ICICI Pru Guaranteed Income For Tomorrow Review [2023]: Worth Buying Or Not?

ICICI Pru’s Guaranteed Income For Tomorrow (GIFT) is a non-linked, participating life insurance plan.

It aims to help you achieve your life goals with its policy coverage and guaranteed benefits.

Keep reading this article as I delve deeper into if this life Insurance plan is worth buying or not?

But before starting the analysis, let’s start with going over the policy once.

TABLE OF CONTENTS:

1.) ICICI Pru Guaranteed Income For Tomorrow: Policy Features and Eligibility
2.) Other features of ICICI Pru Guaranteed Income For Tomorrow (GIFT)
3.) ICICI Pru Guaranteed Income For Tomorrow (GIFT): Review of Benefits

• ICICI Pru Guaranteed Income For Tomorrow Review of Death Benefits
• ICICI Pru Guaranteed Income For Tomorrow Review of Maturity Benefits
• ICICI Pru Guaranteed Income For Tomorrow Review of Survival Benefits

4.) ICICI Pru Guaranteed Income For Tomorrow: Review of IRR
5.) ICICI Pru Guaranteed Income For Tomorrow Plan: Good or Bad?
6.) ICICI Pru Guaranteed Income For Tomorrow Plan: Pros
7.) ICICI Pru Guaranteed Income For Tomorrow Plan: Cons
8.) Is there any better alternative to ICICI Pru Guaranteed Income For Tomorrow plan?
9.) Comparison of ICICI Pru Guaranteed Income For Tomorrow against Term Insurance + PPF
10.) Comparison of ICICI Pru Guaranteed Income For Tomorrow against ELSS Mutual Fund
11.) Final Results from our research review on ICICI Pru Guaranteed Income for Tomorrow

12.) How to Surrender/cancel your ICICI Pru Guaranteed Income For Tomorrow

• Surrendering during the Free-look period
• Surrendering after the free-look period

13.) ICICI Pru Guaranteed Income For Tomorrow: Final thoughts about the review

ICICI Pru Guaranteed Income For Tomorrow: Policy Features and Eligibility:

ICICI Pru Guaranteed Income For Tomorrow Insurance plan is a savings and protection-oriented plan.

It offers regular income and provides financial security to your family in your absence.

It is a traditional Life insurance policy that provides both the options of receiving your guaranteed income in the form of a lump sum or as regular income.

ICICI Pru Guaranteed Income For Tomorrow offers four options to receive the guaranteed income which are mentioned below:

• Early Income option.
• Income option.
• Lumpsum option
• One-time payment option.

The policy term and your premium paying term (PPT) differ from option to option along with the maximum eligibility age to avail of the maturity benefits in this life insurance plan.

So, let’s take a look at how this Plan works along with its payment options:

Download the ICICI Pru Guaranteed Income For Tomorrow brochure to get more information.

Other features of ICICI Pru Guaranteed Income For Tomorrow (GIFT):

• It allows the option of taking a loan against policy to help you in case of financial emergencies.
• It provides you with the option to choose a lump sum or regular income to receive the death and maturity benefits.

Now, let us go over the policy benefits to get clarity on the advantages it poses.

ICICI Pru Guaranteed Income For Tomorrow (GIFT): Review of Benefits

ICICI Pru Guaranteed Income For Tomorrow Review of Death Benefits:

If the person whose life is covered by the ICICI Pru Guaranteed Income For Tomorrow (GIFT) unfortunately passes away during the term of the policy, the insurance cover amount will be paid out as a lump sum to the person specified as the nominee in the policy. This applies to all the payment options available in this Insurance policy.

But in both the Income option and Early Income option, there is another choice which the claimant of the policy can avail:

In case of the death of the policyholder during the Income Period, the nominee will continue to receive the income. The nominee also has an option to receive the future income as a lump sum, which shall be the present value of the future income discounted at a rate of 9% p.a.

You can find out how exactly the death benefits would be distributed for each payment option below:

Lumpsum option:
For single pay, Life Insurance Benefit is highest of:

• Sum Assured on Death
• 105% of Total Premiums Paid up to the date of death
• Sum Assured on Maturity X Death Benefit factor for Lump sum plan, where, Sum Assured on Death is 10 X Annualised Premium.

