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Everyone wants to provide the best to our loved ones. To ensure that, we need a comprehensive financial plan. Your financial plan should be precise in terms of insurance and investment. ICICI Pru Gold plan promotes that it would help to achieve all your Goals, Objectives, and Life Dreams (GOLD). Will the ICICI Pru Gold be a Good or Bad investment plan for all your goals?
This article analyses the plan in detail with its advantages(pros) and disadvantages(cons). You can find the returns of the plan in this review which will answer all your questions regarding ICICI Pru Gold.
Let’s get started!
Table Of Contents
1.) What is ICICI Pru Gold?
2.) What are the Features of ICICI Pru Gold?
3.) Who is eligible for ICICI Pru Gold? Analysis with Illustration
4.) What are the Benefits of ICICI Pru Gold? Review with illustration
5.) The Grace Period, Discontinuance and Revival of ICICI Pru Gold – Analysis
6.) What are the Advantages of ICICI Pru Gold?
7.) What are the Disadvantages of ICICI Pru Gold?
8.) Research Methodology of ICICI Pru Gold – Analysis
- Benefit Illustration – IRR (internal rate of return i.e interest rate) Analysis of ICICI Pru Gold
9.) ICICI Pru Gold vs Other Investment Option
- ICICI Pru Gold Plan Vs. Pure Term + ELSS
- ICICI Pru Gold Plan Vs. ICICI Pru Smart Life Plan
- ICICI Pru Gold Plan Vs. ICICI Pru Gift Pro Plan
10.) Final Verdict on ICICI Pru Gold – Good or Bad Investment Option?
1.) What is ICICI Pru Gold?
ICICI Pru Gold is a participating life insurance plan that focuses on savings and protection. It protects life cover along with a regular income for the whole of life. This income can be used to meet your long-term recurring financial needs through participation in bonuses.
Looking at the complete policy details in the official brochure of ICICI Pru Gold Plan will give you a better understanding of this review and also help in assessing the advantages (pros) and disadvantages(cons) of ICICI Pru Gold.
2.) What are the Features of the ICICI Pru Gold Plan?
- Protection through life cover with policy term up to 99 years of age.
- Option to start receiving income immediately or after a few years as per your needs.
- Regular income will be a combination of Guaranteed Income and income linked to bonus declaration.
- Option to accumulate/withdraw income at any time or adjust future premiums from the income thus accumulated.
- Under select variants, Guaranteed boosters after every 5 years.
3.) Who is Eligible for the ICICI Pru Gold Plan? Analysis with Illustration
| Plan Variant | Premium Payment Term (PPT) (in years) | Min/Max Policy Term (PT) (in years) | Min/Max Age at Entry (in years) | Min/Max Age at Maturity (in years) | Min/Max Annualized Premium |
| Immediate Income | 5 | 25 / 99 | 0/50 | 25/99 | ₹ 50,000 p.a. Subject to Board Approved Under-writing Policy |
| 6 | 0/55 | ||||
| 7 to 12 | 0/60 | ||||
| Immediate Income with Booster | 6 | 0/50 | |||
| 7 | 0/55 | ||||
| 8 to 12 | 0/60 | ||||
| Deferred Income | 7 | 0/50 | |||
| 8 | 0/55 | ||||
| 9 to 12 | 0/60 |
4.) What are the Benefits of the ICICI Pru Gold Plan? Review with illustration
| Regular Income | Maturity Benefit | Death Benefit | |
| Immediate Income |
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| Immediate Income with Booster |
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| Deferred Income |
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5.) The Grace period, Discontinuance and Revival of ICICI Pru Gold Plan – Analysis
i.) Grace period
In ICICI Pru Gold policy, a grace period of 15 days will be given for payment of the due installment premium for monthly frequency, and 30 days will be given for payment of the due installment premium for any other frequency commencing from the premium due date.
ii.) Discontinuance
If you stop paying ICICI Pru Gold Plan premiums in the first two years, the policy will lapse on the expiry of the grace period.
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If you stop paying premiums after you paid premiums for the first two full years, your ICICI Pru Gold policy acquires a surrender value and is said to have become “paid up”.
iii.) Revival
You can revive your ICICI Pru Gold policy benefits for their full value within five years from the due date of the first ICICI Pru Gold Plan unpaid premium by paying all due premiums together with interest.
