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Will investing in ICICI Pru Protect N Gain help you achieve your long-term objectives and build wealth?
Can the ICICI Pru Protect N Gain Plan offer financial security and long-term wealth creation?
Can the ICICI Pru Protect N Gain Plan protect your loved ones and grow your wealth at the same time?
Let’s evaluate the features, benefits, drawbacks, costs, and potential returns of the ICICI Pru Protect N Gain plan. This review will also provide insight into how ULIPs (Unit Linked Insurance Plans) function.
Table of Contents:
What is the ICICI Pru Protect N Gain?
What are the features of the ICICI Pru Protect N Gain?
Who is eligible for the ICICI Pru Protect N Gain?
What are the benefits of the ICIC Pru Protect N Gain?
What are the Investment strategies and Fund options in the ICICI Pru Protect N Gain?
What are the charges under the ICICI Pru Protect N Gain?
Grace Period, Discontinuance and Revival of ICICI Pru Protect N Gain
Free Look Period for ICICI Pru Protect N Gain
Surrendering ICICI Pru Protect N Gain
What are the advantages of the ICICI Pru Protect N Gain?
What are the disadvantages of the ICICI Pru Protect N Gain?
Research Methodology of ICICI Pru Protect N Gain
Benefit Illustration – IRR Analysis of ICICI Pru Protect N Gain
ICICI Pru Protect N Gain Vs. Other Investment Products
ICICI Pru Protect N Gain Vs. Pure-term + ELSS
Final Verdict on ICICI Pru Protect N Gain
What is the ICICI Pru Protect N Gain?
ICICI Pru Protect N Gain is a Non-participating, Linked, Individual, Savings Life Insurance Plan. ICICI Pru Protect N Gain is a protection-oriented unit-linked savings life insurance plan, designed to safeguard your family with life cover and grow your wealth to fulfil your goals.
What are the features of the ICICI Pru Protect N Gain?
- Secure your family’s future with life insurance coverage.
- Select from two plan options tailored to your life stage and needs.
- Build wealth with market-linked returns.
- Enhance your coverage with two rider options.
- Access 4 investment strategies and choose from 22 fund options.
- Earn a Maturity Booster as a reward for staying invested until policy maturity.
- Receive regular monthly payouts for additional income through the Systematic Withdrawal Plan (SWP).
- Enjoy potential tax benefits on premiums and payouts as per current tax laws.
Who is eligible for the ICICI Pru Protect N Gain?
| Life option | Growth option | |
| Premium payment option | Limited pay | |
| Premium payment term | 5 – 12 years | |
| Policy term | 30 – 40 years | |
| Minimum/maximum age at entry | 18/60 years | |
| Minimum/maximum age at maturity | 48/90 years | |
| Minimum premium | ₹ 40,000 | ₹ 1,25,000 |
| Maximum Premium | Board approval | |
| Minimum Sum Assured | ₹ 4,00,000 | ₹ 12,50,000 |
| Maximum Sum Assured | Board approval | |
| Premium Payment Frequency | Annual, Half-yearly, Monthly | |
What are the benefits of the ICIC Pru Protect N Gain?
1.) Death benefit
Under both the ICICI Pru Protect N Gain Plan Options, if the Life Assured passes away during the policy term, the insurance cover amount will be paid out as a lump sum to the Claimant, provided the policy is in force and the monies are not in the Discontinued Policy Fund (DP Fund).
Death Benefit will be highest of:
- Sum Assured, including Top-up Sum Assured, if any
- Fund Value including the Top-up Fund Value, if any as available on the date of intimation of death or date of foreclosure/date of maturity whichever is earlier, or
- Minimum Death Benefit (105% of the total premiums paid, including top-up premiums, if any, received up to the date of death).
2.) Maturity benefit
Under both the Plan Options, on survival of the Life Assured until the end of the ICICI Pru Protect N Gain policy term i.e. at policy maturity, provided the policy has not already terminated, you will receive the Fund Value, including top-up Fund Value, if any.
What are the Investment strategies and Fund options in the ICICI Pru Protect N Gain?
