ICICI Pru Lakshya Lifelong Income Plan
Is the ICICI Pru Lakshya Lifelong Income Plan the right choice to secure lifelong financial comfort?
Can the ICICI Pru Lakshya Lifelong Income Plan secure your financial future no matter what life throws at you?
Is ICICI Pru Lakshya Lifelong Income Plan the better way to achieve financial stability while building a legacy for your loved ones?
In this article, we’ll dive into the features, benefits, drawbacks, and return potential of the ICICI Pru Lakshya Lifelong Income Plan to help you decide.
What is the ICICI Pru Lakshya Lifelong Income Plan?
What are the features of the ICICI Pru Lakshya Lifelong Income Plan?
Who is eligible for the ICICI Pru Lakshya Lifelong Income Plan?
What are the benefits of the ICICI Pru Lakshya Lifelong Income Plan?
Grace period, Discontinuance and Revival of ICICI Pru Lakshya Lifelong Income Plan
Free Look Period for ICICI Pru Lakshya Lifelong Income Plan
Surrendering ICICI Pru Lakshya Lifelong Income Plan
What are the advantages of ICICI Pru Lakshya Lifelong Income Plan?
What are the disadvantages of ICICI Pru Lakshya Lifelong Income Plan?
Research Methodology of ICICI Pru Lakshya Lifelong Income Plan
Benefit Illustration – IRR Analysis of ICICI Pru Lakshya Lifelong Income Plan
ICICI Pru Lakshya Lifelong Income Plan Vs. Other Investments
ICICI Pru Lakshya Lifelong Income Plan Vs. Pure-Term + PPF/ELSS
Final Verdict on ICICI Pru Lakshya Lifelong Income Plan
ICICI Pru Lakshya Lifelong Income Plan is a Non-Linked Participating Life Insurance Plan. It is a protection and savings-oriented conventional participating life product to fulfil your financial needs.
ICICI Pru Lakshya Lifelong Income Plan is designed to provide you with policy benefits till 99 years of age.
| Premium paying option | Limited pay | ||
| Premium payment Term (PPT) | 10 years | 12 years | 15 years |
| Income Start date (policy anniversary) | 15th year | 17th year | 20th year |
| Max Age at Entry | 55 years | 53 years | 50 years |
| Policy term | 99-age at entry | ||
| Maximum Annual Premium | ₹ 30,000 | ||
| Min Age at Entry | 0 | ||
| Sum Assured on Death | Higher of (10 times Annualised Premium or PPT X Annualised Premium | ||
| Premium Payment Mode | Annual, Half-yearly, Monthly | ||
Death Benefit is Higher of
Maturity Benefit = Sum Assured on Maturity + Terminal bonus, if declared.
Sum Assured on Maturity= Annualised Premium X Premium Payment Term
On survival of the life assured till the Income Start Date (ISD) which is the fifth policy anniversary after the Premium Payment Term, the accrued Regular Additions net of encashment if any, till that date shall be payable as a lump sum.
After the Income Start Date, on every policy anniversary, till the end of the ICICI Pru Lakshya Lifelong Income Plan policy term or death whichever is earlier, the following is payable. Guaranteed Income (GI) + Cash Bonus (if declared)
A grace period of 15 days will be given for payment of the due instalment premium for monthly frequency, and 30 days will be given for payment of the due instalment premium for any other frequency, commencing from the premium due date.
If premium payment is discontinued, before the end of the PPT but after the policy has acquired a surrender value, the ICICI Pru Lakshya Lifelong Income Plan policy can continue as a paid-up policy with reduced benefits.
A paid-up policy will not be entitled to future regular additions, cash bonuses or terminal bonuses. A paid-up policy shall not be entitled to cash out the accrued regular additions.
You can revive the ICICI Pru Lakshya Lifelong Income Plan policy within five years from the due date of the first unpaid premium.
If you are not satisfied with the terms and conditions of the policy, you have the option to return the policy within 15 days from the date you receive it, 30 days in case of electronic policies or policies sourced through distance marketing.
Your ICICI Pru Lakshya Lifelong Income Plan policy will acquire a surrender value after payment of two full years’ premium. On policy surrender, you will get higher of the following:
Guaranteed Surrender Value (GSV) plus surrender value of accrued GAs
Special Surrender Value (SSV)
The ICICI Pru Lakshya Lifelong Income Plan offers the unique feature of regular income throughout one’s lifetime.