For other than single pay, Life Insurance Benefit is the highest of:

• Sum Assured on Death
• 105% of Total Premiums Paid up to the date of death
• Sum Assured on Maturity X Death Benefit factor for Lump sum plan, where,
  Sum Assured on Death is 10 X Annualised Premium

Income option:
Life Insurance Benefit is the highest of:

• Sum Assured on Death
• 105% of Total Premiums Paid up to the date of death
• Annual Guaranteed Income X Death Benefit factor for Income Plan, where, Sum Assured on Death is 10 X Annualised Premium.

Early Income:
Life Insurance Benefit is the highest of:

• Sum Assured on Death
• 105% of Total Premiums Paid up to the date of death
• Annual Guaranteed Income X Death Benefit factor for Early Income Plan, where, Sum Assured on Death is 10 X Annualised Premium

Single pay income:
Life Insurance Benefit is:

• Sum Assured on Death Sum Assured on Death is 10 X Single Premium

or

• 1.25 X Single Premium as chosen by you

ICICI Pru Guaranteed Income For Tomorrow Review of Maturity Benefits:

Let’s assume Akash, a 35-year-old male is paying ₹ 1,00,000 annual premiums in ICICI Pru Guaranteed Income For Tomorrow. He wants to create an alternate source of income as he is planning to retire early.

Now, let us go over each option to see how Akash paying the same premium would receive his maturity benefits but in different options and policy years.

Lumpsum option:

Income option:

Early Income Option:

ICICI Pru Guaranteed Income For Tomorrow Review of Survival Benefits:  

ICICI Pru Guaranteed Income For Tomorrow (GIFT) also offers the survival benefits for two of its payment options as part of its Life Insurance Policy. Keep reading to see for yourself how both the option’s survival benefits differ from each other.

1.) Early Income option:

This option offers Guaranteed Early Income which is a fixed percentage of the premium Akash pays in a year and is based on the number of years for which he chooses to pay the premiums as given in the table below:

2.) Single pay Income option: 

This option only offers survival benefits instead of maturity benefits.

In that case, Akash needs to pay the premium of ₹ 1,00,000 only once and he can start receiving the guaranteed early income of ₹ 13,946 starting from the 2nd year onwards till the end of the 10th year of the policy term.

ICICI Pru Guaranteed Income For Tomorrow: Review of IRR

Now after reading through all the benefits this policy offers, to completely start reviewing how much exactly is this policy is worth to invest your money, you need to be aware of its Internal Rate of Return (IRR)

Let’s go over the Internal Rate of Return of each payment option of ICICI Pru Guaranteed Income For Tomorrow policy offers:

Lumpsum option:

Income option:

Early Income option:

Single Pay Option:

As we have seen above, the IRR fluctuates somewhere between 3% to 5% as in most money-back Insurance policies.

It does seem like a better amount of IRR for the money you have invested.

But while looking through the long-term perspective, two question arises;

Will this be enough to beat inflation in the long run? And are the benefits offered in this policy sufficient?

These questions make you wonder if there are any other better choices that you can make instead of investing in the ICICI Pru Guaranteed Income For Tomorrow (GIFT) Life Insurance Policy.

So, let’s see if there are indeed other better alternatives.

ICICI Pru Guaranteed Income For Tomorrow Plan: Good or Bad?

To determine if this is a good investment or not?

We can perform our evaluation through a two-stage analysis.

In the first stage, let’s go over the pros and cons of this policy to understand if the pros outweigh the cons to get clarity in determining whether this is a good or bad plan.

In the second stage, we will compare this policy with two other Investment options. The second stage will truly be able to help us get to the heart of this analysis by analyzing if there are better options that will prove whether this plan is good or bad?

ICICI Pru Guaranteed Income For Tomorrow Plan: Pros

• There are various payment options available to choose from. Depending on the individual’s comfort regarding the premium paying term & guaranteed income period, it can be chosen.
• Any time during the Income Period, you shall have an option to receive the Future Guaranteed Income as a lump sum, which shall be the present value of the future income discounted at a rate of 9% p.a.
• You also have the option to customize the date you receive your Guaranteed Income for special occasions like your birthday or your wedding anniversary.
• In case of death of the Life Assured during the Income Period, the Claimant (nominee) will continue to receive the income. The Claimant shall have an option to receive the future income as a lump sum, which shall be the present value of the future income discounted at a rate of 9% p.a.

• You also get the option to choose if you want to receive the Guaranteed income on a yearly or monthly basis.
• If you are not able to continue the policy after having completely paid premiums for 2 years, you have the option to surrender the policy.
• You can take a policy loan after your policy acquires a surrender value. 80% of the surrender value can be availed as the loan amount.
• Tax benefits may be applicable on premiums paid and benefits received as per the prevailing tax laws.

