ICICI Pru Sukh Samruddhi Plan: Good or Bad? An Insightful Review
Will the ICICI Pru Sukh Samruddhi Plan give you the confidence to keep pace with all your goals?
Will investing in the ICICI Pru Suk Samruddhi Plan help you achieve all your milestones across all stages of life?
Taking care of your family’s needs and requirements will be your priority. So they can be financially secure even in the face of shifting circumstances and unprecedented times.
Should this investment product be a part of your investment portfolio?
In this article, let us review the ICICI Pru Suk Samruddhi Plan’s Advantages (Pros) and Disadvantages (Cons) along with the potential return of the plan.
This Research Analysis will guide you in choosing the right investment product and make those informed investment decisions.
1.) What is the ICICI Pru Sukh Samruddhi Plan?
2.) What are the Features of the ICICI Pru Sukh Samruddhi Plan?
3.) Who is Eligible to invest in the ICICI Pru Sukh Samruddhi Plan?
4.) ICICI Pru Sukh Samruddhi Plan Benefits in Detail
5.) ICICI Pru Sukh Samruddhi Plan Grace Period, Discontinuance, and Revival
6.) ICICI Pru Sukh Samruddhi Plan Free Look period
7.) Surrendering ICICI Pru Sukh Samruddhi Plan
8.) Advantages of ICICI Pru Sukh Samruddhi Plan
9.) Disadvantages of ICICI Pru Sukh Samruddhi Plan
10.) ICICI Pru Sukh Samruddhi Plan Research Methodology
11.) ICICI Pru Sukh Samruddhi Plan VS Other Investment
11.) ICCI Pru Sukh Samruddhi Plan VS Other Investment Options – Review Conclusion
12.) Final Verdict on ICICI Pru Sukh Samruddhi Plan
ICICI Pru Sukh Samruddhi is a Participating Savings-Oriented Life Insurance Plan.
It helps to grow your savings through participation in bonuses and provides you with the flexibility in availing the benefits either as a one-time lump sum or as regular income.
After successful completion of the premium paying term, the life insured will be entitled to receive the Guaranteed Income throughout the policy term. It can either be given at the end of each month or year.
You will receive the Guaranteed Income for the selected Income Term chosen by you at inception.
If the policyholder survives till the end of the policy term and no due premiums are left, then in addition to the Maturity Benefit last GI pay-out will also be paid.
Maturity Benefit = Accrued reversionary bonus, if declared + Terminal bonus if declared
Death Benefits will be higher of:
Where Sum Assured on Death is:
If the policyholder survives till the end of the policy term, he will be eligible to receive the Maturity Benefit.
Maturity Benefit= Sum assured on maturity + accrued reversionary bonus if declared +terminal bonus if declared
Here the Maturity benefit depends on your Premium, Premium Paying Term, Policy Term, Age, and Gender. The Sum Assured on Maturity is expressed as a multiple of the Annualised Premium.
Death Benefits will be higher of:
Where Sum Assured on Death is:
For Limited Pay:
For Regular Pay:
A grace period of 15 days will be given for payment of the due installment premium monthly frequency, and 30 days will be given for payment of the due installment premium for any other frequency commencing from the premium due date.
If you stop paying premiums in the first two years, the policy will lapse on the expiry of the grace period. If you do not revive the lapsed policy by the end of the revival period, it will terminate and no benefits will be payable.
If you stop paying premiums after you paid premiums for the first two full years, your policy acquires a surrender value and is said to have become a “paid-up” policy.
A paid-up policy is one where you are entitled to get benefits, but these benefits will be lower than actual benefits since you would have paid less than the total premiums supposed to be paid.
You can revive your policy benefits for their full value within five years from the due date of the first unpaid premium by paying all due premiums together with interest before the termination date of the policy.
If you are not satisfied with the terms and conditions of the policy, you can return the policy within 15 days from the date you received it, if your policy is not purchased through Distance marketing
Or 30 days from the date you received it, in the case of electronic policies or if your policy is purchased through Distance marketing.
For any more clarification, you can refer to the ICCI Pru Sukh Samruddhi Plan Policy Brochure
After payment of premiums for at least the first two full years, if you are not able to continue your policy, a surrender value will be payable. On surrendering the policy, you will receive the higher of the following:
ICICI Pru Sukh Samruddhi offers two plan options. The bonus declaration plays a major role as all the benefits that come under both regular income and lumpsum are dependent on this rate.