While this may appear appealing, it should not be the sole reason to choose this ICICI Pru Lakshya Lifelong Income Plan. A well-informed decision requires analysing the potential returns. Below is an illustration based on the policy brochure:
A 35-year-old male opts for the ICICI Pru Lakshya Lifelong Income Plan with a Sum Assured of ₹10 Lakhs. The policy term is 64 years, with a premium payment term of 10 years and an annual premium of ₹1,00,000.
| Male | 35 years |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 64 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
Regular income begins in the 15th year, starting with a cash bonus, and continues for the rest of his life. The benefit illustration assumes two investment return scenarios: 4% p.a. and 8% p.a. These returns are not guaranteed and merely indicative, not representing potential upper or lower limits.
| 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 | 10,00,000 | -1,00,000 | 10,00,000 |
| 36 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 37 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 38 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 39 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 40 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 41 | 7 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 42 | 8 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 43 | 9 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 44 | 10 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 45 | 11 | 0 | 10,00,000 | 0 | 10,00,000 |
| 46 | 12 | 0 | 10,00,000 | 0 | 10,00,000 |
| 47 | 13 | 0 | 10,00,000 | 0 | 10,00,000 |
| 48 | 14 | 0 | 10,00,000 | 0 | 10,00,000 |
| 49 | 15 | 0 | 10,00,000 | 0 | 10,00,000 |
| 50 | 16 | 1,50,000 | 10,00,000 | 1,50,000 | 10,00,000 |
| 51 | 17 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 52 | 18 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 53 | 19 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 54 | 20 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 55 | 21 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 56 | 22 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 57 | 23 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 58 | 24 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 59 | 25 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 60 | 26 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 61 | 27 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 62 | 28 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 63 | 29 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 64 | 30 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 65 | 31 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 66 | 32 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 67 | 33 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 68 | 34 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 69 | 35 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 70 | 36 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 71 | 37 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 72 | 38 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 73 | 39 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 74 | 40 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 75 | 41 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 76 | 42 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 77 | 43 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 78 | 44 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 79 | 45 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 80 | 46 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 81 | 47 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 82 | 48 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 83 | 49 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 84 | 50 | 47,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 85 | 10,47,610 | 11,15,610 | |||
| IRR | 3.40% | 6.20% | |||
Assuming a life expectancy of 85 years, the Internal Rate of Return (IRR) for the plan is:
Despite the promise of lifetime income, the plan delivers low returns, diminishing its appeal. Additionally, the fixed income does not account for inflation, eroding purchasing power over time.
The insurance component also falls short—life cover until age 99 is unnecessary for most, and the sum assured is inadequate to meet significant financial needs.
In conclusion, both the investment and insurance aspects of the ICICI Pru Lakshya Lifelong Income Plan fail to benefit investors effectively.
The regular income offered by the ICICI Pru Lakshya Lifelong Income Plan fails to deliver inflation-adjusted returns.
Instead, splitting your insurance and investment components can be a more effective way to generate regular income while securing adequate life cover. Here’s an illustration to demonstrate the benefits of this approach:
A pure-term life insurance policy with a sum assured of ₹10 Lakhs costs an annual premium of ₹15,600 for a 35-year term. After paying this premium, you have ₹84,400 per annum left for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 64 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 15,600 |
| Investment | ₹ 84,400 |
For the first 15 years, the investment can be directed into either equity or debt instruments. In this example, PPF is used for debt, and ELSS for equity.
After 15 years, the accumulated corpus is shifted to an instrument offering a 7% p.a. return, enabling regular withdrawals similar to the ICICI Pru Lakshya Lifelong Income Plan.
