term investment options.
Consider a 30-year-old male purchasing the Canara HSBC Promise4 Wealth Plan with a sum assured of ₹12 lakhs, a policy term of 15 years, a premium payment term of 15 years, and an annual premium of ₹1,20,000. For this illustration, the Promise4 Wealth Maximiser option is selected.
| Male | 30 years |
| Sum Assured | ₹ 12,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 1,20,000 |
According to the benefit illustration, the maturity benefit depends on the market value of the underlying funds.
The insurer provides projections based on assumed investment returns of 4% and 8%. These are only illustrative assumptions prescribed by the regulator and are not guaranteed. The actual maturity value will vary depending on the performance of the selected funds.
|
|
| 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 | 12,00,000 | -1,20,000 | 12,00,000 |
| 23 | 3 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 24 | 4 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 25 | 5 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 26 | 6 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 27 | 7 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 28 | 8 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 29 | 9 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 30 | 10 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 31 | 11 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 32 | 12 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 33 | 13 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 34 | 14 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 35 | 15 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 36 |
| 23,35,640 |
| 32,28,741 |
|
|
|
|
|
|
|
|
|
| IRR | 3.19% |
| 7.01% |
|
Even under the higher return assumption, the effective return remains relatively modest for a long-term market-linked investment.
Investors seeking long-term wealth creation may find better risk-adjusted outcomes through standalone investment products.
Additionally, the ₹12 lakh sum assured is unlikely to provide adequate financial protection for a family’s future needs, limiting the plan’s effectiveness as a life insurance solution.
Overall, the Canara HSBC Promise4 Wealth Plan falls short on both fronts. It neither offers competitive long-term wealth creation nor provides sufficient life insurance coverage, making it a less compelling choice for investors looking to separate their investment and protection needs.
The IRR analysis indicates that the Canara HSBC Promise4 Wealth Plan may not generate returns that comfortably outpace inflation over the long term.
Since the cost of financial goals rises with inflation, earning returns that merely match or fall below inflation can reduce the purchasing power of the accumulated corpus.
To evaluate whether a better approach exists, let us compare the plan with a strategy that separates insurance and investment using the same assumptions from the previous illustration.
For insurance, a pure-term life insurance policy offering a sum assured of ₹12 lakhs costs approximately ₹3,800 per year for a 15-year policy term with a 15-year premium payment term.
In comparison, the Canara HSBC Promise4 Wealth Plan requires an annual premium of ₹1,20,000. By choosing a pure-term policy, the remaining ₹1,16,200 each year can be invested separately in products aligned with the investor’s risk profile.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 12,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 3,800 |
| Investment | ₹ 1,16,200 |
|
|
| 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 | 12,00,000 | -1,20,000 | 12,00,000 |
| 23 | 3 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 24 | 4 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 25 | 5 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 26 | 6 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 27 | 7 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 28 | 8 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 29 | 9 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 30 | 10 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 31 | 11 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 32 | 12 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 33 | 13 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 34 | 14 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 35 | 15 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 36 |
| 31,51,506 |
| 44,78,765 |
|
|
|
|
|
|
|
|
|
| IRR | 6.73% |
| 10.74% |
|
A low-risk investor may choose a Public Provident Fund (PPF). Investing ₹1,16,200 annually for 15 years results in an estimated maturity value of ₹31.51 lakhs, translating into an IRR of 6.73%.
Despite being a government-backed debt instrument, the return is broadly comparable to the 7.01% IRR generated by the Canara HSBC Promise4 Wealth Plan under the assumed 8% market return scenario.
A high-risk investor may instead invest the same amount in equity mutual funds. Assuming the same investment period, the corpus grows to ₹48.51 lakhs before tax.
After accounting for capital gains tax, the post-tax maturity value is ₹44.78 lakhs, resulting in a post-tax IRR of 10.74%.
Besides the potential for higher long-term returns, equity mutual funds also provide greater flexibility, transparency, and liquidity than a ULIP.
| ELSS Tax Calculation |
|
| Maturity value after 15 years | 48,51,731 |
| Purchase price | 17,43,000 |
| Long-Term Capital Gains | 31,08,731 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 29,83,731 |
| Tax paid on LTCG | 3,72,966 |
| Maturity value after tax | 44,78,765 |
This comparison illustrates the benefit of separating insurance from investment. A pure-term insurance policy provides dedicated life cover at a fraction of the cost, while investing the remaining amount in suitable financial instruments can significantly improve long-term wealth creation.
Consequently, the Canara HSBC Promise4 Wealth Plan may not be the most efficient option for investors seeking both adequate protection and meaningful corpus growth for their financial goals.
The Canara HSBC Promise4 Wealth Plan is available in three variants—focused on wealth accumulation, wealth creation with waiver-of-premium benefits, and whole-life coverage until age 100.
While the plan is positioned as a customisable market-linked solution that combines insurance with investment, its overall value proposition is less compelling when evaluated from a long-term financial planning perspective.
The IRR analysis shows that the plan’s effective returns are relatively modest for a market-linked product, primarily due to the various charges levied during the policy term.
Although certain charges are refunded at maturity, the deducted amounts lose the opportunity to compound throughout the investment period, reducing the plan’s long-term wealth creation potential.
In addition, the life cover offered under the plan may be inadequate to provide meaningful financial protection for a family’s future needs and it also has a high agent commission.
For most investors, combining life insurance and investment into a single product is unlikely to be the most efficient strategy.
A pure-term life insurance policy can provide substantially higher life cover at a much lower cost, while the premium savings can be invested separately in a well-diversified portfolio of debt and equity investments based on individual risk tolerance and financial goals.
This approach offers greater flexibility, transparency, liquidity, and the potential for superior long-term outcomes.
Overall, the Canara HSBC Promise4 Wealth Plan is not an ideal choice for long-term wealth creation or comprehensive financial protection.
Investors seeking to build wealth while adequately safeguarding their family’s future may be better served by separating insurance and investment decisions.
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