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Could investing in the ICICI Pru Lakshya Wealth Plan be the key to achieving your ever-changing aspirations?
Is the ICICI Pru Lakshya Wealth Plan your pathway to fulfilling financial dreams while ensuring comprehensive protection?
Can the ICICI Pru Lakshya Wealth Plan offer the perfect blend of wealth creation and life protection for your future?
Table of Contents:
What is the ICICI Pru Lakshya Wealth?
What are the features of the ICICI Pru Lakshya Wealth?
Who is eligible for the ICICI Pru Lakshya Wealth?
What are the benefits of the ICICI Pru Lakshya Wealth?
Grace period, Discontinuance & Revival of ICICI Pru Lakshya Wealth
Free Look Period of ICICI Pru Lakshya Wealth
Surrendering ICICI Pru Lakshya Wealth
What are the advantages of ICICI Pru Lakshya Wealth?
What are the disadvantages of ICICI Pru Lakshya Wealth?
Research Methodology of ICICI Pru Lakshya Wealth
Benefit Illustration – IRR Analysis of ICICI Pru Lakshya Wealth
ICICI Pru Lakshya Wealth Vs. Other Investments
ICICI Pru Lakshya Wealth Vs. Pure-term + PPF/ELSS
Final Verdict on ICICI Pru Lakshya Wealth
What is the ICICI Pru Lakshya Wealth?
ICICI Pru Lakshya Wealth is a Non-Linked Participating Life Insurance Plan. ICICI Pru Lakshya Wealth Plan is a protection and savings-oriented conventional participating life product to fulfil your financial needs.
ICICI Pru Lakshya Wealth Plan provides guaranteed benefits in the form of sum assured on maturity, guaranteed value benefits, and bonuses.
What are the features of the ICICI Pru Lakshya Wealth?
- Get Life Cover throughout the ICICI Pru Lakshya Wealth Plan policy term to secure your family’s future
- Get Guaranteed Capital protection in the form of Sum Assured on Maturity
- Enjoy bonuses in the form of Regular Additions every year to grow your wealth and Terminal bonus at maturity.
- Receive a lump sum amount on maturity to fulfil your dreams
- Tax Benefits on premiums paid and benefits received as per prevailing tax laws
Who is eligible for the ICICI Pru Lakshya Wealth?
| Premium payment option | Limited pay | |||
| Premium Payment Term (PPT) | 5 years | 7 years | 10 years | 12 years |
| Policy Term (PT) | 12,15,20,25 & 30 years | 15,20,25 & 30 years | ||
| Minimum Annual Premium | PPT/PT | 12 years | 15 years | 20,25,30 years |
| 5 years | ₹ 50,000 | ₹ 40,000 | ||
| 7 years | ₹ 30,000 | |||
| 10/12 years | NA | ₹ 24,000 | ₹ 12,000 | |
| Min / Max Age at Entry | PPT/PT | 12 years | 15 years | 20,25,30 years |
| 5 years | 6/45 years | 3/50 years | 0/ (70-Policy term) | |
| 7 years | 6/50 years | 3/55 years | ||
| 10 years | NA | 3/55 years | ||
| 12 years | 3/50 years | |||
| Min / Max Age at Maturity | 18/70 years | |||
| Sum Assured on death | Higher of (10 times Annualised premium or PPT * Annualised premium) | |||
| Premium payment frequency | Annual, half-yearly, Monthly | |||
What are the benefits of the ICICI Pru Lakshya Wealth?
Death Benefit
On Death of the life assured during the ICICI Pru Lakshya Wealth Plan policy term: Higher of
- Sum Assured on Death + Accrued Regular Additions net of encashment (if any) + Interim Regular Addition (if any) + Terminal Bonus (if any) or
- 105% of Total Premiums paid as on the date of death will be payable
Where, Sum Assured on Death = Higher of 10 X Annualised Premium or PPT X Annualised Premium
Maturity benefit
The Maturity Benefit comprises
- Sum Assured on Maturity +
- Applicable Guaranteed Value Benefits +
- Accrued Regular Additions net of encashment, if any +
- Terminal bonus, if declared
Where Sum Assured on Maturity = Annualised Premium X Premium Payment Term
Grace period, Discontinuance & Revival of ICICI Pru Lakshya Wealth
Grace period
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.