So, let us work out the potential return of the plan to figure out the efficiency. A quote was taken from the ICICI website to calculate the Internal Rate Return of the plan.
A 35-year-old buys ICICI Pru Sukh Samruddhi for a sum assured of ₹ 10.5 Lakhs. The premium paying term and the policy term are 15 years. The annualized premium is ₹ 1 Lakh. He chooses plan option 2 Lumpsum.
| Male | 35 years |
| Sum Assured | 10,50,000 |
| Policy Term | 15 years |
| Premium Paying Term | 15 years |
| Annualised Premium | 1,00,000 |
At the end of 15 years, he receives the maturity benefit. The illustration assumes two future investment returns – 4% p.a. and 8% p.a.
The returns depicted in this illustration are not guaranteed and do not indicate any upper limit or lower limit of this plan.
The returns of the plan depend on various factors which include future investment performances as well.
| 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 | 10,50,000 | -1,00,000 | 10,50,000 |
| 36 | 2 | -1,00,000 | 10,50,001 | -1,00,000 | 10,50,001 |
| 37 | 3 | -1,00,000 | 10,50,002 | -1,00,000 | 10,50,002 |
| 38 | 4 | -1,00,000 | 10,50,003 | -1,00,000 | 10,50,003 |
| 39 | 5 | -1,00,000 | 10,50,004 | -1,00,000 | 10,50,004 |
| 40 | 6 | -1,00,000 | 10,50,005 | -1,00,000 | 10,50,005 |
| 41 | 7 | -1,00,000 | 10,50,006 | -1,00,000 | 10,50,006 |
| 42 | 8 | -1,00,000 | 10,50,007 | -1,00,000 | 10,50,007 |
| 43 | 9 | -1,00,000 | 10,50,008 | -1,00,000 | 10,50,008 |
| 44 | 10 | -1,00,000 | 10,50,009 | -1,00,000 | 10,50,009 |
| 45 | 11 | -1,00,000 | 10,50,010 | -1,00,000 | 10,50,010 |
| 46 | 12 | -1,00,000 | 10,50,011 | -1,00,000 | 10,50,011 |
| 47 | 13 | -1,00,000 | 10,50,012 | -1,00,000 | 10,50,012 |
| 48 | 14 | -1,00,000 | 10,50,013 | -1,00,000 | 10,50,013 |
| 49 | 15 | -1,00,000 | 10,50,014 | -1,00,000 | 10,50,014 |
| 50 | 17,97,467 | 10,50,015 | 23,79,441 | 10,50,015 | |
| IRR | 2.23% | 5.58% | |||
The final maturity value under the 4% scenario is ₹ 17.97 Lakhs. Under the gross return of 4%, the net return is 2.23%. If you keep the money idle in your Savings bank account, you can yield better interest and you have the liquidity benefit.
The final maturity value under the 8% scenario is ₹ 23.79 Lakhs. Under the gross return of 8%, the net return is 5.58%. If you invest in a Bank fixed deposit, it can yield better returns.
To combat inflation in the long run, your investment should yield more than the inflation rate. The IRR under both scenarios is less than the inflation rate, making it uneconomical.
The potential returns calculation reveals that ICICI Pru Sukh Samruddhi is unfavorable for long-term investment. Getting better returns from the investment is the main agenda under any investment plan.
In order to meet this, let us look for some alternate options where we can channelise the same premium paid ICICI Pru Sukh Samruddhi.
To make the comparison process easier, let us assume the same metric as seen in the above illustration.
| Pure Term Life Insurance Policy | |
| Sum Assured | 10,50,000 |
| Policy Term | 15 years |
| Premium Paying Term | 15 years |
| Annualised Premium | 5,300 |
| Investment | 94,700 |
The premium amount in the earlier illustration was ₹ 1Lakh. Out of this amount, we need to set aside a Pure Term Life Insurance policy premium.