6.) What are the Advantages of the ICICI Pru Gold Plan?
- Using the Save the Date option, you can choose to receive the Survival Benefits on anyone ‘Special Date’.
- The Savings Wallet feature gives you the flexibility to realign (accumulate) your benefits as per your changing needs.
- An additional benefit for a higher premium.
- The loan can be availed up to a maximum of 80% of the Surrender value.
7.) What are the Disadvantages of the ICICI Pru Gold Plan?
- Only a portion of survival benefit (regular income) is guaranteed.
- The Income Benefit is not adjusted to inflation.
- Income Benefit often ends up in discretionary expenses.
8.) Research Methodology of ICICI Pru Gold Plan- Analysis
To understand the ICICI Pru Gold plan better, let us work out the benefit illustration. Both regular income and Maturity Benefits are receivable under the ICICI Pru Gold plan. You pay a premium for a limited period and start receiving the benefits later based on your needs. Now let us work out the potential return of ICICI Pru Gold.
Benefit Illustration – IRR (internal rate of return i.e interest rate) Analysis of ICICI Pru Gold Plan
A 35-year-old male opts for the ICICI Pru Gold plan. The sum assured is ₹ 12 Lakhs, premium paying term is 12 years. The deferment period is 11 years. The annualised premium is ₹ 1 Lakh. Income Benefit is receivable till the age of 85 years and the Maturity Benefit is finally paid.
| Male | 35 years |
| Sum Assured | 12 Lakhs |
| Premium Paying term | 12 years |
| Policy term | 50 years |
| Annualised premium | ₹ 1 Lakh |
| Plan option | Deferred Income |
He receives income based on the bonus declared. This illustration will show two different rates of assumed future investment returns, 8% p.a. and 4% p.a. They are not guaranteed and they are not the upper or lower limits of what you might get back.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity Benefit | Death benefit | Annualised premium / Maturity Benefit | Death benefit |
| 35 | 1 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 36 | 2 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 37 | 3 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 38 | 4 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 39 | 5 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 40 | 6 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 41 | 7 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 42 | 8 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 43 | 9 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 44 | 10 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 45 | 11 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 46 | 12 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 47 | 13 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 48 | 14 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 49 | 15 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 50 | 16 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 51 | 17 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 52 | 18 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 53 | 19 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 54 | 20 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 55 | 21 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 56 | 22 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 57 | 23 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 58 | 24 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 59 | 25 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 60 | 26 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 61 | 27 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 62 | 28 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 63 | 29 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 64 | 30 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 65 | 31 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 66 | 32 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 67 | 33 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 68 | 34 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 69 | 35 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 70 | 36 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 71 | 37 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 72 | 38 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 73 | 39 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 74 | 40 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 75 | 41 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 76 | 42 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 77 | 43 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 78 | 44 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 79 | 45 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 80 | 46 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 81 | 47 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 82 | 48 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 83 | 49 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 84 | 50 | 51,750 | 12,00,000 | 1,09,430 | 12,00,000 |
| 85 | 51 | 22,17,013 | 12,00,000 | 67,34,236 | 12,00,000 |
| IRR | 3.95% | 7.32% | |||
At the 4% scenario, he receives an Income Benefit of ₹ 51,750 and a Maturity Benefit of ₹ 21.65 Lakhs. The IRR calculation for the 4% scenario results in 3.95%. This rate is less than any debt instrument rate.
At the 8% scenario, he receives an Income Benefit of ₹ 1,09,430 and a Maturity Benefit of ₹ 66.25 Lakhs. A point to be noted is a portion of Income Benefit is non-guaranteed. Only if the plan continuously declares a decent bonus rate, you can enjoy the Income Benefit. The IRR for the 8% scenario is 7.32%. This rate is somewhat closer to other debt instruments’ rates. But you are tied up with the ICICI Pru Gold Plan. You are supposed to receive only the Income Benefit. Also, you get a flat amount through the policy term. This may end up in improper channelization of Income Benefits.
