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ICICI Pru Smart Life Plan

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ICICI Pru Smart Life Plan Summary

ICICI Pru Smart Life Plan is an investment cum insurance plan. The uniqueness of this plan is that it provides a lumpsum amount to the nominee in case of death of the policyholder and then waives off all future premiums, but the addition of units will continue as if the plan is regular. On Maturity, the nominee will receive the Fund Value also. The plan also has an investment strategy option which is based on ideal balance between equity and debt aligned to your age. 

We will explain these in detail in the later sections.
 
Policy Type UIN
ULIP 105L145V05

Note: There have been 4 earlier versions of this plan with UIN 105L145V01, 105L145V02, 105L145V03 and 105L145V04.

Important - In this plan, you have to stay invested for at least 5 years. You cannot withdraw your investment before 5 years under any circumstances. While this reduces flexibility, it also forces you to stay invested and thereby making it a long term investment tool.


Key features of ICICI Prudential Smart Life Plan

  • Investment cum insurance plan with comprehensive protection
    • Sum assured paid as death benefit
    • All future premiums waived off and investment continues
  • Choice of 2 investment strategies
  • Wealth Boosters & Loyalty Additions for staying invested in the long term
  • Partial withdrawals after 5 policy years 
  • Tax exemptions under Sec 80C and Sec 10(10D). As per current income tax rules, ensure that the life cover is at least 10 times the annual premiums paid, to avail these tax benefits.

COMPARE THIS PLAN WITH OTHER ULIP PLANS


Eligibility Criteria in ICICI Pru Smart Life Policy

In this plan you can pay premiums as single pay, regular pay or limited pay. The eligibility criteria will be based on them and will be as follows:

Regular Pay
 
Premium Payment Term Same as policy term
Minimum Premium Entry Age Premium
20 - 49 years Rs. 45,000 p.a.
50 - 52 years Rs. 1,20,000 p.a.
53 - 54 years Rs. 5,00,000 p.a.
Maximum Premium No limit
Premium payment mode Annual, Half-yearly, Monthly
Min / Max Policy Term 10 years / 25 years
Min / Max Entry Age 20 years / 54 years
Min / Max Maturity Age 30 years / 64 years
Sum Assured Entry Age Minimum Maximum
20 - 25 years 7 x AP 30 x AP
26 - 30 years 7 x AP 25 x AP
31 - 35 years 7 x AP 15 x AP
36 - 40 years 7 x AP 15 x AP
41 - 44 years 7 x AP 15 x AP
45 - 54 years 7 x AP 10 x AP

AP - Annualised Premium

Limited Pay
 
Premium Payment Term (PPT) 5 / 7 / 10 years
Minimum Premium Rs. 45,000 p. a.
Maximum Premium No limit
Premium payment modes Annual, Half-yearly, Monthly
Min / Max Policy Term (PT) 5 Pay & 7 Pay - 10 years / 25 years
10 Pay - 10 years / 25 years
Min / Max Policy Term 30 years / 64 years
Sum Assured Minimum: 7 x Annual Premium
Maximum: Higher of (10 x Annual Premium) & (0.5 x Policy Term x Annual Premium) 
Sum Assured 45 - 54 years 7 x AP 10 x AP
Minimum Age at Entry 20 years        
Maximum Age at Entry PT 10 11-15 16-20 21-25
5 pay 45 43 41 36
7 pay 48 46 43 37
10 pay NA 46 43 37

One Pay - Single Premium
 
Sum Assured Entry Age Minimum Maximum
Upto 35 years 1.25 x SP 10 x SP
> 35 years 1.25 x SP 1.25 x SP
Policy Term 10 years
Min / Max Entry Age 20 / 54 years
Min / Max Maturity Age 30 / 64 years

Important Note: As per current income tax rules, if the Sum Assured in the plan is not 10 times the Annualised Premium, you will not get complete tax benefits on premiums paid and the maturity amounts. So be very careful about this.
 

How is your money invested in this plan?

In this plan, you have 2 investment strategies. They are as follows:
  1. Fixed Portfolio Strategy
  2. Life Cycle Based Portfolio Strategy 2

Fixed Portfolio Strategy - In this you can decide on the choice of funds. You can choose how much you want to invest in each of the below mentioned funds. Switching and redirecting funds will have to be done by you.

