Digit Icon Guaranteed Savings Plan – Lumpsum Variant: Good or Bad? An Insightful Review
Is the Digit Icon Guaranteed Savings Plan truly the key to a secure future, or just another overhyped insurance pitch?
Can the Digit Icon Guaranteed Savings Plan really deliver guaranteed peace of mind, or are you better off exploring other options?
Does the Digit Icon Guaranteed Savings Plan genuinely balance savings and protection, or is it hiding high costs behind promises?
This article explores the plan’s key features, benefits, and drawbacks — along with a detailed illustration to help you evaluate its effectiveness.
What is the Digit Icon Guaranteed Savings Plan – Lumpsum?
What are the features of the Digit Icon Guaranteed Savings Plan – Lumpsum?
What are the plan variants in the Digit Icon Guaranteed Savings Plan – Lumpsum?
What are the benefits of the Digit Icon Guaranteed Savings Plan – Lumpsum?
Grace Period, Discontinuance and Revival of the Digit Icon Guaranteed Savings Plan – Lumpsum
Free Look Period for the Digit Icon Guaranteed Savings Plan- Lumpsum
Surrendering the Digit Icon Guaranteed Savings Plan- Lumpsum
What are the advantages of the Digit Icon Guaranteed Savings Plan – Lumpsum?
What are the disadvantages of the Digit Icon Guaranteed Savings Plan – Lumpsum?
Research Methodology of Digit Icon Guaranteed Savings Plan – Lumpsum
Benefit Illustration – IRR Analysis of Digit Icon Guaranteed Savings Plan – Lumpsum
Digit Icon Guaranteed Savings Plan – Lumpsum Vs. Other Investments
Digit Icon Guaranteed Savings Plan – Lumpsum Vs. Pure-term + Equity Mutual Fund
Final Verdict on the Digit Icon Guaranteed Savings Plan – Lumpsum
Digit Icon Guaranteed Savings Plan is a non-linked, non-participating individual life insurance savings plan. It provides both life insurance protection and guaranteed income or maturity benefits, depending on the variant chosen by the Digit Icon Guaranteed Savings Plan policyholder.
There are four variants under the plan.
This article focuses on the Lump sum benefit variant.
For Single Life (with only one Life Assured under the Digit Icon Guaranteed Savings Plan Policy), the Death Benefit payable shall be the highest of the following:
For Joint Life (with two lives being assured under the Policy)
Under Joint Life, two lives will be covered under one Policy. Joint Life Option shall be available for the Single Premium Policy only.
In case of the first death during the Digit Icon Guaranteed Savings Plan Policy Term, the Death Benefit equal to 1.25 times of Single Premium shall be payable. The Policy shall continue till the occurrence of the second death or till Policy Maturity Date, whichever is earlier.
In case of second death during the Digit Icon Guaranteed Savings Plan Policy Term, the Death Benefit equal to 10 times of Single Premium plus accrued Special Additions, if any, shall be payable.
Accidental Death Benefit is an in-built feature
No Survival Benefit / Guaranteed Income shall be payable during the Digit Icon Guaranteed Savings Plan Policy Term under the Lump Sum Benefit Variant
If the Life Insured (at least one of the two lives in case of joint life) has survived until the Digit Icon Guaranteed Savings Plan Policy Maturity Date, provided the Policy is In Force, the company shall pay either the lump sum Maturity Benefit or Staggered Maturity Benefit (as chosen by the Policyholder) as under:
Lumpsum Maturity Benefit shall be equal to Sum Assured on Maturity + accrued Special Additions, if any.
Staggered Maturity Benefit: Policyholder can choose to receive it in the form of a regular stream of Guaranteed Income after the Policy Maturity Date, over a chosen period called staggered maturity period and a lump sum amount (if opted for) at the end of such staggered maturity period.
However, no Death benefit will be available during the staggered maturity period.
Grace Period
A Grace Period of fifteen (15) days from the due date of the first unpaid Premium for Policies with a monthly Premium payment frequency and thirty (30) days from the due date of the first unpaid Premium for all other available Premium payment frequencies will be allowed for the payment of each due Premium instalment.
Discontinuance
Lapse: If at least one full year’s Premiums have not been paid, the Policy will lapse on the expiry of the Grace Period until the Digit Icon Guaranteed Savings Plan Policy is revived for full Benefits within the Revival Period.
Reduced paid-up: If at least one full year’s Premiums have been paid and if any subsequent Premium which is due has not been paid by the end of the Grace Period, the Policy will acquire reduced paid-up status, and the Digit Icon Guaranteed Savings Plan Policyholder / Claimant will be eligible for Reduced Paid-up Benefit.
Revival
If the Digit Icon Guaranteed Savings Plan policy is in lapsed or in reduced paid-up status, it may be revived for full Benefits before the Policy Maturity Date, but within five years from the due date for payment of the first unpaid Premium.
If you do not agree with the terms and conditions of the Digit Icon Guaranteed Savings Plan Policy, you have the option to request cancellation of the Policy by returning the original Policy Document (in case the physical copy of the Policy Document was sent to the Policyholder) along with a written request stating the reasons for objection within 30 days from the date of receipt of the Policy Document.
In case of Single Premium Policies, the Digit Icon Guaranteed Savings Plan Policy can be surrendered at any time after the Policy Commencement Date.
For Limited Pay and Regular Pay Policies, the Digit Icon Guaranteed Savings Plan Policy can be surrendered any time after completion of the first Policy Year, provided at least one full year’s Premiums have been paid.
The Surrender Value payable shall be the higher of Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV).
