ICICI Pru iProtect Smart is a popular Term Insurance Policy, launched on 15th December 2015. Within 4 years this policy has gained a lot of popularity. But, is it really worth buying it?

Topic Navigation:

1. ICICI Pru iProtect Smart Policy: 4 variants and their benefits
2. ICICI Pru iProtect Smart Policy: Key Features
3. ICICI Pru iProtect Smart Policy: Illustrations
4. ICICI Pru iProtect Smart Policy: Death Benefit Payout
5. ICICI Pru iProtect Smart Policy: Analysis and Review
6. Conclusion

ICICI Pru iProtect Smart Policy: 4 variants and their benefits

4 variants of this policy, under each variant there are additional benefits:
1. Life Plan: Death Benefits will be paid to the nominee or legal heir, on the first occurrence of either:

• Death of the life assured, or
• The diagnosis of a terminal illness.

The policy will terminate on payment of these benefits.

• On diagnosis of permanent disability due to an accident, the future premiums under your policy for all benefits are waived.

2. Life Plus: In addition to all the benefits under the Life Plan given above, you are also covered for Accidental Death Benefit. In case of death due to an accident, your nominee/legal heir will receive Accidental Death Benefit as a lumpsum payment. The policy will terminate on payment of these benefits.

3. Life Health: In addition to the benefits under the Life Option, you are also covered for the Critical Illness Benefit. The CI Benefit offers you coverage against 34 critical illnesses such as cancer, brain surgery, blindness; you can see the complete list of critical illnesses in this document.

• This benefit is payable, on the first occurrence of any of the covered 34 illnesses.
• The Critical Illness Benefit is accelerated and not an additional benefit which means, the policy will continue with the Death Benefit reduced by the extent of the CI Benefit paid.
• If Critical Illness Benefit paid is equal to the Death Benefit, the policy will terminate on payment of the Critical Illness Benefit.

4. All in One: In addition to the benefits under Life Option, you are covered for both Accidental Death Benefit and Critical Illness Benefit.

The table below summarizes the benefits of 4 variants. In the upcoming section, we will discuss each variant with an illustrative example.

ICICI Pru iProtect Smart Policy: Key Features

In this section, we will explore the key features of this policy as claimed by the policy and we will do the review of all its unique features in later sections.

• This policy provides coverage against death, terminal illness, and disability.
• It provides additional benefits such as accidental death cover and critical illness cover, as already mentioned in the 4 variants.
• It gives special premium rates for non-tobacco users.
• You will get the flexibility to pay your premiums as lumpsum, limited pay, or throughout the policy term.
• Tax benefits on premium paid and benefits received as per the prevailing tax laws. No Tax to be paid on claim amount under Section 10(10D)
• Special premium rates for women and also this policy covers female organ cancer such as breast cancer and cervical cancer.
• You can choose anyone among the 4 flexible payout options.
i. Lumpsum
ii. Regular monthly income
iii. Increasing monthly income
iv. Lumpsum plus regular monthly income.
• Basic Eligibility Conditions of this policy are shown below:

Now, let’s understand this policy through various illustrative examples discussed in the next section.

To get the answer of 3rd question, read the illustration and analysis of this policy in the next sections of this post and then make informed decisions by yourself.

ICICI Pru iProtect Smart: Illustrations

#1

Let us say Anil is 35-year-old working in an IT Company. Anil ensures that his family lives a comfortable life in case of his untimely death. He chooses ICICI iProtect Smart of with a Death Benefit of Rs 1.5 crores with an Income option which will ensure an adequate monthly income for his family.
Anil is paying an annual premium of Rs 14,819, let’s say he died at the age of 44. Then after Anil’s death, this policy ensures a monthly income of Rs 1,25,000 for 10 years to his family. He may also choose other payout options such as lumpsum, increasing monthly option or the combination of lump sum and regular income option, as described earlier.

#2

In this illustration, let’s take an example of Critical Illness benefits.

Priya is 32 years old working as a marketing manager. She takes ICICI Pru iProtect Smart with a base cover of Rs 1 Crore and a Critical Illness Benefit of Rs 25 lakh. She pays an annual premium of Rs 15,334.
When Priya reaches the age of 40, she is diagnosed with Critical Illness.

In this case, Rs 25 Lacs will be paid as a lump sum amount and the policy will continue with the reduced assured sum of Rs 75 Lacs out of Rs 1 crore cover. The subsequent premiums are proportionately reduced to Rs 6,932 per annum.

In the case of Priya’s unfortunate death at the age of 52, her nominee will get the lump sum death benefit od Rs 75 Lacs and the policy will terminate thereafter.

#3

In this illustration, let’s take some examples using ICICI Pru iProtect Smart Online Calculator. We will calculate the payable premium amount for all 4 variants.

Let’s say you are 30 years old and choosing a life cover of Rs 1 Crores for the duration of 30 years until you retire.

Case 1: You are choosing the first variant, that is Life Policy.

In this case, you will have to pay the premium of Rs 708 per month or Rs 8,279 per annum throughout your policy term of 30 years.
In your absence, your family will get a regular monthly income of Rs 83,333 for 10 years. This data is taken from an online calculator.

Case 2: You are choosing the second variant; Life plus, which includes accidental benefits of Rs 50 Lacs along with all the benefits under the first case. You can choose any amount above Rs 1 Lac for your accidental rider, in this example, we have taken Rs 50 Lacs.

In this case, you will have to pay the premium of Rs 948 per month or Rs 11,082 per annum throughout your policy term of 30 years.
You will receive the same regular monthly income of Rs 83,333 for 10 years as in the previous case. Plus, in case of accidental death, the nominee will receive the cover of Rs 50 Lacs.