Discontinuance
If premium payment is discontinued, before the end of the PPT but after the policy has acquired a surrender value, the ICICI Pru Lakshya Wealth 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 bonus. A paid-up policy shall not be entitled to cash out the accrued regular additions.
Revival
You can revive the ICICI Pru Lakshya Wealth Plan policy within five years from the due date of the first unpaid premium.
Free Look Period of ICICI Pru Lakshya Wealth
If you are not satisfied with the terms and conditions of the ICICI Pru Lakshya Wealth Plan 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.
Surrendering ICICI Pru Lakshya Wealth
Your ICICI Pru Lakshya Wealth 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) which includes the guaranteed surrender value of accrued Bonuses declared in the form of Regular Additions, net of encashment, if any
Special Surrender Value (SSV)
What are the advantages of ICICI Pru Lakshya Wealth?
What are the disadvantages of ICICI Pru Lakshya Wealth?
Research Methodology of ICICI Pru Lakshya Wealth
Making investment decisions based on thorough research is always the smartest approach. Understanding the features and workings of a plan is crucial, and analysing its potential returns is equally important.
Let’s evaluate the returns of the ICICI Pru Lakshya Wealth Plan using an example.
Benefit Illustration – IRR Analysis of ICICI Pru Lakshya Wealth
A 30-year-old male opts for the ICICI Pru Lakshya Wealth Plan with a Sum Assured of ₹10 Lakhs, a policy term of 20 years, and a premium payment term of 10 years. The annual premium is ₹1,00,000, and the maturity benefit is provided at the end of the ICICI Pru Lakshya Wealth Plan policy term.
| Male | 30 years |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
The illustration assumes two possible future investment returns—4% p.a. and 8% p.a., both of which are non-guaranteed and serve only as indicative figures, not limits.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 30 | 1 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 31 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 32 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 33 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 34 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 35 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 36 | 7 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 37 | 8 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 38 | 9 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 39 | 10 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 40 | 11 | 0 | 10,00,000 | 0 | 10,00,000 |
| 41 | 12 | 0 | 10,00,000 | 0 | 10,00,000 |
| 42 | 13 | 0 | 10,00,000 | 0 | 10,00,000 |
| 43 | 14 | 0 | 10,00,000 | 0 | 10,00,000 |
| 44 | 15 | 0 | 10,00,000 | 0 | 10,00,000 |
| 45 | 16 | 0 | 10,00,000 | 0 | 10,00,000 |
| 46 | 17 | 0 | 10,00,000 | 0 | 10,00,000 |
| 47 | 18 | 0 | 10,00,000 | 0 | 10,00,000 |
| 48 | 19 | 0 | 10,00,000 | 0 | 10,00,000 |
| 49 | 20 | 0 | 10,00,000 | 0 | 10,00,000 |
| 50 | 15,43,300 | 10,00,000 | 25,17,350 | 10,00,000 | |
| IRR | 2.82% | 6.04% | |||
At 4% p.a., the maturity value is ₹15.43 Lakhs, yielding an IRR of 2.82% as per the ICICI Pru Lakshya Wealth Plan’s Maturity Calculator, which is lower than the interest rate of a savings account.
At 8% p.a., the maturity value is ₹25.17 Lakhs, with an IRR of 6.04% as per the CICI Pru Lakshya Wealth Plan’s Maturity Calculator, which is less than the interest rate of fixed deposits.
The Sum Assured is relatively low, and the returns are unappealing for most investors. The IRR analysis highlights that the ICICI Pru Lakshya Wealth Plan may not be a profitable investment option.