When choosing an investment option, it’s essential to align it with your cash flow needs and evaluate the returns it offers. Let’s examine a benefit illustration from the Digit Icon Guaranteed Savings Plan policy brochure to understand the plan’s cash flow pattern and overall value.
Consider a 35-year-old male who opts for the Lump Sum Benefit under the Digit Icon Guaranteed Savings Plan. He selects a sum assured of ₹10 lakhs with a 10-year policy term and a 5-year premium payment term, paying an annual premium of ₹1,00,000.
| Male | 35 years |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 10 years |
| Premium Paying Term | 5 years |
| Annualised Premium | ₹ 1,00,000 |
Under this option, the maturity benefit is paid as a single lump sum at the end of the Digit Icon Guaranteed Savings Plan policy term.
At maturity, he receives ₹6.74 lakhs, translating to an Internal Rate of Return (IRR) of just 3.80% as per the Digit Icon Guaranteed Savings Plan maturity calculator, — a rather unattractive figure for a long-term investment.
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -1,00,000 | 10,00,000 |
| 36 | 2 | -1,00,000 | 10,00,000 |
| 37 | 3 | -1,00,000 | 10,00,000 |
| 38 | 4 | -1,00,000 | 10,00,000 |
| 39 | 5 | -1,00,000 | 10,00,000 |
| 40 | 6 | 0 | 10,00,000 |
| 41 | 7 | 0 | 10,00,000 |
| 42 | 8 | 0 | 10,00,000 |
| 43 | 9 | 0 | 10,00,000 |
| 44 | 10 | 0 | 10,00,000 |
| 45 | 6,74,903 | ||
| IRR | 3.80% |
Moreover, since the Lump Sum Benefit option does not provide any regular income (survival benefits) during the term, the low IRR further indicates that the alternative benefit option (with periodic payouts) would likely generate even lower returns.
Adding to this, the sum assured is insufficient to offer meaningful life protection.
Considering the low returns and inadequate coverage, the Digit Icon Guaranteed Savings Plan – Lump Sum Option is not a suitable choice for individuals aiming to achieve their long-term financial goals.
An investment that earns less than the inflation rate over the long term ultimately erodes your wealth rather than growing it. The Digit Icon Guaranteed Savings Plan attempts to blend life insurance with guaranteed returns, but this combination often limits your earning potential.
A more effective strategy is to separate insurance and investment, allowing each to serve its specific purpose efficiently. Let’s understand how this approach works through an example.
Using the same parameters from the earlier illustration:
A pure-term life insurance policy with a sum assured of ₹10 lakhs costs an annual premium of ₹7,700, with a 5-year premium-paying term and a 10-year policy term. This leaves ₹92,300 per year available for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 10 years |
| Premium Paying Term | 5 years |
| Annualised Premium | ₹ 7,700 |
| Investment | ₹ 92,300 |
Depending on one’s risk appetite, the investment portion can be directed into suitable instruments — equity instruments for growth-oriented investors or debt products for conservative ones. For this comparison, let’s assume the amount is invested in an equity mutual fund scheme.
| Term insurance + Equity Mutual Fund | |||
| Age | Year | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 35 | 1 | -1,00,000 | 10,00,000 |
| 36 | 2 | -1,00,000 | 10,00,000 |
| 37 | 3 | -1,00,000 | 10,00,000 |
| 38 | 4 | -1,00,000 | 10,00,000 |
| 39 | 5 | -1,00,000 | 10,00,000 |
| 40 | 6 | 0 | 10,00,000 |
| 41 | 7 | 0 | 10,00,000 |
| 42 | 8 | 0 | 10,00,000 |
| 43 | 9 | 0 | 10,00,000 |
| 44 | 10 | 0 | 10,00,000 |
| 45 | 10,86,025 | ||
| IRR | 10.06% | ||
After 10 years, the equity mutual fund corpus grows to ₹11.57 lakhs. Even after deducting capital gains tax, the post-tax value stands at ₹10.86 lakhs, yielding a post-tax IRR of 10.06%.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 10 years | 11,57,386 |
| Purchase price | 4,61,500 |
| Long-Term Capital Gains | 6,95,886 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 5,70,886 |
| Tax paid on LTCG | 71,361 |
| Maturity value after tax | 10,86,025 |
This alternate strategy not only delivers significantly higher returns but also offers greater flexibility in withdrawals based on changing financial needs. In comparison, the Digit Icon Guaranteed Savings Plan lags in both returns and liquidity, making it a less effective tool for long-term wealth creation.
The Digit Icon Guaranteed Savings Plan is a traditional life insurance policy that combines life cover with guaranteed returns. It offers four plan variants, designed to suit different cash flow preferences.
The Lump Sum variant provides a guaranteed maturity benefit at the end of the Digit Icon Guaranteed Savings Plan policy term, without any additional or complex features.
However, an analysis of the returns reveals that it is a low-yielding product.
Additionally, the sum assured may not be adequate to ensure meaningful financial protection for your family in the event of unforeseen circumstances. These limitations make the plan unattractive as an investment option and it also has a high agent commission.
Since neither the insurance nor the investment component delivers strong value, the Digit Icon Guaranteed Savings Plan is not suitable for inclusion in your investment portfolio.
Instead, you can adopt a more effective approach:
A diversified investment portfolio ensures stability and better long-term growth, while life and health insurance provide a crucial safety net during emergencies.
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For a well-structured financial roadmap, it’s best to consult a Certified Financial Planner (CFP) who can help you make informed and goal-oriented decisions.
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