Guaranteed investment plans are offered by insurance companies.  The insurance company selects the underline funds (equity, bond, and/or index fund) while providing a promise of a guaranteed minimum fund/surrender value.

With the minimum Guaranteed values, they also offer the option to gain returns linked to how multiple financial assets or indicators perform. Investors must take into account that if underlying instruments do not increase as expected, then it is possible not to gain any additional returns above the minimum guaranteed promised.

An income can be selected from Market Linked and Guaranteed investment plans. Most clients will use the income to subside another future requirement like pension income in retirement.

Annuity plans help you to get a regular payment for life after making a lump sum investment. The insurance company invests your lump sum money and pays back the returns generated from it.

Immediate annuity plans:  The plan starts straight away with a lump sum investment and the annuity payment starts immediately (from 12th or 24th month) either for a limited tenure or lifetime.

Deferred annuity: The plan starts straight away with a lump sum investment and the annuity payment starts (from 60th or 121st month) either for a limited tenure or lifetime.

These structures are designed to take advantage of low interest rate borrowing and using the interest rate arbitrage. 

Many investors already engage in some form of leveraging, borrowing money for future gains – having a mortgage is an example.