A pure term life insurance policy for a sum assured of ₹ 10.5Lakhs would cost ₹ 5,300. So, every year you can invest ₹ 94,700
PPF – The account matures after 15 years. The proceeds are fully tax-free
ELSS – The units can be redeemed after 15 years. The ELSS returns are subject to Capital gains tax. So, we need to set aside the tax liability. Tax calculation is given below.
| 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 | 10,50,000 | -1,00,000 | 10,50,000 |
| 36 | 2 | -1,00,000 | 10,50,001 | -1,00,000 | 10,50,001 |
| 37 | 3 | -1,00,000 | 10,50,002 | -1,00,000 | 10,50,002 |
| 38 | 4 | -1,00,000 | 10,50,003 | -1,00,000 | 10,50,003 |
| 39 | 5 | -1,00,000 | 10,50,004 | -1,00,000 | 10,50,004 |
| 40 | 6 | -1,00,000 | 10,50,005 | -1,00,000 | 10,50,005 |
| 41 | 7 | -1,00,000 | 10,50,006 | -1,00,000 | 10,50,006 |
| 42 | 8 | -1,00,000 | 10,50,007 | -1,00,000 | 10,50,007 |
| 43 | 9 | -1,00,000 | 10,50,008 | -1,00,000 | 10,50,008 |
| 44 | 10 | -1,00,000 | 10,50,009 | -1,00,000 | 10,50,009 |
| 45 | 11 | -1,00,000 | 10,50,010 | -1,00,000 | 10,50,010 |
| 46 | 12 | -1,00,000 | 10,50,011 | -1,00,000 | 10,50,011 |
| 47 | 13 | -1,00,000 | 10,50,012 | -1,00,000 | 10,50,012 |
| 48 | 14 | -1,00,000 | 10,50,013 | -1,00,000 | 10,50,013 |
| 49 | 15 | -1,00,000 | 10,50,014 | -1,00,000 | 10,50,014 |
| 50 | 25,68,396 | 10,50,015 | 37,10,682 | 10,50,015 | |
| IRR | 6.47% | 10.68% | |||
The final maturity value under the PPF account is 25.68 lakhs. The IRR for Term insurance premium with PPF combo gives you a return of 6.47%.
The final maturity value under the ELSS fund is 3.10 Lakhs (post-tax value). The IRR for Term insurance premium with ELSS combo gives you a return of 10.68% (post-tax return).
| ELSS Tax Calculation | |
| Maturity value after 15 years | 39,54,036 |
| Purchase price | 14,20,500 |
| Long-Term Capital Gains | 25,33,536 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 24,33,536 |
| Tax paid on LTCG | 2,43,354 |
| Maturity value after tax | 37,10,682 |
Under both scenarios, you have the advantage of liquidity and returns. These two aspects are missing in ICICI Pru Sukh Samruddhi.
Will ICCI Pru Assured Savings help you enhance your savings? Let’s start by analysing some of the key features of this plan.
For further insights into this ICCI Pru Assured Savings Plan. We suggest you read our article on: ICICI Pru Assured Savings Plan: Insightful Review – Good or Bad?
As the name suggests, will this plan add more value to your Investment Portfolio? To get a better idea let’s delve into some of the key features.
To know more about the Benefits, Advantages, and Suitability of this ICICI Pru Gold Plan. You can refer to our article on: ICICI Pru Gold Plan Review – Good or Bad Investment Option?
Since the returns that you generated from ICCI Sukh Samruddhi Plan are not adjusted to inflation it cannot be considered as Long Term Investment Vehicle.
Whereas the other investments seem to offer better risk-adjusted and more importantly inflation-beating returns which is more than useful to your financial goals.
Some goals in life that require a regular flow of income and for some goals, you need to accumulate a corpus like marriage, retirement kitty, etc.
ICICI Pru Sukh Samruddhi is designed to receive either regular income or a lumpsum amount. You can choose the policy term and premium paying term based on your preference.
While analysing the plan, it clearly shows that the life cover will not be adequate to meet the family’s future needs. The IRR analysis shows that it is a low-yielding product with a High Agent Commission. So, both in terms of insurance and investment aspects, it is not favourable for an investor.
The comparison part demonstrates how to channelise the same premium amount effectively. A Pure-Term Life Insurance Policy for Life Cover and Diversified Investment Portfolio is essential to achieve all your goals.
At times you might caught up in the buzz happening on Social Media Platforms like Quora, Facebook, Twitter, etc., and make those wrong investment choices. To avoid this you need to have a clear understanding of your Investment Objective and your Financial Goals.
Investing separately for life goals envisages a bright future. For any assistance, you can consult a finance professional who will guide you in drafting a financial plan based on your personal preferences.
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