Case 3: You choose the third variant Life and Health. That is Case 1 plus Critical Illness cover. Let’s say you are choosing the critical illness cover of Rs. 20 Lacs.

You will have to pay the premium of Rs 1,304 per month or Rs 15,261 per annum throughout your policy term of 30 years.
You will receive the critical illness cover of Rs 20 Lacs once the critical illness is detected and in case of demise, the nominee will receive the monthly income of Rs 83,333 as usual.

Case 4: You choose the all in one option, where you will get accidental rider plus critical illness cover.

Let’s say you choose the accidental rider of Rs 50 Lacs and critical illness cover of Rs 20 Lacs. You will have to pay the premium of Rs 1,544 per month or Rs 18,064 per annum throughout your policy term of 30 years.
In case of accidental death, the nominee will receive the cover amount of Rs 50 Lacs and in case of critical illness, you will receive Rs 20 Lacs as the illness cover.

Note: In case of demise Rs 83,333 will be paid per month to the nominee for the duration of 10 years under the Regular Income option, you can also choose the other payout option as discussed in the next section.

Also, you can use this online calculator and choose the amount customized with your needs before you finally buy this policy.

ICICI Pru iProtect Smart: Death Benefit Payout

After the demise of the policyholder, the nominee can get the payout in four different ways. Let’s say the Assured sum is Rs 1 crore, as considered in the above illustrations.

1. Lumpsum payout: The whole amount of Rs 1 crore will be paid as a lump sum.

2. Regular Monthly Income: As demonstrated in the above illustrations; 10% of the death benefit will be paid every year, which means the nominee will get Rs 83,333 per month for 10 years, as found through an online calculator. The total payout amount comes out to be Rs 1 crore over 10 years.

3. Increasing income: As usual 10% of the death benefit is paid in the first year. After the first year, the payout increases by 10% each year. So, the nominee gets Rs 83,333 per month in the first year, around Rs 91,667 per month throughout the second year, Rs 1 lac per month in the third year, and so on. Therefore the total payout amount will be approx. Rs 1.5 crores over a 10-year duration.

4. Lumpsum Plus Regular Monthly income: You can allocate part of the amount as Lumpsum, let’s say in Rs 1 crore policy, you choose to fix Rs 50 Lacs as a Lumpsum amount and the remaining 50 Lacs will be paid as the regular monthly income to the nominee.

ICICI Pru iProtect Smart: Analysis and Review

When you compare this policy with insurance products such as ULIPs, Endowment or any other Money back policy. In such a case, there is NO point in investing your money in ULIP or Endowment Plan; you can confidently go ahead and buy ICICI Pru iProtect Smart policy.

Which variant of ‘ICICI Pru iProtect Smart’ should you choose?

Now, if you choose ICICI Pru iProtect Smart policy, which variant should you go for?

This decision is for you to take yourself, but we will hand-hold and guide you in this decision-making.

In our discussion in the previous sections, we can notice that 4 variants in this policy exist due to 2 additional riders;

• Accidental death, and
• Critical Illness

The second variant of this policy has an accidental rider, the third variant has a critical illness rider and the fourth variant has both riders.

But, do you really need any of these additional riders?

You may need an Accidental death rider for a couple of years, especially the time which requires a lot of traveling. We recommend you to take accidental insurance from your health insurance company which is customized with your needs. You don’t actually require additional accidental insurance along with your Term Insurance, so you can skip this option.

If you remove the accidental death cover, variant numbers 2 and 4 will be ruled out. Now you are left with variant 1 and 3, that is Life and Life + Health option.

Coming to Critical Illness cover, yes, it is a nice option to have, but do you really need this cover? You can have it, only if you need it, you need to pay Rs. 596 monthly to have this option. The decision is purely yours in this case. However, we don’t recommend it.

Now, you are left with the basic Life option as given in the first variant.

The only issue with the Basic Life option is that it comes along with Terminal Illness and waiver on premiums in case of permanent disability. There is no choice to get rid of these 2 options, which are added along with death benefits and are not actually required. Adding these 2 options also adds up the additional cost.

If you are OK with this added cost in your monthly premiums, then you can go ahead and buy this plan.

You can buy ICICI Pru iProtect Smart Policy online through this link.

Or, in case if you are looking for a cheaper option then you go for a pure term insurance plan, which can give you life cover at a cheaper cost and you won’t be having any extra undesired options. You can read this article on finding a cheap and best Term Insurance plan for you.

Finally, the major benefits of ICICI Pru iProtect plan are

• the flexibility in their payout options, you can choose any one of the 4 payout options,
• optional rider benefits, if you want it you can take otherwise ignore them
• you have an option to increase your life cover at various life stages, and
• waiver of premium on permanent disability happened due to accident.

The only limitation we find in this policy is that:

It is a bit expensive term insurance policy as compared to other plain term insurance policies. Why you should be paying more premiums per month if cheaper options are available out there!

Conclusion

If you are a sole breadwinner in your family then the Term Insurance is MUST for you.

You can go ahead buy this Term Insurance policy but choose your optional riders carefully. Our recommendation is for you to take up Variant 1 of this policy.

You should never get into the trap of insurance products such as ULIP or Endowment plan, who promise to give you the life cover of a lower amount. However, you can choose the pure term insurance plan with a low premium amount as discussed in the analysis section of this article.

So, we hope you have understood ICICI Pru iProtect Smart policy more clearly through this post. If you have any more specific queries on this policy, you can go ahead and post them in the comment below.