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Will ICICI Pru Assured Savings Plan be a good Investment Product for your future ambitions?
Does the ICICI Pru Assured Savings Plan provide a sufficient life cover and inflation-beating returns?
Protection and savings are the two most essential aspects of personal finance. Savings cum investment will help you fulfill your critical long-term goals, and insuring yourself thus provides you with a sense of security.
Keeping this in mind, ICICI offers a protection cum savings plan called ICICI Pru Assured Savings Insurance Plan. This plan provides you with guaranteed savings benefits to meet your life goals.
In this review article, let us conduct a research analysis on the basic features, Advantages (Pros), and Disadvantages (Cons). The Research Methodology section will help you gain more insights into the potential returns of the policy.
These all inputs help you understand the plan better and make an informed investment choice.
Table of Contents
1.) What is the ICICI Pru Assured Savings Plan?
2.) What are the Features of the ICICI Pru Assured Savings Plan?
3.) Who is Eligible to invest in the ICICI Pru Assured Savings Plan?
4.) What are the Benefits of ICICI Pru Assured Savings Plan?
5.) ICICI Pru Assured Savings Plan Grace period, Discontinuance and Revival
6.) ICICI Pru Assured Savings Plan Free Look Period
7.) Surrendering ICICI Pru Assured Savings Plan
8.) Advantages of ICICI Pru Assured Savings Plan
9.) Disadvantages of ICICI Pru Assured Savings Plan
10.) ICICI Pru Assured Savings Plan Research Methodology
- ICICI Pru Assured Savings Plan Benefit Illustration – IRR analysis
11.) ICICI Pru Assured Savings Plan VS Other Investment
- ICICI Pru Assured Savings Plan VS Pure Term + PPF / ELSS
- ICICI Pru Assured Saving Plan VS ICICI Pru Gift Pro Plan
- ICICI Pru Assured Savings Plan VS ICICI Pru 1 Wealth Plan
12.) Final Verdict on ICICI Pru Assured Savings Plan
1.) What is the ICICI Pru Assured Savings Plan?
ICICI Pru Assured Savings Plan is a Non-Linked Non-Participating Individual Savings Life Insurance Plan. It provides life insurance coverage to take care of your family in case of your unfortunate demise.
At the end of the policy term, you will receive a guaranteed maturity benefit.
2.) What are the Features of the ICICI Pru Assured Savings Plan?
- Choosing premium payment terms and policy terms as per your needs.
- Get life cover for the entire policy term.
- Guaranteed Additions of either 9% or 10% of total premiums paid will be added every year to your policy.
- A guaranteed lump sum is payable at the end of the policy term.
3.) Who is Eligible to invest in the ICICI Pru Assured Savings Plan?
| Premium payment Term (years) | 5 | 7 | 10 | |||
| Policy term (years) | 10 | 15 | 10 | 12 | 15 | 12 |
| Minimum Annual Premium | 30,000 | 18,000 | 18,000 | 12,000 | ||
| Minimum / Maximum Age at Entry | 8//60 | 3//57 | 8//60 | 6//60 | 3//57 | 6//60 |
| Minimum/ Maximum Age at Maturity | 18/72 | |||||
| Premium Paying Mode | Annual / Half -yearly / Monthly | |||||
4.) What are the Benefits of ICICI Pru Assured Savings Plan?
i.) ICICI Pru Assured Savings Plan Maturity Benefit
If the life assured survives till the policy term provided the policy is in force, then the policyholder is entitled to receive the following amount:
The amount of Maturity Benefit = Accrued Guaranteed Additions payable + Guaranteed Maturity Benefit (GMB) payable
ii.) ICICI Pru Assured Savings Plan Guaranteed Additions
At the end of every policy year, Guaranteed Additions (GA) will be added to the policy. Each Guaranteed Addition is the product of the Guaranteed Additions Rate with the sum of premiums up to date.
| Term | Guaranteed Addition rate |
| 10 years | 9% |
| 12 / 15 years | 10% |
iii.) ICICI Pru Assured Savings Plan Death Benefit
On death of the life assured during the policy term, for a premium paying or fully paid policy, the highest of the following will be payable:
- Sum Assured i.e., 10 times the annualised premium plus accrued Guaranteed Additions
- GMB plus accrued Guaranteed Additions
- Minimum Death Benefit i.e., 105% of the sum of premiums paid to date
5.) ICICI Pru Assured Savings Plan Grace period, Discontinuance and Revival
i.) Grace period
A grace period of 15 days will be given for payment of the due installment premium for monthly frequency. For any other than Monthly frequency, 30 days will be given as a grace period for the payment of the due installment premium beginning from the premium due date.
ii.) Discontinuance
After paying all the premiums for the entire two years without any due then your policy will attain the surrender value.
