ICICI Pru Life Stage Wealth II Insurance Plan review

Tuesday, April 5, 2011, 9:33 by Business Editor

ICICI Pru Life Stage Wealth II Insurance Plan is a unit linked insurance plan that lets you choose from a bouquet of investment options depending on your appetite for risk. And, of course, offers multiple choices to decide how a policyholder’s savings would be invested based on his risk appetite.

So what are the investment options it offers:

  • Fixed Portfolio Strategy: This gives you the option to allocate your savings in the funds of your choice.
  • LifeCycle based Portfolio Strategy: This offers an option to create an ideal balance between equity and debt, based on your age. This usually involves putting bigger chunk of your money into equity-heavy funds in the years (to maximize returns) and then gradually moving them into debt-oriented funds (to minimize risk). The table below shows how your funds will be allocated depending on your age:
Age of Policyholder (in years) Multi Cap Growth Fund (Equity based) Income Fund (Debt based)
0-25 85% 15%
26-35 75% 25%
36-45 65% 35%
46-55 55% 45%
56-65 45% 55%
66-75 35% 65%
  • Trigger Portfolio Strategy: Here the objective is to ensure that gains—if any—made in equity markets are protected against volatility. So every time the NAV of the fund you are invested in jumps more than 15%, the gains are transferred into a debt fund to make sure that gains are protected. Also read: ICICI Pru Pinnacle II ULIP risk+investment policy review

Now let us have a look at some of the other benefits ICICI Prudential Life Stage Wealth II Insurance Plan has to offer

Ø  Top up: You have the flexibility to invest surplus money over and above your regular premiums but you must add at least Rs. 2,000 to the kitty.

Ø  Loyalty Additions: Paid at the end of every policy year, starting from the 10th policy year, on payment of all due premiums.

Ø  Tax Benefits: The premiums paid are tax deductible from your annual income up to a maximum of Rs 1 lakh (across all investments). The maturity benefits—the profit you make over time—to is tax free.

Ø  Flexible premium payment options: The policyholder can either pay premium throughout the policy term or for a limited period.

Having gone through the key benefits of this plan, let’s now examine its various aspects in detail.

ICICI Pru LifeStage Wealth II at a glance
Minimum Premium
Premium payment option Minimum annual premium (Rs)
Regular Pay 24,000
Limited Pay 5 48,000
Limited Pay 7 36,000
Limited Pay 10 24,000
Maximum Premium Rs. 100,000 per annum for all premium payment

options

Modes of Premium Payment Yearly / Half yearly / Monthly
Premium Payment Term (PPT)
Premium payment option Premium payment term
Regular Pay Policy Term
Limited Pay 5 5 years
Limited Pay 7 7 years
Limited Pay 10 10 years
Policy Term 10, 15, 20, 25, or 30 years
Minimum Sum Assured for

Age at entry below 45 years

Higher of (10 × annual premium) and

(0.5 × Policy Term × annual premium)

Minimum Sum Assured for

Age at entry 45 years & above

Higher of (7 × annual premium) and

(0.25 × Policy Term × annual premium)

Maximum Sum Assured As per maximum Sum Assured multiples
Min/Max Age at Entry 7 / 65 years
Min/Max Age At Maturity 18 / 75 years
Tax Benefits Premium and any benefit amount received under this policy will be eligible for the tax benefit as per the prevailing Income Tax laws.

Investment Options (Funds)

This unit-linked insurance policy gives you the following array of 8 investment options (funds), each having a varied proportion of equity and debt, for you to choose from (based on your risk appetite and expectations of returns) –

Fund name Asset classes invested in (as a % of overall fund portfolio)
Bank Deposits & Money Market Instruments Equities Government Securitiess, Bonds, Fixed Deposits
Opportunities Fund ( This fund aims to generate superior long-term returns from a diversified portfolio of equity and equity related instruments of companies operating in four important types of industries viz., Resources, Investment-related, Consumption-related and Human Capital leveraged industries.) 0-20% 80-100% 0-20%
Multi Cap Growth Fund (This fund aims to generate superior long-term returns from a diversified portfolio of equity and equity related instruments of large, mid and small cap companies.) 0-20% 80-100% 0-20%
Bluechip Fund(This fund aims to provide long-term capital appreciation from equity portfolio predominantly invested in NIFTY scrips.) 0-20% 80-100% 0-20%
Multi Cap Balanced Fund (This fund aims to achieve a balance between capital appreciation and stable returns by investing in a mix of equity and equity related instruments of large, mid and small cap companies and debt and debt related instruments.) 40-100% 0-60% 40-100%
Income Fund (This fund aims to provide accumulation of income through investment in various fixed income securities. The fund seeks to provide capital appreciation while maintaining a suitable balance between return, safety and liquidity.) 0-100% 0-100%
Money Market Fund (This fund aims to provide suitable returns through low risk investments in debt

and money market instruments while attempting to protect the capital deployed in the fund.)

50-100% 0-50%
Return Guarantee Fund (This fund aims to provide guaranteed returns through investment in a diversified portfolio of high quality fixed income instruments.) 0-100% 0-100%
Fund Name & Its Objective P / E Range Allocation in Equity and

Equity related securities

Risk-Reward

Profile

Dynamic P/E Fund (This fund aims to provide long term capital appreciation through dynamic asset allocation between equity and debt. The allocation in equity and equity related securities is determined by reference to the P/E multiple on the NIFTY 50 ; the remainder is to be invested in debt instruments, money market and cash.) <14 90% to 100% High
14 – 16 80% to 100%
16 – 18 60% to 100%
18 – 20 40% to 80%
>20 0% to 40%

Surrender Benefit

Surrenders are not allowed during the first five policy years. On surrender after completion of the fifth policy year, the policy shall terminate and Fund Value, including Top up Fund value, if any, will be paid to the policyholder.

Tax Benefit

Tax benefits under the policy will be as per the prevailing Income Tax laws.

Policy Termination

If the Life Assured, whether sane or insane, commits suicide within one year from the date of issue of this policy, only the fund value, including Top up Fund Value, if any, would be payable. If the Life Assured, whether sane or insane, commits suicide within one year from the effective date of increase in Sum Assured, then the amount of increase shall not be considered in the calculation of the death benefit.


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