Choice of Funds
As per your savings outlook & risk appetite, you can choose from a range of funds to save your money. The names of various funds available along with their risk-reward profile are given in the table below:
|
S. no |
Fund Name |
Asset Allocation |
Risk Profile |
||
|
Equity and Equity-related Securities |
Debt |
Money market and cash |
|||
|
1 |
Focus 50 Fund |
90-100% |
0-10% |
0-10% |
High |
|
2 |
India Growth |
80-100% |
0-20% |
0-20% |
High |
|
3 |
Opportunities Fund |
80-100% |
0-20% |
0-20% |
High |
|
4 |
Value Enhancer Fund |
85-100% |
0-15% |
0-15% |
High |
|
5 |
Multi Cap Growth Fund |
80-100% |
0-20% |
0-20% |
High |
|
6 |
Blue-chip Fund |
80-100% |
0-20% |
0-20% |
High |
|
7 |
Maximiser V |
75-100% |
0-25% |
0-25% |
High |
|
8 |
Maximise India Fund |
80-100% |
0-20% |
0-20% |
High |
|
9 |
Multi Cap Balanced Fund |
0-60% |
20-70% |
0-50% |
Moderate |
|
10 |
Active Asset Allocation Balanced Fund |
30-70% |
30-70% |
0-40% |
Moderate |
|
11 |
Secure Opportunities Fund |
0% |
60-100% |
0-40% |
Low |
|
12 |
Income Fund |
0% |
40-100% |
0-60% |
Low |
|
13 |
Money Market Fund |
0% |
0-50% |
50-100% |
Low |
|
14 |
Balanced Advantage Fund |
65-90% |
10-35% |
0-35% |
High |
|
15 |
Sustainable Equity Fund |
85-100% |
0-15% |
0-15% |
High |
|
16 |
Mid-Cap Fund |
85-100% |
0-15% |
0-15% |
High |
|
17 |
Mid-Cap Hybrid Growth Fund |
65-80% |
20-35% |
0-15% |
High |
|
18 |
Constant Maturity Fund |
0% |
75-100% |
0-25% |
Moderate |
|
19 |
Mid-cap Index Fund |
90-100% |
0-10% |
0-10% |
High |
|
20 |
Mid-cap 150 Momentum 50 Index Fund |
90-100% |
0-10% |
0-10% |
High |
|
21 |
Multicap 50 25 25 Index Fund |
90-100% |
0-10% |
0-10% |
High |
|
22 |
MidSmall cap 400 Index Fund |
90-100% |
0-10% |
0-10% |
High |
|
23 |
MidSmallCap 400 Momentum Quality 100 Index Fund |
90-100% |
0-10% |
0-10% |
High |
|
24 |
Smallcap 250 Momentum Quality 100 Index Fund |
90-100% |
0-10% |
0-10% |
High |
Choice of Portfolio Strategies
You can choose from four portfolio strategies to save your money as per your risk appetite. These are given below:
i.) Fixed Portfolio Strategy
Under this strategy, you can choose to save your money in any of the following fund options in the proportions of your choice. You can switch your investment amount amongst these funds using the switch option.
Within the Fixed Portfolio Strategy, you also have the option to select Automatic Transfer Strategy (ATS).
To protect your savings against market uncertainties, you can save all or part of your savings in one or more debt/ equity fund(s) and transfer a fixed amount regularly to one or more equity/ debt fund(s).
Premium redirection and Unlimited free switches between funds are allowed for Fixed Portfolio Strategy.
ii.) Target Asset Allocation Strategy
This strategy enables you to choose an asset allocation that is best suited to your risk appetite and maintains it throughout the ICICI Pru Protect N Gain policy term.
You can allocate your premiums between any two funds available with this policy, in the proportion of your choice. Your portfolio will be rebalanced every quarter to ensure that this asset allocation is maintained.
iii.) Trigger Portfolio Strategy
Under this strategy, your savings will initially be distributed between two funds Multi Cap Growth Fund, an equity-oriented fund, and Income Fund, a debt-oriented fund in a 75%: 25% proportion.
The fund allocation may subsequently get altered due to market movements. They will re-balance funds in the portfolio based on a trigger event.
vi.) Lifecycle-based Portfolio Strategy
At Policy inception, your savings are distributed between two funds, Multi Cap Growth Fund and Income Fund, based on your age. As you move from one age band to another, your funds are re-distributed based on your age.
| Age of Policyholder (years) | Multi Cap Growth Fund | Income Fund |
| Up to 25 | 80% | 20% |
| 26-35 | 75% | 25% |
| 36-45 | 65% | 35% |
| 46-55 | 55% | 45% |
| 56-65 | 45% | 55% |
| 66+ | 35% | 65% |
What are the charges under the ICICI Pru Protect N Gain?