9.) ICICI Pru Gold Plan Other Investment Option
The IRR calculation in the earlier section reveals that investing in ICICI Pru Gold is not worth a long-term investment. The Income Benefit affects your cash flow down the lane. So, let us look for alternate investments where we can enjoy liquidity. For comparison, let us assume the metrics of the earlier illustration. The annualised premium of ₹ 1 Lakh could be utilized better in terms of insurance cover and investment.
i.) ICICI Pru Gold Plan Vs. Pure Term + ELSS
For life cover, a pure term life insurance policy for a sum assured of ₹ 12 Lakhs would cost ₹ 19,000. The premium paying term is 10 years. In the earlier illustration, the premium paying term is 12 years. So, in the initial 10 years, the life insurance premium is first paid and the balance is invested. In the next 2 years, a full amount of ₹ 1 Lakh is available for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | 12 Lakhs |
| Premium Paying term | 10 years |
| Annualised premium | ₹ 19,000 |
| Investment | ₹ 81,000 |
The investment vehicle could be based on your risk profile. Here we have chosen the ELSS fund as an investment vehicle. In the initial years, you can accumulate the corpus in ELSS. Then, it is transferred to a 7% return instrument. Thereby, we can withdraw annually to match the income Benefit of ICICI Pru Gold. Finally, at the age of 85 years, the balance in the investment is withdrawn fully to match the Maturity Benefit.
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 35 | 1 | -1,00,000 | 12,00,000 |
| 36 | 2 | -1,00,000 | 12,00,000 |
| 37 | 3 | -1,00,000 | 12,00,000 |
| 38 | 4 | -1,00,000 | 12,00,000 |
| 39 | 5 | -1,00,000 | 12,00,000 |
| 40 | 6 | -1,00,000 | 12,00,000 |
| 41 | 7 | -1,00,000 | 12,00,000 |
| 42 | 8 | -1,00,000 | 12,00,000 |
| 43 | 9 | -1,00,000 | 12,00,000 |
| 44 | 10 | -1,00,000 | 12,00,000 |
| 45 | 11 | -1,00,000 | 12,00,000 |
| 46 | 12 | -1,00,000 | 12,00,000 |
| 47 | 13 | 1,09,430 | 12,00,000 |
| 48 | 14 | 1,09,430 | 12,00,000 |
| 49 | 15 | 1,09,430 | 12,00,000 |
| 50 | 16 | 1,09,430 | 12,00,000 |
| 51 | 17 | 1,09,430 | 12,00,000 |
| 52 | 18 | 1,09,430 | 12,00,000 |
| 53 | 19 | 1,09,430 | 12,00,000 |
| 54 | 20 | 1,09,430 | 12,00,000 |
| 55 | 21 | 1,09,430 | 12,00,000 |
| 56 | 22 | 1,09,430 | 12,00,000 |
| 57 | 23 | 1,09,430 | 12,00,000 |
| 58 | 24 | 1,09,430 | 12,00,000 |
| 59 | 25 | 1,09,430 | 12,00,000 |
| 60 | 26 | 1,09,430 | 12,00,000 |
| 61 | 27 | 1,09,430 | 12,00,000 |
| 62 | 28 | 1,09,430 | 12,00,000 |
| 63 | 29 | 1,09,430 | 12,00,000 |
| 64 | 30 | 1,09,430 | 12,00,000 |
| 65 | 31 | 1,09,430 | 12,00,000 |
| 66 | 32 | 1,09,430 | 12,00,000 |
| 67 | 33 | 1,09,430 | 12,00,000 |
| 68 | 34 | 1,09,430 | 12,00,000 |
| 69 | 35 | 1,09,430 | 12,00,000 |
| 70 | 36 | 1,09,430 | 12,00,000 |
| 71 | 37 | 1,09,430 | 12,00,000 |
| 72 | 38 | 1,09,430 | 12,00,000 |
| 73 | 39 | 1,09,430 | 12,00,000 |
| 74 | 40 | 1,09,430 | 12,00,000 |
| 75 | 41 | 1,09,430 | 12,00,000 |
| 76 | 42 | 1,09,430 | 12,00,000 |
| 77 | 43 | 1,09,430 | 12,00,000 |
| 78 | 44 | 1,09,430 | 12,00,000 |
| 79 | 45 | 1,09,430 | 12,00,000 |
| 80 | 46 | 1,09,430 | 12,00,000 |
| 81 | 47 | 1,09,430 | 12,00,000 |
| 82 | 48 | 1,09,430 | 12,00,000 |
| 83 | 49 | 1,09,430 | 12,00,000 |
| 84 | 50 | 1,09,430 | 12,00,000 |
| 85 | 51 | 75,49,345 | 12,00,000 |
| IRR | 7.44% | ||
The accumulated value at the end of 12 years under the ELSS fund is ₹ 22.34 Lakhs. This amount is subject to capital gains tax. The post-tax maturity value is ₹ 21.22 Lakhs. Tax calculation is given below.