ICICI Pru Lakshya Wealth Vs. Other Investments
The ICICI Pru Lakshya Wealth Plan falls short on both its investment and insurance components. To better understand its limitations, let’s compare its performance with an alternative strategy that separates life insurance and investments.
ICICI Pru Lakshya Wealth Vs. Pure-term + PPF/ELSS
Assume the same annual premium of ₹1,00,000 is used more efficiently for both life cover and investment.
Life Cover: A pure term life insurance policy with a Sum Assured of ₹10 Lakhs, a policy term of 20 years, and a premium-paying term of 10 years costs ₹6,600 annually. This leaves ₹93,400 available for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 6,600 |
| Investment | ₹ 93,400 |
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 30 | 1 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 31 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 32 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 33 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 34 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 35 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 36 | 7 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 37 | 8 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 38 | 9 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 39 | 10 | -97,500 | 10,00,000 | -1,00,000 | 10,00,000 |
| 40 | 11 | -500 | 10,00,000 | 0 | 10,00,000 |
| 41 | 12 | -500 | 10,00,000 | 0 | 10,00,000 |
| 42 | 13 | -500 | 10,00,000 | 0 | 10,00,000 |
| 43 | 14 | -500 | 10,00,000 | 0 | 10,00,000 |
| 44 | 15 | -500 | 10,00,000 | 0 | 10,00,000 |
| 45 | 16 | 0 | 10,00,000 | 0 | 10,00,000 |
| 46 | 17 | 0 | 10,00,000 | 0 | 10,00,000 |
| 47 | 18 | 0 | 10,00,000 | 0 | 10,00,000 |
| 48 | 19 | 0 | 10,00,000 | 0 | 10,00,000 |
| 49 | 20 | 0 | 10,00,000 | 0 | 10,00,000 |
| 50 | 27,56,302 | 10,00,000 | 51,21,208 | 10,00,000 | |
| IRR | 6.64% | 10.81% | |||
Investment Options:
PPF (Public Provident Fund): A low-risk instrument requiring a minimum annual investment of ₹500, adjusted after the 10-year premium-paying term. The final maturity value is ₹27.56 Lakhs with an IRR of 6.64%.
ELSS (Equity-Linked Savings Scheme): A high-risk equity-based instrument. The pre-tax maturity value is ₹57.01 Lakhs, and after capital gains tax, the post-tax maturity value is ₹51.21 Lakhs, offering a post-tax IRR of 10.81%.
| ELSS Tax Calculation | |
| Maturity value after 20 years | 57,01,524 |
| Purchase price | 9,34,000 |
| Long-Term Capital Gains | 47,67,524 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 46,42,524 |
| Tax paid on LTCG | 5,80,315 |
| Maturity value after tax | 51,21,208 |
The PPF and ELSS options deliver superior returns compared to the ICICI Pru Lakshya Wealth Plan. Bundling insurance and investment often results in lower returns.
For inflation-beating growth, separating investments from life insurance is a smarter strategy. This ensures a robust financial plan tailored for both protection and wealth creation.
Final Verdict on ICICI Pru Lakshya Wealth
The ICICI Pru Lakshya Wealth Plan is a traditional life insurance policy that combines protection with a savings component, encouraging individuals to save regularly and reap benefits at the end of the policy term.
However, combining insurance and investment often results in suboptimal returns, as seen with this plan. The returns analysis reveals that the plan fails to keep pace with inflation, making it inadequate for building the corpus needed to achieve future financial goals and also it has a high agent commission.
Moreover, the Sum Assured is too low to cover a family’s basic needs. A pure-term life insurance policy is a better alternative, offering high coverage at an affordable premium to meet your protection requirements.
When it comes to financial advice, are Quora, Facebook, and Twitter the final word?
When investing for life goals, it’s essential to consider your risk tolerance and the time horizon of each goal. For tailored advice and to explore modern investment options, consult a Certified Financial Planner who can help create a personalized strategy to secure your financial future.
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