A. Premium allocation charges
It shall be levied in the first 7 policy years as a percentage of the premium as follows:
| Year | % of premium |
| year 1 – 3 | 6% |
| Year 4 – 7 | 3% |
| Thereafter | NIL |
B. Fund Management charge
It is 0.75% p.a. for Money market fund and 1.35% p.a. for all other funds. For discontinued policy funds, it is o.50% p.a.
C. Policy Administration charges
It will be levied from the 4th policy year at the beginning of every month. It is 0.34% of Annual Premium for the 4th policy year and thereafter, it will increase by 5% p.a. every year.
D. Mortality Charges
It is the cost of the life insurance cover and depends on your age, gender & chosen sum assured. These charges will be levied every month by redemption of units based on the Sum at Risk.
| Age | 30 | 40 | 50 |
| Male | 1.075 | 1.848 | 4.88 |
| Female | 1.037 | 1.599 | 3.89 |
E. Discontinuance charge
It depends on the year of discontinuance and the annualised premium amount. There is no discontinuance charge from the 5th policy year.
Inference from charges: The ICICI Pru Protect N Gain plan deducts several charges before your premium is invested. Charges such as Premium Allocation, Discontinuance, and Mortality Charges continue throughout the policy term.
In comparison, other market-linked products tend to have lower charges and more transparent investment processes. These high charges in ULIPs can impact your returns over time.
Grace Period, Discontinuance and Revival of ICICI Pru Protect N Gain
Grace Period
The grace period for payment of premium is 15 days for monthly mode of premium payment and 30 days for other modes of premium payment commencing from the premium due date.
Discontinuance
In case of discontinuance during the first five policy years: the Fund Value including Top-up Fund Value, if any, shall be credited to the DP Fund after deduction of applicable discontinuance charges and the risk cover and rider cover, if any, shall cease.
If you do not exercise the option to revive the ICICI Pru Protect N Gain policy, the monies will remain in the DP fund and will be paid out at the end of the lock-in period (5 years).
In case of discontinuance after the first five policy years: the ICICI Pru Protect N Gain policy will be converted into a reduced paid-up policy with a paid-up sum assured.
Reduced paid-up Sum Assured = Original Sum Assured X (Total number of premiums paid till the date of discontinuance/ Original number of premiums payable as per applicable terms and conditions of the policy)
Revival
The revival period is three years from the date of the first unpaid premium.
Free Look Period for ICICI Pru Protect N Gain
If you are not satisfied with the terms and conditions of this ICICI Pru Protect N Gain policy, you can return the Policy Document within 30 days from the date you received it, whether received electronically or otherwise.
Surrendering ICICI Pru Protect N Gain
During the first five policy years: the Fund Value including Top-up Fund Value, if any, after deduction of applicable Discontinuance Charge, shall be transferred to the Discontinued Policy Fund (DP Fund).
The proceeds of the discontinued policy shall be refunded only upon completion of the lock-in period (5 years)
On surrender after completion of the fifth policy year, you will be entitled to the Fund Value including Top-up Fund Value, if any.
What are the advantages of the ICICI Pru Protect N Gain?
- Premium allocation charges and mortality charges are refunded.
- A Maturity Booster is added as extra units at the end of the ICICI Pru Protect N Gain policy term to enhance your fund value.
- You have the option to receive the Maturity Benefit as structured payouts or an income stream for up to 5 years post-maturity.
- Invest additional funds through a Top-up premium.
- Partial withdrawals are permitted after the lock-in period ends.
- You can modify the premium payment frequency.
- Benefits are protected under the Married Women’s Protection Act (MWP Act), safeguarding them from legal attachment by the court.
What are the disadvantages of the ICICI Pru Protect N Gain?
- There is a 5-year lock-in period for surrenders or partial withdrawals.
- The ICICI Pru Protect N Gain plan does not offer a loan facility.
- The minimum policy term is 30 years.
- Fund options lack uniqueness, with overlapping investment strategies.
- The net premium is invested after deducting various charges.
Research Methodology of ICICI Pru Protect N Gain
Now, let’s move on to the calculation section. The goal of investing in a market-linked product is to accelerate wealth accumulation. To determine if this investment meets that goal, we need to calculate the returns.
