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Will ICICI Pru 1 Wealth Plan help you achieve all your personal and financial milestones in life?
Will ICICI Pru 1 Wealth provide protection for your life and maximum value for your investment?
You may have multiple goals ranging from your dream home, children’s education, retirement corpus, and buying even a luxury car.
To achieve these goals, you need an investment plan and an insurance policy that acts as a safety net in case of an unfortunate event. Your investment plan should create wealth in the long run. It is always better to do in-depth research before choosing your investment product.
In this article, we will be discussing in-depth the details such as Advantages (Pros) and Disadvantages (Cons), along with analyzing the potential return of the plan. This Review Analysis helps you in decision-making.
Table of Contents
1.) What is the ICICI Pru 1 Wealth Plan?
2.) What are the Features of ICICI Pru 1 Wealth Plan?
3.) Who is Eligible to invest in ICICI Pru 1 Wealth Plan?
4.) What are the Benefits of ICICI Pru 1 Wealth Pan?
5.) Fund Options and Investment Strategies in ICICI Pru 1 Wealth Plan
6.) Various Charges under ICICI Pru 1 Wealth Plan
7.) ICICI Pru 1 Wealth Plan Free Look Period
8.) Surrendering ICICIC Pru 1 Wealth Plan
9.) Advantages of ICICI Pru 1 Wealth Plan
10.)Disadvantages of ICICI Pru 1 Wealth
11.)ICICI Pru 1 Wealth Plan Research Methodology
- ICICI Pru 1 Wealth Benefit Plan Illustration – IRR analysis
12.) ICICI Pru 1 Wealth Plan VS Other Investment
- ICICI Pru 1 Wealth Plan VS Pure Term + ELSS
- ICICI Pru 1 Wealth VS ICICI Pru Smart Kid Solution – Children Education Plan.
- ICICI Pru 1 Wealth VS ICICI Pru Guaranteed Wealth Protector
13.) Final Verdict on ICICI Pru 1 Wealth Plan
1.) What is the ICICI Pru 1 Wealth Plan?
ICICI Pru1 Wealth is a protection-oriented life insurance plan with a single premium payment option.
It allocates your premium amount in the funds of your choice while providing you a life insurance coverage. So, you can just pay a premium once and enjoy the benefits for the long term.
2.) What are the Features of ICICI Pru 1 Wealth Plan?
- Invest only once and enjoy a life insurance cover for the entire policy term.
- Option to invest your premium in a wide range of 9 funds.
- Get Wealth Boosters as a percentage of your single premium at the end of the policy term.
- Death Benefit is covered under Married Woman Property Act (the court can’t attach the benefits)
3.) Who is Eligible to invest in the ICIC Pru 1 Wealth Plan?
| Policy Term | 5 and10 years | |
| Minimum and Maximum Single Premium | ₹ 50,000 and no limit | |
| Minimum | Maximum | |
| Age at entry | 8 years | 60 years |
| Age at Maturity | 18 years | 70 years |
| Sum assured | ||
| Less than or equal to 50 years of age | 1.25 times Single premium | 10 times Single premium |
| Greater than 50 years of age | 1.25 times Single premium | 1.25 times Single premium |
4.) Benefits of ICICI Pru 1 Wealth
i.) ICICI Pru 1 Wealth Plan: Death Benefit Review
Death Benefit will be the higher of,
- Sum Assured including Top-up Sum Assured, if any or
- Fund Value including Top-up Fund Value, if any
- The minimum Death Benefit will be 105% of the single premium and top-up premiums, if any received up to the date of death.
ii.) ICICI Pru 1 Wealth Plan: Maturity Benefit Review
When the policy matures, you will receive the Fund Value which includes Wealth Booster and Top-up Fund Value, if any.
iii.) ICICI Pru 1 Wealth Plan: Booster
At the end of the policy term, extra units will be allotted by the company.