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 35 | 1 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 36 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 37 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 38 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 39 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 40 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 41 | 7 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 42 | 8 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 43 | 9 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 44 | 10 | -97,500 | 10,00,000 | -1,00,000 | 10,00,000 |
| 45 | 11 | -500 | 10,00,000 | 0 | 10,00,000 |
| 46 | 12 | -500 | 10,00,000 | 0 | 10,00,000 |
| 47 | 13 | -500 | 10,00,000 | 0 | 10,00,000 |
| 48 | 14 | -500 | 10,00,000 | 0 | 10,00,000 |
| 49 | 15 | -500 | 10,00,000 | 0 | 10,00,000 |
| 50 | 16 | 1,50,000 | 10,00,000 | 1,50,000 | 10,00,000 |
| 51 | 17 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 52 | 18 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 53 | 19 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 54 | 20 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 55 | 21 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 56 | 22 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 57 | 23 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 58 | 24 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 59 | 25 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 60 | 26 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 61 | 27 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 62 | 28 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 63 | 29 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 64 | 30 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 65 | 31 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 66 | 32 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 67 | 33 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 68 | 34 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 69 | 35 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 70 | 36 | 1,15,610 | 10,00,000 | 1,15,610 | 10,00,000 |
| 71 | 37 | 1,15,610 | 1,15,610 | ||
| 72 | 38 | 1,15,610 | 1,15,610 | ||
| 73 | 39 | 1,15,610 | 1,15,610 | ||
| 74 | 40 | 1,15,610 | 1,15,610 | ||
| 75 | 41 | 1,15,610 | 1,15,610 | ||
| 76 | 42 | 1,15,610 | 1,15,610 | ||
| 77 | 43 | 1,15,610 | 1,15,610 | ||
| 78 | 44 | 1,15,610 | 1,15,610 | ||
| 79 | 45 | 1,15,610 | 1,15,610 | ||
| 80 | 46 | 1,15,610 | 1,15,610 | ||
| 81 | 47 | 1,15,610 | 1,15,610 | ||
| 82 | 48 | 1,15,610 | 1,15,610 | ||
| 83 | 49 | 1,15,610 | 1,15,610 | ||
| 84 | 50 | 1,15,610 | 1,15,610 | ||
| 85 | 14,03,384 | 1,11,36,700 | |||
| IRR | 6.28% | 7.91% | |||
PPF (Debt Option)
Accumulated corpus after 15 years is ₹17.67 Lakhs. This corpus, earning a 7% p.a. return, provides annual withdrawals similar to the 8% scenario in the ICICI Pru Lakshya plan. At age 85, the remaining corpus is ₹14.03 Lakhs, with an IRR of 6.28%.
ELSS (Equity Option)
Post-tax accumulated corpus after 15 years is ₹26.79 Lakhs. This corpus, earning a 7% p.a. return, also provides annual withdrawals similar to the 8% scenario in the ICICI Pru Lakshya plan. At age 85, the remaining corpus is ₹1.11 Crores, with an IRR of 7.91%.
| ELSS Tax Calculation | |
| Maturity value after 15 years | 29,23,455 |
| Purchase price | 8,44,000 |
| Long-Term Capital Gains | 20,79,455 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 19,54,455 |
| Tax paid on LTCG | 2,44,307 |
| Maturity value after tax | 26,79,148 |
Key Advantages of This Alternate Approach
Higher Flexibility: Withdrawals can be adjusted based on your needs, unlike the fixed income of the ICICI Pru Lakshya plan.
Enhanced Returns: If you delay withdrawals in the early years, compounding can significantly boost your corpus and IRR.
Inflation-Adjusted Strategy: This approach offers the flexibility to increase withdrawals over time, addressing the erosion of purchasing power due to inflation.
By splitting insurance and investment, you gain better returns, flexibility, and a more robust financial plan that outperforms the ICICI Pru Lakshya Lifelong Income Plan.
The ICICI Pru Lakshya Lifelong Income Plan offers the option to pay premiums for a limited period and receive income for life. While this may appeal to those seeking regular cash flow, a closer evaluation reveals that the plan falls short in terms of returns.
Moreover, although the plan provides whole-life coverage, the sum assured is insufficient to meet comprehensive financial needs and also it has a high agent commission.
In personal finance, it is recommended to have adequate life cover that accounts for your goals and liabilities during your working years.
The plan’s limitations include poor returns, an inadequate sum assured, and a rigid cash flow structure with fixed income throughout life, which does not adapt to changing needs or inflation.
A better approach is to separate insurance and investment. Pure-term policies offer high coverage at an affordable cost, ensuring adequate protection.
For achieving life goals and generating regular income, channeling your savings into suitable investments can help accumulate the required corpus effectively.
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