We’ll begin by finding the Internal Rate of Return (IRR) based on the benefit illustration provided in the policy brochure.
Benefit Illustration – IRR Analysis of ICICI Pru Protect N Gain
For example, a 30-year-old male opts for the ICICI Pru Protect N Gain plan with a sum assured of ₹1 Crore. The annual premium is ₹80,000, with a policy term of 40 years and a premium-paying term of 10 years.
| Male | 30 years |
| Sum Assured | ₹ 1,00,00,000 |
| Policy Term | 40 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 80,000 |
The returns assumed in this illustration are purely for illustrative purposes. The rates of 4% p.a. and 8% p.a. shown here are not guaranteed, nor are they the maximum or minimum returns you might receive, as the fund value is influenced by various factors, including future investment performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 30 | 1 | -80,000 | 1,00,00,000 | -80,000 | 1,00,00,000 |
| 31 | 2 | -80,000 | 1,00,00,000 | -80,000 | 1,00,00,000 |
| 32 | 3 | -80,000 | 1,00,00,000 | -80,000 | 1,00,00,000 |
| 33 | 4 | -80,000 | 1,00,00,000 | -80,000 | 1,00,00,000 |
| 34 | 5 | -80,000 | 1,00,00,000 | -80,000 | 1,00,00,000 |
| 35 | 6 | -80,000 | 1,00,00,000 | -80,000 | 1,00,00,000 |
| 36 | 7 | -80,000 | 1,00,00,000 | -80,000 | 1,00,00,000 |
| 37 | 8 | -80,000 | 1,00,00,000 | -80,000 | 1,00,00,000 |
| 38 | 9 | -80,000 | 1,00,00,000 | -80,000 | 1,00,00,000 |
| 39 | 10 | -80,000 | 1,00,00,000 | -80,000 | 1,00,00,000 |
| 40 | 11 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 41 | 12 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 42 | 13 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 43 | 14 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 44 | 15 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 45 | 16 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 46 | 17 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 47 | 18 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 48 | 19 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 49 | 20 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 50 | 21 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 51 | 22 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 52 | 23 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 53 | 24 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 54 | 25 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 55 | 26 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 56 | 27 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 57 | 28 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 58 | 29 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 59 | 30 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 60 | 31 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 61 | 32 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 62 | 33 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 63 | 34 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 64 | 35 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 65 | 36 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 66 | 37 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 67 | 38 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 68 | 39 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 69 | 40 | 0 | 1,00,00,000 | 0 | 1,00,00,000 |
| 70 | 28,00,026 | 82,08,186 | |||
| IRR | 3.58% | 6.73% | |||
If all premiums are paid, the fund value will be paid out as a maturity benefit. At an assumed rate of 4%, the fund value would be ₹28 Lakhs, with an IRR of 3.58% as per the ICICI Pru Protect N Gain Plan maturity calculator.
At an assumed rate of 8%, the fund value would be ₹82.08 Lakhs, with an IRR of 6.73% as per the ICICI Pru Protect N Gain Plan maturity calculator.
However, the potential returns from ICICI Pru Protect N Gain are lower than those of traditional debt instruments. This undermines the purpose of investing in a market-linked product, ultimately slowing down your wealth accumulation or potentially resulting in a shortfall.
ICICI Pru Protect N Gain Vs. Other Investment Products
Long-term investments should outpace inflation. However, the ICICI Pru Protect N Gain, with a policy term of 30-40 years, fails to deliver inflation-beating returns.
Let’s now explore better alternatives where you could generate higher returns by investing the same premium as shown in the earlier example.
ICICI Pru Protect N Gain Vs. Pure-term + ELSS
A pure term life insurance policy with a sum assured of ₹1 Crore would cost ₹30,800 per year. With a policy term of 40 years and a premium-paying term of 10 years, this leaves ₹49,200 from the original premium, which can be invested to generate higher returns.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 1,00,00,000 |
| Policy Term | 40 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 30,800 |
| Investment | ₹ 49,200 |
Choosing the right investment avenue based on your risk tolerance is crucial. High-risk investors may prefer equity, while low-risk investors may opt for debt. In this case, we’ve selected an ELSS fund, which is also market-linked.