If you discontinue premium payment before your policy has acquired a surrender value, your policy will lapse and no further benefits will be paid.
After the policy has attained surrender value, even if you by any chance discontinue your premiums it becomes a paid-up policy with reduced benefits.
iii.) Revival
You can revive the canceled policy within five years starting from the first unpaid premium.
6.) ICICI Pru Assured Savings Plan Free Look Period
If you are not satisfied with the terms and conditions of the policy, please return the policy document to the Company for cancellation within 15 days from the date of receipt of the policy document, if the policy is not purchased through Distance mode.
In the case of electronic policies and policies sourced through Distance Mode, it is 30 days from the date of receipt of the policy document.
To know more about the plans’ conditions and working model we suggest you view the ICICI Pru Assured Savings Plan Policy Brochure
7.) Surrendering ICICI Pru Assured Savings Plan
Your Policy will attain the surrender value after all the premiums for the entire two have been completely paid. If the policy is surrendered after the policy has attained surrender value the policyholder is entitled to receive the following:
In Addition to Guaranteed Surrender Value (GSV), the surrender value of accrued GA Special Surrender Value (SSV) is payable.
8.) Advantages of ICICI Pru Assured Savings Plan
- Though you pay for a limited period, you get a life cover for the full policy term.
- Guaranteed additions are calculated as a percentage of cumulative premium which in general is calculated as a percentage of annualised premium.
- All the benefits under this plan are guaranteed.
- You may avail loans up to 80% of surrender value.
9.) Disadvantages of ICICI Pru Assured Savings Plan
- Premium, premium payment term, and policy term chosen at inception of policy cannot be changed.
- Though the benefits are guaranteed, returns are not satisfactory.
10.) ICICI Pru Assured Savings Plan Research Methodology
The return on investment is an important parameter when picking an investment vehicle. Here under this plan, you get a guaranteed maturity amount. But we need to calculate the returns in terms of percentage.
The Percentage of Return can be used as a common scale to compare this plan with other investment products. Now, let us calculate the Internal Rate of Return for the Benefit Illustration taken from the policy brochure.
ICICI Pru Assured Savings Plan Benefit Illustration – IRR analysis
A 30-year-old male opts for an ICICI Pru Assured savings Plan for a Sum Assured of ₹ 5 Lakhs. The policy term is 15 years and the premium paying Term is 7 years. The annualised premium is ₹ 50,000.
The maturity benefit along with Guaranteed Additions is available at the end of the policy term.
| Male | 30 years |
| Sum Assured | 5,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 7 years |
| Annualised Premium | 50,000 |
| Age | Year | Annualised premium / Maturity Benefit | Death Benefit |
| 30 | 1 | -50,000 | 5,00,000 |
| 31 | 2 | -50,000 | 5,00,000 |
| 32 | 3 | -50,000 | 5,00,000 |
| 33 | 4 | -50,000 | 5,00,000 |
| 34 | 5 | -50,000 | 5,00,000 |
| 35 | 6 | -50,000 | 5,00,000 |
| 36 | 7 | -50,000 | 5,00,000 |
| 37 | 8 | 0 | 5,00,000 |
| 38 | 9 | 0 | 5,00,000 |
| 39 | 10 | 0 | 5,00,000 |
| 40 | 11 | 0 | 5,00,000 |
| 41 | 12 | 0 | 5,00,000 |
| 42 | 13 | 0 | 5,00,000 |
| 43 | 14 | 0 | 5,00,000 |
| 44 | 15 | 0 | 5,00,000 |
| 45 | 7,25,605 | 5,00,000 | |
| IRR | 6.20% |
The maturity value is ₹ 7.25 Lakhs. The Internal Rate of Return (IRR) for this cash flow is 6.20%. Risk-averse investors may want to settle with this return as the benefits are guaranteed.
But a long-term investment fetching a debt instrument return is not favourable for an investor. Under the ICICI Pru Assured Savings Plan, your funds get locked till the end of the policy term i.e., 15 years.
There is no liquidity under the ICICI Pru Assured Savings Plan.
11.) ICICI Pru Assured Savings Plan VS Other Investment
In this segment, let us compare the return with an alternate investment option. This will help you to figure out, which option suits you better. For this comparison study, we will be taking the same figure as seen in the Benefit Illustration.
ICICI Pru Assured Savings Plan offers life cover and investment opportunities. So, with the same annual premium, we need to meet both life cover and investment. Instead of clubbing these two components, let us try to do it separately.
i.) ICICI Pru Assured Savings Plan VS Pure Term + PPF / ELSS
The Life Cover component is served by a Pure Term Life Insurance policy. For a sum assured of ₹ 5 Lakhs, a pure term life insurance policy would only cost ₹ 3,500. This is for a policy term of 15 years and a premium paying term of 5 years.