ICICI Pru Guaranteed Income For Tomorrow Plan: Cons

• You can’t avail any of the policy benefits if you stopped paying the premiums in the first two years.

• Your Premium, premium payment term, and policy term was chosen at the inception of the policy and cannot be changed.
• The guaranteed income will not be sufficient to meet any expenses or financial goals you may have as prices are increasing due to inflation.
• Neither does it seems like an adequate insurance life cover nor does it offer inflation-beating returns in the long run.

The pros and cons offer only one perspective of seeing through this policy. 

Do you know what would be a better way to determine if this policy is good or bad?

It is through comparing other investment options, we can finally conclude whether this plan is as good as it sounds or as bad as we didn’t anticipate.

Let us move on to the second stage of our comparative analysis.

Is there any better alternative to ICICI Pru Guaranteed Income For Tomorrow plan?

Indeed, there are better alternatives to choose from.

For example, a term life insurance policy can provide you with this same or even greater risk life coverage for lesser charges.

From a realistic perspective, term insurance should be considered a suitable life insurance coverage.

Let me explain why!

You can avail yourself of a huge value life cover than the one currently reviewed in this article for a much lower premium.

You can invest in other options like PPF with this same amount and still be able to afford premiums of a high-value life cover with term insurance.

Keeping your investments and insurance separately will be more beneficial in your investment journey.

Let us compare ICICI Pru Guaranteed Income For Tomorrow against PPF to see if it is a better alternative?

Comparison of ICICI Pru Guaranteed Income For Tomorrow against Term Insurance + PPF:

Public Provident Fund (PPF) scheme is a long-term investment option provided by the Govt. of India.

As ICICI Pru Guaranteed Income For Tomorrow assures guaranteed returns, it would be best to compare it against PPF which also offers Guaranteed returns.

Let’s calculate the returns from Term insurance + PPF by investing the same amount for the same period as we did in the ICICI’s GIFT illustration above.  

Let us dig deep into evaluating how you can retain a better long-term investment through the combination of Term Insurance + PPF 

Let’s just say that Akash invests the ₹ 1,00,000 corpus he’s planning to invest in ICICI Pru Guaranteed Income For Tomorrow in Term Insurance and PPF divided accordingly.

For example, let’s assume he takes up term insurance which provides a high-value life cover of ₹ 50,00,000 with an affordable premium of ₹ 7,500 annually for the next 15 years. 

Now, he invests the balance amount of ₹ 92,500 in a PPF for the same next 15 years.

If he, unfortunately, passes away, his family will have the financial security of ₹ 50,00,000 to sustain themselves while ICICI’s Pru Guaranteed Income For Tomorrow life cover will only provide ₹ 10,00,000 to his family compared to the high-value cover of term insurance.

Now analyzing the guaranteed income benefits compared to his PPF investments, it’s clear that PPF will yield a higher IRR considering it gives out a return of 7.02% while ICICI’S Pru Guaranteed Income For Tomorrow only offers an average of 3% to 5% returns as you can reference this information in the above table.

Utilizing this method, it’s clear how ICICI’s Pru Guaranteed Income For Tomorrow only provides a maturity amount of ₹ 22,83,381 after 20 years while this combination of Term Insurance + PPF provides a final maturity value that’s worth a corpus of ₹ 35,35,095 at the end of the same 20 years.

Also, it should be mentioned that PPF investments, Interest earned and maturity amounts are all tax-free.

If you are a conservative investor who’s looking for guaranteed returns, this type of combination investment would be a good option for you. But if you are looking for a long-term investment where you are willing to take some investment risks, there is an even better alternative you can take upon.

Comparison of ICICI Pru Guaranteed Income For Tomorrow against ELSS Mutual Fund:

ELSS mutual funds are equity-linked mutual funds that predominantly invest in stocks.

Since this is a stock market-related investment, it comes with its own set of risks. 

But as both the return and investment are linked, ELSS mutual funds provide a higher rate of return on your investments.

If the investor’s risk tolerance is high, he can definitely attempt investing in ELSS mutual funds keeping in mind his long-term financial goals rather than the ICICI Pru Guaranteed Income For Tomorrow.

Let us just assume that Akash invests the same amount as seen in the ICICI Pru Guaranteed Income For Tomorrow plan illustration in an ELSS fund. A part of the investment capital—₹15000—is deducted to provide the life cover with a term life insurance plan. 

Let us assume a conservative 12% CAGR and calculate the returns from the ELSS mutual fund scheme which are shown in the table below.