Wealth Booster will be 2.50% of a single premium for a 5-year policy term and 2.75% of a single premium including top-up premiums less partial withdrawals if any for a 10-year policy term.
5.) Fund Options and Investment Strategies in ICICI Pru 1 Wealth Plan
You can invest your money in any of the following nine fund options in the proportions of your choice. You can switch your investment corpus amongst these funds using the switch option.
| Fund Name | Asset Allocation | Risk Profile | ||
| Equity and Equity Related Securities | Debt | Money Market and Cash | ||
| Value Enhancer Fund | 85-100% | 0-15% | 0-15% | High |
| Multi Cap Growth Fund | 80-100% | 0-20% | 0-20% | High |
| Maximiser V | 75-100% | 0-25% | 0-25% | High |
| Multi Cap Balanced Fund | 0-60% | 20-70% | 0-50% | Moderate |
| Secure Opportunities Fund | 0% | 60-100% | 0-40% | Low |
| Income Fund | 0% | 40-100% | 0-60% | Low |
| Money Market Fund | 0% | 0-50% | 50-100% | Low |
| Balanced Advantage Fund | 65-90% | 10-35% | 0-35% | High |
| Sustainable Equity Fund | 85-100% | 0-15% | 0-15% | High |
The risk profile of each fund varies based on the underlying asset. You can choose one or more funds based on your risk profile.
Automatic Transfer Strategy (ATS)
It gives you the benefit of rupee cost averaging. The option to invest all or some portion of your investment in an Income Fund or Money Market Fund and transfer a fixed corpus to regular monthly installments by utilizing any one of the following funds:
Value Enhancer Fund, Balanced Advantage Fund or Sustainable Equity Fund, Maximiser, Multi Cap Growth Fund. There would be no separate charges for ATS.
6.) Various charges under ICICI Pru 1 Wealth Plan:
i)Premium Allocation Charge: NIL
ii)Policy administration charges: NIL
iii)Fund Management Charges
| Fund Name | Fund Management charges (P.a.) |
| Value Enhancer Fund | 1.35% |
| Multi Cap Growth Fund | 1.35% |
| Maximiser V | 1.35% |
| Multi Cap Balanced Fund | 1.35% |
| Secure Opportunities Fund | 1.35% |
| Income Fund | 1.35% |
| Money Market Fund | 0.75% |
| Balanced Advantage Fund | 1.35% |
| Sustainable Equity Fund | 1.35% |
iv.) Mortality Charges
Based on Sum at Risk Mortality Charges will be deducted by reducing the number of units.
| Age (years) | 30 | 40 | 50 | 60 |
| Male | 0.68 | 1 | 1.98 | 4.04 |
| Female | 0.66 | 0.8 | 1.6 | 3.49 |
v.) Discontinuance Charges
It will be based on the policy year and the premium amount. There are no discontinuous charges from the 5th policy year.
Inference from these charges – Although there are no premium allocation and policy administration charges, there are other charges similar to any other ULIP.
You need to pay if you want to discontinue and exit the plan. Other market-linked products are so transparent with their charges.
These charges will pull down your overall investment value. This makes ICICI Pru 1 Wealth an unattractive investment option.
7.) ICICI Pru 1 Wealth Plan Free Look Period
If you are not satisfied with the terms and conditions of this policy, you can return the policy document within 15 days from the date it is received.
If the policy is purchased through solicitation in person or 30 days from the date it is received, in the case of electronic policies.
To understand the Terms and Conditions of the policy better you can refer to ICICI Pru 1 Wealth Policy Brochure.
8.) Surrendering ICICIC Pru 1 Wealth Plan
Surrendering During the first five policy years: the Fund Value including Top-up Fund Value, if any, after deduction of applicable Discontinuance Charge shall be transferred to the Discontinued Policy Fund (DP Fund).
In this scenario, you, or your nominee, will be eligible to obtain the Discontinued Policy Fund Value. It can based on death or the expiry of the lock-in period. (lock-in period – 5 years) whichever is earlier.