The returns in your plan will depend on your choice of funds. So it is very important to choose them wisely. If you choose a Low Risk fund, the chances of returns will not be very high but will be stable. These funds are managed by experienced fund managers of ICICI Prudential Life Insurance.
 
Fund Name Fund Composition Risk & Reward Profile
Money Market Instruments & Cash Debt Equity & Equity Related Securities
Focus 50 0% to 10%
 
0% to 10% 90% to 100%
 
High
Opportunities 0% to 20%
 
0% to 20% 80% to 100%
 
High
Value Enhancer 0% to 15%
 
0% to 15% 85% to 100%
 
High
Multi Cap Growth 0% to 20% 0% to 20% 80% to 100%
 
High
Bluechip 0% to 20% 0% to 20% 80% to 100%
 
High
India Growth 0% to 20% 0% to 20% 80% to 100%
 
High
Maximizer V 0% to 25% 0% to 25% 75% to 100%
 
High
Maximizer India 0% to 20% 0% to 20% 80% to 100% High
Multi Cap Balanced 0% to 50%
 
20% to 70%
 
0% to 60%
 
Moderate
Active Asset Allocation Balanced
 
0% to 40% 30% to 70% 30% to 70%
 
Moderate
Secure Opportunities 0% to 40% 60% to 100% -
 
Low
Income 0% to 60% 40% to 100% - Low
Money Market 50% to 100% 0% to 50% - Low

You can use the Automatic Transfer Strategy option also - most useful for Annual modes of payment. You basically make use of rupee cost averaging. You can invest your money in the low-risk Money Market Fund or Income Fund and then give instructions to transfer a fixed amount to any other more aggressive funds. 


Life Cycle Based Portfolio Strategy 2 - The key features of this strategy can be summarised as follows:
  • Age based portfolio management - based on your age, your money is invested into the 2 funds as mentioned below. As you grow older, your funds are re-distributed. AS you can see, in the younger age bands, your money is invested in the more aggressive fund.
Age Multi Cap Growth Fund Income Fund
20 - 25 years 80% 20%
26 - 35 years 75% 25%
36 - 45 years 65% 35%
46 - 55 years 55% 45%
56 - 65 years 45% 55%
  • Quarterly re-balancing - On a quarterly basis, the re-balancing is done to achieve the above mentioned proportions
  • Safety as you approach maturity - As you can see in the table, with increase in age, the money is parked in the conservative Income Fund. 
 

Benefits in ICICI Pru Smart Life Policy

This is an investment plan, so benefits to a large extent will depend on how your investments perform over time.

Maturity Benefit

On maturity, you will receive higher of the following:
  • Fund Value
  • 105% of Premiums paid

Loyalty Additions & Wealth Boostes

If you have been paying premiums on time, extra units will be allotted as follows:
 
Benefit When Amount
Loyalty Additions End of every policy year, starting from the end of the 6th policy year 0.25%
Additional Loyalty Additions End of every policy year, starting from the end of the 6th policy year if the premium for that year has been paid 0.25%
Wealth Boosters End of every fifth policy year, starting from the end of the 10th policy year One pay - 1.5%
Others - 3.25%

Note: Amount of Loyalty additions & Wealth Boosters is shown as a % of the average Fund Value of the last 8 policy quarters


Death Benefit

In the unfortunate event of the death of the policyholder, the nominee will get the following:

Highest of:
  • Sum Assured
  • 105% of the premiums paid

In addition, as part of the Smart Benefit feature of this plan, units equivalent to the instalment premium will be allocated by the Company on the subsequent premium due dates. This is not applicable for the One pay Option. On maturity, the nominee will receive the Fund Value.
 

