ICICI Pru Smart Kid 360 Plan: Good or Bad? A Detailed Review
Can the ICICI Pru Smart Kid 360 Plan truly help secure your child’s financial future, or do its benefits come with important trade-offs?
Does the ICICI Pru Smart Kid 360 Plan provide the right combination of protection and savings for your child’s future, or are there better alternatives available?
Is the ICICI Pru Smart Kid 360 Plan a smart way to plan for your child’s future, or would separating insurance and investment offer greater flexibility?
This article examines the product and explores a more efficient way to fulfil your child’s dreams.
What is the ICICI Pru Smart Kid 360?
What are the features of the ICICI Pru Smart Kid 360?
Who is eligible for the ICICI Pru Smart Kid 360?
What are the benefits of the ICICI Pru Smart Kid 360?
Grace Period, Discontinuance and Revival of the ICICI Pru Smart Kid 360
Free Look Period for the ICICI Pru Smart Kid 360
Surrendering the ICICI Pru Smart Kid 360
What are the advantages of the ICICI Pru Smart Kid 360?
What are the disadvantages of the ICICI Pru Smart Kid 360?
Research Methodology of ICICI Pru Smart Kid 360
Benefit Illustration – IRR Analysis of ICICI Pru Smart Kid 360
ICICI Pru Smart Kid 360 Vs. Other Investments
ICICI Pru Smart Kid 360 Vs. Pure-term + Equity Mutual Fund
Final Verdict on the ICICI Pru Smart Kid 360
ICICI Pru Smart Kid 360 a Non-Participating, Non-Linked Life Individual Savings Product. It gives you the freedom to decide when lump-sum payouts should come, ensuring your child’s dreams are always backed with certainty.
In the unfortunate event of the parent’s passing, the policy continues, and benefits stay intact.
| Premium paying term | Minimum: 5 |
| Maximum: 12 | |
| Policy term | Minimum: 12 |
| Maximum: 25 | |
| Minimum/Maximum age at entry | 18/50 |
| Minimum/Maximum age at maturity | 30/65 |
| Policy term | Minimum Annualised premium |
| 5 to 6 | ₹ 1,50,000 |
| 7 to 9 | ₹ 50,000 |
| 10 to 12 | ₹ 30,000 |
| Maximum Annual Premium | Subject to Board-Approved Underwriting Policy (BAUP) |
| Premium Payment Frequency | Annual, Half-Yearly, Monthly |
| Minimum Sum Assured on Death | The absolute minimum Sum Assured on Death shall be ₹ 3,00,000 |
| Maximum Sum Assured on Death | Subject to Board Approved Underwriting Policy (BAUP) |
Under this ICICI Pru Smart Kid 360 Plan policy, you have an option to receive one or more Money Back benefit(s). Each Money Back benefit shall be set as a percentage of the Assured benefit (not exceeding 50% in any policy year).
Assured Benefit is defined as Annualised Premium multiplied by the Premium Payment Term chosen by the policyholder at the time of purchase of the policy.
The Money Back benefit percentage, amount and the payout dates shall remain fixed and cannot be changed throughout the ICICI Pru Smart Kid 360 Plan policy term.
Flexi Save Option
At any point in time during the policy term, you have an option to accumulate all or remaining accrued Money Back benefit(s) (if opted for at the inception of the policy) with the company instead of receiving it on the respective due dates. Such accumulated Money Back benefit shall earn a loyalty addition.
You can withdraw the accumulated Money Back benefit(s) partly/ fully at any time during the ICICI Pru Smart Kid 360 Plan policy term.
Post withdrawal, the balance, if any and all future Money Back benefit(s) (if any) shall continue to accumulate with daily accrual of loyalty additions
On the date of maturity for a fully paid policy, the maturity benefit, which is equal to the guaranteed maturity benefit (GMB) as specified in the policy schedule less the benefit paid under the Special Achievement Award feature (if exercised), will be payable in lumpsum to you.
Maturity benefit will be payable irrespective of the survival of the life assured on the date of maturity.
In the event of the death of the life assured prior to or on the date of maturity, then the maturity benefit shall be payable to the claimant.
Special Achievement Award Feature
This optional feature is applicable to your policy only if the nominee under the ICICI Pru Smart Kid 360 Plan policy is your biological or legally adopted child.