Surrendering after the first five policy years: you will be eligible to receive the Fund Value including Top-up Fund Value, if any.
9.) Advantages of ICICI Pru 1 Wealth Plan
- Option to receive the Maturity Benefit as a lump sum or as a structured payout using Settlement Option.
- Unlimited Partial withdrawals are allowed for a Policy Term of 10 years after the completion of the first five policy years.
- Unlimited free switches between funds are allowed.
- You can invest any surplus money as a Top-up premium.
- If your policy term is 5 years, you can choose to increase your policy term to 10 years.
10.) Disadvantages of ICICI Pru 1 Wealth Plan
- The lock-in period is 5 years.
- A loan facility is not available.
11.) ICICI Pru 1 Wealth Plan: Research Methodology
In this section, we will try to estimate the potential return of the ICICI Pru 1 Wealth plan. This returns calculation helps you to figure out the efficiency of the plan.
This return can be compared to other investment products. Now let us take a quote from the ICICI portal and estimate the potential return of ICICI Pru 1 Wealth.
ICICI Pru 1 Wealth Plan: Benefit Illustration – IRR analysis
A 30-year-old male opts for ICICI Pru 1 Wealth for a sum assured of ₹ 1 Crore. His single premium amounts to ₹ 10 Lakhs. The policy term is 10 years.
| Male | 30 years |
| Sum Assured | 1 Crore |
| Single premium | 10 Lakh |
| Policy term | 10 years |
These assumed returns (8% p.a. or 4% p.a.) shown in the benefit illustration are not guaranteed and they are not the upper or lower limits of what you might get back.
| Age | Year | At 4% p.a. | At 8% p.a. | ||
| Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit | ||
| 30 | 1 | -10,00,000 | 1,00,00,000 | -10,00,000 | 1,00,00,000 |
| 31 | 2 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 32 | 3 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 33 | 4 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 34 | 5 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 35 | 6 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 36 | 7 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 37 | 8 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 38 | 9 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 39 | 10 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 40 | 12,02,000 | 1,00,00,000 | 17,65,000 | 1,00,00,000 | |
| IRR | 1.86% | 5.85% | |||
The fund value after 10 years under the 4% scenario is ₹ 12.02 Lakhs and the IRR for the 4% scenario is working out to 1.86%.
The fund value after 10 years under the 8% scenario is ₹ 17.65 Lakhs and the IRR for the 8% scenario is working out to 5.85%. One more important point to be noted here.
If a ULIP has been issued on or after 1st February 2021 with premiums more than ₹ 2.5 lakhs in any given year during the tenure of the policy, then the Maturity Benefits under ULIPS are Taxable.
If we consider tax, then the returns would be even lower than the above calculation.
The IRR under these scenarios is not compensating adequately for the risk undertaken. The returns are lower than even a debt instrument return. This leads you to fall short of the required corpus when your goal is nearing.
12.) ICICI Pru 1 Wealth Plan VS Other Investments
Now, let us estimate the returns if we invest the same lumpsum amount in an alternate investment option. This will help you choose an investment product based on your investment objective and financial goals.
ICICI Pru 1 Wealth offers life cover and the opportunity to invest in the market. So, we need to look for an insurance policy and also a market-linked product for wealth accumulation
i) ICICI Pru 1 Wealth Plan VS Pure Term + ELSS
Out of ₹ 10 Lakhs, let’s set aside the insurance premium for life cover. Let us look for a pure-term policy for the same figures as in the above illustration.