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 30 | 1 | -80,000 | 1,00,00,000 |
| 31 | 2 | -80,000 | 1,00,00,000 |
| 32 | 3 | -80,000 | 1,00,00,000 |
| 33 | 4 | -80,000 | 1,00,00,000 |
| 34 | 5 | -80,000 | 1,00,00,000 |
| 35 | 6 | -80,000 | 1,00,00,000 |
| 36 | 7 | -80,000 | 1,00,00,000 |
| 37 | 8 | -80,000 | 1,00,00,000 |
| 38 | 9 | -80,000 | 1,00,00,000 |
| 39 | 10 | -80,000 | 1,00,00,000 |
| 40 | 11 | 0 | 1,00,00,000 |
| 41 | 12 | 0 | 1,00,00,000 |
| 42 | 13 | 0 | 1,00,00,000 |
| 43 | 14 | 0 | 1,00,00,000 |
| 44 | 15 | 0 | 1,00,00,000 |
| 45 | 16 | 0 | 1,00,00,000 |
| 46 | 17 | 0 | 1,00,00,000 |
| 47 | 18 | 0 | 1,00,00,000 |
| 48 | 19 | 0 | 1,00,00,000 |
| 49 | 20 | 0 | 1,00,00,000 |
| 50 | 21 | 0 | 1,00,00,000 |
| 51 | 22 | 0 | 1,00,00,000 |
| 52 | 23 | 0 | 1,00,00,000 |
| 53 | 24 | 0 | 1,00,00,000 |
| 54 | 25 | 0 | 1,00,00,000 |
| 55 | 26 | 0 | 1,00,00,000 |
| 56 | 27 | 0 | 1,00,00,000 |
| 57 | 28 | 0 | 1,00,00,000 |
| 58 | 29 | 0 | 1,00,00,000 |
| 59 | 30 | 0 | 1,00,00,000 |
| 60 | 31 | 0 | 1,00,00,000 |
| 61 | 32 | 0 | 1,00,00,000 |
| 62 | 33 | 0 | 1,00,00,000 |
| 63 | 34 | 0 | 1,00,00,000 |
| 64 | 35 | 0 | 1,00,00,000 |
| 65 | 36 | 0 | 1,00,00,000 |
| 66 | 37 | 0 | 1,00,00,000 |
| 67 | 38 | 0 | 1,00,00,000 |
| 68 | 39 | 0 | 1,00,00,000 |
| 69 | 40 | 0 | 1,00,00,000 |
| 70 | 2,54,27,108 | ||
| IRR | 10.12% | ||
At the end of 40 years, the ELSS fund grows to ₹2.89 Crores. After accounting for capital gains tax, the post-tax value stands at ₹2.54 Crores, yielding a post-tax return of 10.12%.
| ELSS Tax Calculation | |
| Maturity value after 20 years | 2,89,71,409 |
| Purchase price | 4,92,000 |
| Long-Term Capital Gains | 2,84,79,409 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 2,83,54,409 |
| Tax paid on LTCG | 35,44,301 |
| Maturity value after tax | 2,54,27,108 |
This alternative strategy clearly shows that combining investment and insurance is not ideal. The key benefits of this approach are better returns (alpha generation) and liquidity—two factors missing in the ICICI Pru Protect N Gain plan.
Final Verdict on ICICI Pru Protect N Gain
With ICICI Pru Protect N Gain, you pay premiums for a limited period while receiving life cover for the entire policy term. However, only a portion of your premium is invested in the market, and that too after several charges are deducted.
At maturity, you receive the fund value. However, as the name suggests, the plan fails to deliver on both protection and gain (growth).
The potential returns of ICICI Pru Protect N Gain are not justifiable given the risks involved and it has a high agent commission.
Additionally, the policy’s long-term nature—requiring a minimum term of 30 years—offers returns that are not proportionate to the risks. One key reason for these lower returns is the high charges.
Combining investment and insurance in one plan doesn’t help you achieve either goal effectively. Instead, opt for a pure-term insurance plan to ensure life cover, which provides financial protection for your family at an affordable cost.
For wealth accumulation, it’s better to build a diversified investment portfolio.
When it comes to financial advice, are Quora, Facebook, and Twitter the final word?
To create a strong portfolio, select investment products based on your risk tolerance, time horizon, and financial goals. If you need guidance, consider consulting a financial professional who can help you craft a personalized financial plan tailored to your unique needs.
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