Even after assuming a conservative return rate, the ELSS mutual fund has yielded far higher returns, despite the sizable investment risks involved.

From the above table, we can see that ICICI Pru Guaranteed Income For Tomorrow’s final maturity value is ₹ 22,83,381 while ELSS mutual fund’s final maturity value stands at ₹ 60,77,212

In comparison with the ELSS mutual fund, there is definitely a huge difference in the final maturity value. The approximate difference in value is ₹ 37,93,831

It is almost 6 times higher than the ICICI Pru Guaranteed Income For Tomorrow life insurance plan’s returns.

So, this combination of term insurance + ELSS mutual fund would be a good choice for a risk-tolerant investor.

But as ELSS mutual funds returns are not tax-free compared to ICICI Pru Guaranteed Income For Tomorrow, let us analyze the post-tax return rate of ELSS mutual funds.

The ELSS Mutual Fund scheme’s post-tax return rate is shown in the table below. 

The post-tax returns are still higher than the returns offered in the ICICI Pru Guaranteed Income For Tomorrow Life Insurance plan despite the 10% LTCG tax.

Final Results from our research review on ICICI Pru Guaranteed Income for Tomorrow:

ICICI Pru Guaranteed Income For Tomorrow may seem appealing to many investors because of its guaranteed returns,

But after analyzing this policy with other better alternatives for both conservative and risk-tolerant investors, it’s evident we needn’t invest in this plan.

The other alternatives offer you both an insurance and an investment option which keeps your insurance and investment separately making it a better choice.

By choosing this plan and combining your investment and insurance in one policy, you are at the risk of loss with inadequate life coverage and returns that will not even beat inflation in the long run.

If you feel the returns from ICICI Pru Guaranteed Income For Tomorrow which ranges from 3% to 5% according to its payment options are sufficient for you, then you can still opt for this plan after a careful thought given over the discussed points.

If you have purchased this policy and thinking about course-correcting your investments,

Then your way out would be to start with surrendering your ICICI Pru Guaranteed Income For Tomorrow plan.

How to Surrender/cancel your ICICI Pru Guaranteed Income For Tomorrow:

If the policyholder is not satisfied with the policy, they have the option to surrender their policy as ICICI allows the policyholders to surrender it during the free-look period with zero to minimal charges.

Surrendering during the Free-look period:

The Free-look period refers to the first 15 days from the date the policy is purchased.

If you are not satisfied with the policy’s “Terms and conditions”, you can return the policy to the company along with the policy document within 15 days from the date of receipt of the policy bond.

But if you bought the policy through distance marketing, you have 30 days of the free-look period to surrender the policy.

The company will terminate your policy and refund the premium deposited on the receipt as same.

Your premium would be deducted upon deposit based on some minimal charges like;

• Stamp duty under the policy,
• Expenses that are borne by the Company on medical examination if any
• The proportionate risk premium for the period of cover

Surrendering after the free-look period:

What if your policy is way past the free-look period?

In that case, you still have the option to surrender the policy on the below conditions:

• If the policyholder had chosen the single pay option as your premium payment option, they can surrender their policy at any time during the policy term.
• If the policyholder had chosen other premium payment options, they can still surrender their policy at any time during the policy term if they have completed paying two full years of premium.

But the policyholder can avail of the surrender value benefit only under this situation:

The Guaranteed Surrender Value (GSV) payable during the policy term is equal to the total premiums paid multiplied by the Guaranteed Surrender Value factor.

The Special Surrender Value (SSV) is for policies surrendering before premium payment of five full policy years. It will be calculated as the Guaranteed Surrender Value Factor multiplied by total premiums paid which are multiplied by the Guaranteed Cash Value factor for Vested Bonuses.

So, before surrendering/canceling your policy, it is best to consult with your Financial Advisor to make the right decision.

ICICI Pru Guaranteed Income For Tomorrow: Final thoughts about the review:

The ICICI Pru Guaranteed Income For Tomorrow (GIFT) seems like an advantageous life insurance plan with various benefits displayed to us.

But as we have seen through ourselves by digging deep into reviewing this insurance product, we know now that it is not the best life insurance plan out there.

There are lots of other better alternatives where you can claim your life insurance with a high-value life cover and also invest in different streams according to your risk appetite. 

So, at the end of this comprehensive analysis of ICICI Pru Guaranteed Income For Tomorrow, it’s clear how important it is to fully comprehend the financial product before investing.

To assist you in making well-informed financial decisions, you can always seek the help of a Professional Financial Advisor in making the RIGHT financial decisions.
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