A pure term life insurance policy for a sum assured of ₹ 1 crore would cost ₹ 94,000 (single premium). So, the balance amount of ₹ 9.06 Lakhs can be invested as per your choice. Here, we have chosen the ELSS fund.
| Pure-Term Life Insurance Policy | |
| Sum Assured | 1 Crore |
| Single premium | ₹ 94,000 |
| Policy term | 10 years |
| ELSS investment | ₹ 9,06,000 |
After 10 years, while redeeming units from the ELSS fund, capital gains tax is payable. So, we need to set aside the tax payable from the proceeds. Tax calculation is given below.
| Term Insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 30 | 1 | -10,00,000 | 1,00,00,000 |
| 31 | 2 | 0 | 1,00,00,000 |
| 32 | 3 | 0 | 1,00,00,000 |
| 33 | 4 | 0 | 1,00,00,000 |
| 34 | 5 | 0 | 1,00,00,000 |
| 35 | 6 | 0 | 1,00,00,000 |
| 36 | 7 | 0 | 1,00,00,000 |
| 37 | 8 | 0 | 1,00,00,000 |
| 38 | 9 | 0 | 1,00,00,000 |
| 39 | 10 | 0 | 1,00,00,000 |
| 40 | 26,33,109 | 1,00,00,000 | |
| IRR | 10.17% | ||
The Pre-tax Maturity value under the ELSS fund is ₹ 28.13Lakhs. The Post-Tax value is ₹ 26.33 Lakhs. The IRR for pure term life insurance along with ELSS investment yields you 10.17% (post-tax return).
When you compare the returns with ICICI Pru 1 Wealth, you get a better yield and also the liquidity is better (3 years lock-in).
| Maturity value after 10 years | 28,13,898 |
| Purchase price | 9,06,000 |
| Long -Term Capital Gains | 19,07,898 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 18,07,898 |
| Tax paid on LTCG | 1,80,790 |
| Maturity value after tax | 26,33,109 |
In the long run, this Alternate Investment helps to amass wealth, as the rate of return is higher than the inflation rate. ICICI Pru 1 wealth fails to provide you with inflation-adjusted returns which is essential to meet up with your Financial Goals.
ii) ICICI Pru 1 Wealth VS ICICI Pru Smart Kid Solution – Children Education Plan.
To understand the plan better let’s look at some of its key attributes
- Choose the extent of safety that fits your needs.
- There are two portfolio strategies and 14 Fund options.
- Get rewarded with Loyalty Additions and Wealth Boosters for long-term policies.
If you wish to have a detailed look at this plan. You can refer to our article on: ICICI Pru Smart Kid Solution – Children Education Plan – Review: Should You Buy?
iii) ICICI Pru 1 Wealth VS ICICI Pru Guaranteed Wealth Protector
In order to get the gist of the plan and policy nature, let’s analyse its key features
- You can choose from 3 policy options.
- Investors can pay the premium in lump sum or installments
To help you know more about the plan specialty. you can visit the link given below: An Unbiased Review: ICICI Pru Guaranteed Wealth Protector – Should You Buy?
13.) Final Verdict on ICICI Pru 1 Wealth Plan
‘All you need is invest your lumpsum and allow it grow’, is the most selling point feature of ICICI Pru 1 wealth. The plan offers you life cover and market-linked investment opportunities as well. This persuades investors to buy this plan.
This is a Unit Linked Insurance Policy where various charges are levied during the policy term. Over a period of time, these charges along with High- Agent Commission will eventually lower your returns. So, even though being a market-linked product it yields a lower return.
If you need to amass wealth in the long run for your life goals, then you must invest in a diversified portfolio. Be prudent in choosing the right investment product based on your goal. This is essential because the time horizon is an important factor when choosing a market-linked investment product.
Life Insurance plays a major role in designing your financial plan. Pure- Term Life Insurance is a must-do action item in your financial planning. Because of its affordability and high coverage, Pure-Term Life Insurance is the best choice.
A comprehensive financial plan will help you achieve your financial goal. To create a Comprehensive Financial Plan just referring to Social Media Platforms such as Facebook, Quora, Twitter, etc. isn’t enough.
For comprehensive financial planning, you need to consult a Certified Financial Planner (CFP). He will draft a tailor-made financial plan.
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