ICICI Prudential Life Insurance on Monday launched a debt fund ICICI Pru Constant Maturity Fund, which will enable customers to lock in their investments at current high-interest rates and build long-term wealth.
"The prevailing interest rate regime provides customers with an excellent opportunity to invest in the debt fund - ICICI Pru Constant Maturity Fund - the first such fund in the life insurance market. With interest rates closer to their peak, any fall in interest rates makes debt instruments attractive as an investment option for customers," the company said.
It added that this was due to the inverse relationship between the prices of debt instruments and interest rates. The prices of debt instruments increase when interest rates fall.
This fund is available for investments with the company's flagship unit-linked insurance plans (ULIP). The fund will be available with ULIPs from May 15, 2023.
"ULIPs also offer customers a tax-efficient mode of building long-term savings as they can invest up to 250,000 annually for the duration of the policy and take home a tax-free maturity amount," said Srinivas Balasubramanian, head of products, ICICI Prudential Life Insurance.
"With the interest rate cycle closer to its peak, it is a great opportunity for customers to channelise investments to the ICICI Pru Constant Maturity Fund. We suggest investors apportion a share of their savings to ULIP debt funds for capital preservation and long-term wealth creation," said Arun Srinivasan, head of fixed income, ICICI Prudential Life Insurance.
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"By investing in this fund, customers will be able to lock in their investments at the high current interest rates and benefit from increasing NAV of the fund since bond prices are expected to rise over time," he added.
How to invest in the fund?
Customers have the option of investing in this fund through the company's ULIP offerings like ICICI Pru Signature, ICICI Pru Smart Life, and ICICI Pru LifeTime Classic. Customers can reach out to their advisors or visit the company website to buy these plans.