Other Benefits
  • Switching between funds - in case you have selected the Fixed Portfolio Strategy, you can move your investment between the different fund options
  • Unit Linked Accidental Death Rider - This benefit can be availed by paying extra premiums
  • Top-up - You can pay additional premiums to add to your investment as and when you have extra liquidity
  • Premium Redirection - Your future premiums can be re-directed any funds of your choice if you have selected the Fixed Portfolio Strategy
  • Partial Withdrawals - After 5 years, you can make partial withdrawals from your policy to meet any financial requirements. There will be caps on how much can be withdrawn
  • Decrease in Sum Assured - You can decrease the amount of cover which you opted for initially. This will not result in lower premiums. Once decreased, the cover amount cannot be increased
  • Decrease in Policy Term - This can be changed if it fits into the overall conditions of the policy 


Charges in ICICI Pru Smart Life Plan

The list of charges applicable in this plan are as mentioned below. 

Premium Allocation Charge - This is charged by deducting the amount from your premiums before they are invested in any funds. So this charge is as a % of the premiums.
  • One pay - 3%
  • For Limited pay and Regular pay
Premium payment mode Year 1 Year 2 Year 3 Year 5 Year 6+
Annual 6% 5% 4% 4% 2%
Half-yearly, Monthly 4% 4% 3,5% 3% 2%

Policy Administration Charge - Max. Rs. 500 per month. This charge is deducted every month by cancelling the appropriate number of units.
  • One pay - Rs. 60 per month for the 1st five policy years
  • For Limited pay and Regular pay
Policy Year % of Annual Premium
1 to 5 0.21% per month (2.52% p.a.)
6 onwards 0.1% per month (1.20% p.a.)

Fund Management Charge - 1.35% per annum for all funds except Money Market Fund. For the Money Market Fund, it is charged at 0.75% per annum. In the Discontinued Policy Fund, this charge is 0.5% per annum. This is charged daily by adjusting the NAV of the funds. 

Mortality Charge - This will depend on your age and the amount of cover. This charge is deducted every month. This charge is deducted every month by cancelling appropriate number of units.

Discontinuation Charge - This is charged by cancelling units you hold. They are as follows:

For Limited pay and Regular pay options 
 
Year of Discontinuance Annual Premium upto Rs. 50,000 Annual Premium > Rs. 50,000
1 Lower of 20% x (AP or FV) subject to a max of Rs. 3,000 Lower of 6% x (AP or FV) subject to a max of Rs. 6,000
2 Lower of 15% x (AP or FV) subject to a max of Rs. 2,000 Lower of 4% x (AP or FV) subject to a max of Rs. 5,000
3 Lower of 10% x (AP or FV) subject to a max of Rs. 1,500 Lower of 3% x (AP or FV) subject to a max of Rs. 4,000
4 Lower of 5% x (AP or FV) subject to a max of Rs. 1,000 Lower of 2% x (AP or FV) subject to a max of Rs. 2,000
5+ Nil Nil

AP - Annual Premium
FV - Fund Value of Date of Discontinuance

For One pay option 
 
Year of Discontinuance Single Premium < Rs. 3,00,000 Single Premium > Rs. 3,00,000
1 Lower of 2% x (SP or FV) subject to a max of Rs. 3,000 Lower of 1% x (SP or FV) subject to a max of Rs. 6,000
2 Lower of 1.5% x (SP or FV) subject to a max of Rs. 2,000 Lower of 0.7% x (SP or FV) subject to a max of Rs. 5,000
3 Lower of 1% x (SP or FV) subject to a max of Rs. 1,500 Lower of 0.5% x (SP or FV) subject to a max of Rs. 4,000
4 Lower of 0.5% x (SP or FV) subject to a max of Rs. 1,000 Lower of 0.35% x (SP or FV) subject to a max of Rs. 2,000
5+ Nil Nil

SP - Single Premium
FV - Fund Value of Date of Discontinuance
 

What happens when you stop paying the premiums before 5 years?

If the premiums are not paid by the end of the grace period, the plan will be withdrawn and discontinued. This is what will happen:
  • There will be no more risk coverage offered.
  • The Fund Value on the date of discontinuance will be moved to the “Discontinued Policy Fund”.
  • This fund will now earn a minimum guaranteed interest rate of 4% (as per current regulations).
  • A Fund Management Charge of 0.5% per annum would be applicable.
  • The Fund Value will be paid out at the end of 5 years and the policy terminates
That pretty much explains how ICICI Pru Smart Life Plan works and the benefits you get out of it. If you have any questions on this plan, drop in a line in the comments and we will be happy to help out.

 
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