Later, this amount (21.22 Lakhs) is transferred to a 7% return instrument. Income Benefit of ₹ 1.09 lakhs which is similar to the benefit illustration 8% scenario is assumed to be withdrawn. Investment is withdrawn fully at the end to match the Maturity Benefit.
The IRR calculation for this cash flow resulted in 7.44%. This return is marginally higher than the benefit illustration 8% scenario returns. Liquidity-wise, this alternate investment strategy has an upper hand over ICICI Pru Gold. You can utilize the accumulated corpus under ELSS investment as per your wish. This is missing in ICICI Pru Gold.
| ELSS Tax Calculation | |
| Maturity value after 12 years | 22,34,471 |
| Purchase price | 10,10,000 |
| Long-Term Capital Gains | 12,24,471 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 11,24,471 |
| Tax paid on LTCG | 1,12,447 |
| Maturity value after tax | 21,22,024 |
ii.) ICICI Pru Gold Plan Vs. ICICI Pru Smart Life Plan
ICICI Pru Smart Life is a Unit Linked, Life Individual Plan that focuses on safety and savings. The life insurance coverage provided by this plan will safeguard your family even in your untimely absence.
Read the complete review of ICICI Pru Smart Life Plan to weigh the Advantages and Disadvantages and find out whether this plan is a Good or Bad option for you.
iii.) ICICI Pru Gold Plan Vs. ICICI Pru Gift Pro Plan
A non-linked, non-participating individual savings life insurance plan is the ICICI Pru Gift Pro Plan.
This protection and savings-oriented life insurance plan will assist you in creating a safety net for your loved ones by offering assured benefits and financial security.
Read the complete review of the ICICI Pru Gift Pro Plan to assess the good and bad aspects of this plan effectively.
9.) ICICI Pru Gold Plan vs Other Investment Options – Review Conclusion
After a thorough analysis of all other Alternate Investment Plans For ICICI Pru Gold, it is very clear that the combination of Insurance plus investment doesn’t work. Pure-term Insurance for Life Cover and Investing the remaining amount in ELSS or PPF is the way forward if you want to fetch good returns.
10.) Final Verdict on ICICI Pru Gold Plan – Good or Bad Investment Option?
ICICI Pru Gold offers life insurance coverage, regular income, and Maturity Benefits. You have the option to choose the plan variant based on your requirements. Either you can enjoy regular income from the next year or after the end of the premium paying term.
Insurance agents will push you into this plan for their hefty agent commission but the truth is that the ICICI Pru Gold is a traditional policy offering mediocre returns. There are a few drawbacks to the plan. The major drawback is the standard Income Benefit till the end. Moreover, there is no liquidity in the plan. After the premium paying term, you can receive only Income Benefit which is not sufficient to meet major life goals.
If we invest separately for life goals, then we can enjoy liquidity. Prudently pick your instruments based on your life goals, risk appetite, and time horizon. Having a pure-term insurance policy is a must-action item in your financial plan. Pure term life insurance policy helps in retaining all other plans on track.
A comprehensive financial plan inclusive of insurance and investment is essential for all individuals. If you need any assistance, you can consult a finance professional and not amateur advisors on social media sites like Quora, Facebook, Twitter, etc.
Great breakdown! Could you delve deeper into the potential drawbacks of the ICICI Pru Gold Plan and suggest alternative investment options for better returns and liquidity?