In the previous illustration, the premium paying term is considered as 7 years. So, in the initial 5 years, after the payment of the life insurance premium, the balance is utilised for investments. In the final 2 years, your premiums can be utilised completely for investment.
The investment vehicle could be based on your financial goals, risk appetite, and time horizon. Just to illustrate, here ELSS fund is chosen as you get tax benefits under 80C (Old tax regime) similar to the Life Insurance premium.
| Pure Term Life Insurance Policy | |
| Sum Assured | 5,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 5 years |
| Annualised premium | 3,500 |
| ELSS Investment | 46,500 |
| Age | Year | Term Insurance + ELSS | |
| Term Insurance Premium + ELSS | Death Benefit | ||
| 1 | -50,000 | 5,00,000 | |
| 31 | 2 | -50,000 | 5,00,000 |
| 32 | 3 | -50,000 | 5,00,000 |
| 33 | 4 | -50,000 | 5,00,000 |
| 34 | 5 | -50,000 | 5,00,000 |
| 35 | 6 | -50,000 | 5,00,000 |
| 36 | 7 | -50,000 | 5,00,000 |
| 37 | 8 | 0 | 5,00,000 |
| 38 | 9 | 0 | 5,00,000 |
| 39 | 10 | 0 | 5,00,000 |
| 40 | 11 | 0 | 5,00,000 |
| 41 | 12 | 0 | 5,00,000 |
| 42 | 13 | 0 | 5,00,000 |
| 43 | 14 | 0 | 5,00,000 |
| 44 | 15 | 0 | 5,00,000 |
| 45 | 12,32,632 | 5,00,000 | |
| IRR | 10.87% | ||
The final fund value at the end of 15 years is 13.21 Lakhs. This is the pre-tax value. After payment of capital gain tax, the post-tax fund value is 12.32 Lakhs. Refer to the tax calculation given below.
The IRR for Pure term life Insurance Policy and ELSS fund yields you 10.87%.
| ELSS Tax Calculation | |
| Maturity Value after 15 years | 13,21,536 |
| Purchase price | 3,32,500 |
| Long-Term Capital Gains | 9,89,036 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 8,89,036 |
| Tax paid on LTCG | 88,904 |
| Maturity value after tax | 12,32,632 |
You get the following advantages of investing separately for life goals,
- Returns greater than the Inflation rate
- Liquidity
This shows that Investment shouldn’t be clubbed with Insurance. This point makes ICICI Pru Assured Saving Plan an unattractive investment option.
ii) ICICI Pru Assured Saving Plan VS ICICI Pru Gift Pro Plan
To understand the ICICI Pru Gift Pro plan even better by having a quick glimpse of its important features
- Flexibility in choosing the Guaranteed Income as per your needs and convenience.
- The percentage of the Money- Back Benefit can be chosen by you.
- The option to withdraw future benefits in advance is also available.
If you wish to gain insights into the plan’s suitability, IRR Analysis, etc, you can refer to our article on: ICICI Pru Gift Pro Plan: Good or Bad? A Complete Review & Analysis
iii) ICICI Pru Assured Savings Plan VS ICICI Pru 1 Wealth Plan
Let’s look into some of the attractive features to get a basic picture of this ICICI Pru 1 Wealth Plan.
- Invest only once and access a life insurance cover throughout the policy term.
- You have 9 fund choices to invest your premium.
- Wealth Boosters are provided at the end of the policy term.
If you are looking to choose this as an investment product, we recommend you to please go through our blog post on: ICICI Pru 1 Wealth Plan: Good or Bad? An Insightful Review
12.) Final Verdict on ICICI Pru Assured Savings Plan
As the name suggests, ICICI Pru Assured Savings Plan gives you assured benefits. Getting the assured benefit should be the sole criterion for picking this plan. Because you need into the other criteria like liquidity and returns which are not a favour of a long-term investor.
ICICI Pru Assured Saving Plan is a plain vanilla endowment plan. Guaranteed returns are the only advantage under the plan. But the wait time to get the benefit is enormous.
The long waiting time doesn’t yield any favourable return for the investor. Since it is just another ULIP Policy, investors must be aware of the High Agent Commission as well. So, investing in the ICICI Pru Assured Savings plan is not advisable.
Make sure, to take adequate life insurance coverage through a Pure Term Life Insurance Policy. Take into account all your life goals and liabilities to arrive at an adequate Sum Assured.
Each one of you might have your unique Financial Vision and Goal to achieve. So it is advisable to choose investment products highly recommended on Social Media Platforms like Quora, Facebook, Twitter, etc.
A diversified investment portfolio can cater to all your life goals.
Consult a Certified Financial Planner, to draft a tailor-made financial plan to achieve your Future Goals.
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