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ICICI Pru Life Time Classic
ICICI Pru Lifetime Classic Plan Review
ICICI Pru LIfetime Classic is a unit linked insurance policy (ULIP). Being a ULIP if offers both investment and insurance benefits to the customer. The potential to grow the money is much better compared to traditional insurance plans as you can invest in funds with better returns. There are bonuses also in this plan. The plan also has tax benefits under Section 80C and Section 10(10D). In this plan, as in all ULIPs, there is a lock-in period of 5 years. You can buy this plan online and take complete control of the buying and most of the service elements too. We will discuss in detail about the plan in the below section.
ICICI Pru Lifetime Classic
Note: There was an earlier version of the plan with the same name which was discontinued on 11-Jul-2018 before this version was launched. That plan had the UIN as 105L155V01.
How this plan works - You decide on the amount of money you want to invest on a monthly basis (you can invest in annual, quarterly, half-yearly or single mode also). You then select the term of the policy between 10 to 25 years. The premium payment term could be regular, single or limited pay. Based on the premium amount and your age, your life cover gets decided automatically. You can choose to change your life cover too. The money which you pay is invested in the funds of your choice - you have 8 funds to choose from. Based on the amount you invest and the choice of funds, you will be allocated Units of these funds. The value of these funds depends on the NAV which are declared on a daily basis. You can withdraw your money anytime after 5 years.
We will understand this plan better with the help of examples.
COMPARE THIS PLAN WITH OTHER ULIP PLANS
Eligibility Criteria in the ICICI Pru Lifetime Classic Plan
Minimum: 0 Maximum: Single Pay: 75 years, Limited Pay/ Regular Pay : 65 Years
Age at Maturity
Minimum: 18 Maximum: Single Pay: 80 years, Limited Pay/ Regular Pay : 75 Years
Fund Options in the ICICI Pru Lifetime Classic Policy
The premiums paid by you, after deduction of charges (details of charges mentioned later) will be invested in the funds of your choice. There are 9 funds to choose from based on your risk appetite.
Potential Risk-Reward Profile
Maximiser V Fund
Multi Cap Growth Fund
Maximise India Fund
Multi Cap Balanced Fund
Active Asset Allocation Balanced Fund
Money Market Fund
You can invest in more than one fund. You can choose to manage your money yourself or want ICICI Prudential’s fund managers to do this for you. You have the option of 4 Portfolio Strategies to choose from. They are:
Life Cycle based Portfolio Strategy 2 - This strategy is personalized based on age - premium and is invested in 2 funds to create an ideal balance between equity and debt. Generally, younger individuals have a higher appetite for risk, hence the funds are allocated accordingly. You don’t need to actively manage your funds.
Fixed Portfolio Strategy - Invest in your choice of 5 Equity, 2 Debt and 2 Balanced funds to get the potential for better returns over the policy term. You can change the allocation as and when you desire.
Target Asset Allocation Strategy - Invest in 2 funds and ICICI Prudential will maintain the allocation for the full term by rebalancing it every quarter.
Trigger Portfolio Strategy 2 - Based on “Buy low - Sell high” - premium is allocated in 2 funds to take advantage of substantial market swings.
The money invested by you is used to buy units of any of these funds of your choice. The funds have an NAV (Net Asset Value) which is declared every day. So you can track the value of your investments on a regular basis.
Your Investment Value = Units x NAV of Fund
Bonuses in the ICICI Pru Lifetime Classic Policy
The company will offer bonus in the form of Loyalty Additions and Wealth Boosters. This is paid only if all premiums have been paid for 5 years or more. ICICI Prudential will allocate extra units to your investments based on the criteria mentioned below.
Premium Payment Term
(End of Year 6 & 7)
(End of Year 8 & onwards)
(End of every 5th Year,
Starting from the end of
10th Policy Year)
5 - 6 years
7 - 9 years
10 years and above
Loyalty Addition will be a percentage of the average of Daily Fund Values including Top-up Fund Value, if any, in that same policy year.
Wealth Boosters will be a percentage of the average Fund Values including Top-up Fund Value, if any, on the last business day of the last eight policy quarters.
Benefits in the ICICI Pru Lifetime Classic Plan
These are the benefits which will be paid to the nominee in case of death of the policyholder during the policy term.
A = Sum Assured including Top-up Sum Assured, if any (reduced by applicable partial withdrawals, if any) B = Fund Value including Top-up Fund Value, if any C = Minimum Death Benefit will be 105% of the total premiums paid including Top-up premiums, if any.
Death Benefit for Single Pay Policies - Higher of A or B or C Death Benefit for Limited & Regular Pay Policies (entry age < 50) - Higher of (A+B) or, C Death Benefit for Limited & Regular Pay Policies (entry age => 50) - Higher of A or B or C
You get the Fund Value including Top Up Fund Value as the Maturity Benefit.
Flexibilities offered in the ICICI Pru Lifetime Classic Plan
Partial Withdrawal - You can make unlimited number of partial withdrawals from the 6th year onwards, as long as the total amount you withdraw in a year does not exceed 20% of the Fund Value in a policy year. Partial withdrawals are free of cost.
Fund Switch - You can move your investment between 9 funds (equity, debt and balanced) as per your choice. These switches can be done online and are completely tax-free. You can switch your money between funds free of cost up to 4 times in a year. Or you can leave the fund switching to our fund managers too.
Change in Portfolio Strategy - You can change your portfolio strategy up to four times in a policy year free of cost.
Top Up - If you have excess savings which you want to invest in this plan, you can do so at any time before the last 5 years of the policy term. Please keep in mind that there will be a lock-in period of 5 years from the date of Top Up. You will have to top up with a minimum of Rs. 2,000 at a time.
Increase / Decrease of Sum Assured - You can choose to increase or decrease your Sum Assured at any policy anniversary during the policy term provided all due premiums till date have been paid. This will not increase your premium.
Increase / Decrease Premium Payment Term - Provided all due premiums have been paid, you can choose to increase the Premium Payment Term
Increase / Decrease Policy Term - You can do this also by informing the company.
Surrender - You can cancel and withdraw your money completely from the policy at the end of the lock-in period 5 years.
Charges in the ICICI Pru Lifetime Classic Plan
The separate heads of charges are not mentioned in this plan. Collectively, the sum of charges like premium allocation charge, policy administration charge and fund allocation charge works out to be 2.04% per annum. This is after Loyalty Additions and Wealth Boosters which are paid to you. Overall, the charges are on the lower side when compared to the other plans in the market.
Charges for a 35 year old investing Rs. 5,000 per month under Regular Pay work out as follows after adjusting for the Loyalty Additions and Wealth Boosters.
Well, that is pretty much what I wanted to share about this policy. It is a good option to consider and offers good tax benefits with low level of charges. If you have any questions on the ICICI Prudential Life Time Classic Plan, please drop a comment below and we will get back to you.