This feature can be exercised only once during the entire policy term. Under this feature, an amount equal to 20% of the Guaranteed Maturity Benefit shall become payable as a lump sum
While you’re paying your premiums or where all due premiums have been paid, in case of your unfortunate demise during the term of the ICICI Pru Smart Kid 360 Plan policy, the Death Benefit will be paid out as a lump sum to the person specified (known as the Claimant) in the policy.
Death Benefit is the highest of:
The policy shall continue, and all future premiums (if any) payable under the ICICI Pru Smart Kid 360 Plan policy shall be waived off as and when due.
The company shall pay the Money Back benefits (if any) on the respective Money Back payout dates (if opted for and if applicable) to the claimant.
Further, the Family Income Benefit (if opted for and if applicable) shall be payable to the claimant as explained
Family Income Benefit
This benefit is applicable under your policy only if opted for by you at policy inception.
Family Income Benefit will be paid as regular income on each subsequent policy anniversary following the date of death of the life assured till the date of maturity, provided all due premiums have been paid until the date of death of the life assured.
The percentage and the Family Income Benefit Amount shall remain fixed, i.e. 10% of Assured Benefit, throughout the policy term and cannot be changed later.
Grace Period
If the ICICI Pru Smart Kid 360 Plan policyholder is unable to pay an instalment premium by the due date, 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 you have not paid at least one full policy year’s premium, then the policy will lapse on expiry of the grace period.
If you do not revive the lapsed policy by the end of the revival period, it will be foreclosed (terminated), and all rights and benefits under the policy shall stand extinguished. In this case, no premiums shall be refunded by the company.
If your premium payment is not made within the grace period after you have completed payment of premiums for one full policy year, then your policy is said to have become “paid-up”.
And in such a case, your policy will continue with reduced benefits. In such a case, Paid-up Maturity Benefit, Paid-up Money Back Benefit, and Paid–up Death Benefit, as applicable, will be payable.
Revival
You can revive your policy benefits for their full value within five years from the due date of the first unpaid premium and before the date of maturity, whichever is earlier by paying all due premiums together with interest.
On receipt of the policy document, whether received electronically or otherwise, the policyholder has an option to review the ICICI Pru Smart Kid 360 Plan policy terms and conditions.
If the policyholder is not satisfied or has any disagreement with the terms and conditions of the policy or otherwise and has not made any claim, the policy document needs to be returned to the company with reasons for cancellation within 30 days from the date of receipt of the policy document.
You can surrender the policy any time after payment of at least one full policy year’s premium.
Prior to receipt of one full policy year’s premium, no surrender value is payable. On policy surrender, we will pay the Surrender Value equal to the higher of the following:
Guaranteed Surrender Value (GSV)
Special Surrender Value (SS
Low Returns: Although the plan offers assured benefits, the returns may be lower than the rate of inflation, reducing the real value of your money over time.
Goal Adequacy: The final benefit may not be sufficient to meet your child’s future financial goals, especially as education and other costs rise with inflation.
An investment should be evaluated not only based on its cash flows and guaranteed benefits but also on the returns it generates.
ICICI Pru Smart Kid 360 offers guaranteed payouts, but the actual return percentage is important when deciding whether the plan is suitable for your child’s future goals.
Based on the figures provided in the ICICI Pru Smart Kid 360 Plan policy brochure, consider a 40-year-old male who opts for a 20-year policy term with a 10-year premium payment term.
He pays an annual premium of ₹5 lakh, with a base sum assured of ₹50 lakh.
| Male | 40 years |
| Sum Assured | ₹ 50,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 5,00,000 |
After paying premiums for 10 years, he begins receiving payouts from the 11th policy year:
| At the end of the policy year | Amount |
| 11 | ₹ 7,50,000 |
| 13 | ₹ 10,00,000 |
| 16 | ₹ 15,00,000 |
| 18 | ₹ 1,75,00,000 |
| Maturity | ₹ 44,60,000 |
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -5,00,000 | 50,00,000 |
| 41 | 2 | -5,00,000 | 50,00,000 |
| 42 | 3 | -5,00,000 | 50,00,000 |
| 43 | 4 | -5,00,000 | 50,00,000 |
| 44 | 5 | -5,00,000 | 50,00,000 |
| 45 | 6 | -5,00,000 | 50,00,000 |
| 46 | 7 | -5,00,000 | 50,00,000 |
| 47 | 8 | -5,00,000 | 50,00,000 |
| 48 | 9 | -5,00,000 | 50,00,000 |
| 49 | 10 | -5,00,000 | 50,00,000 |
| 50 | 11 | 0 | 50,00,000 |
| 51 | 12 | 7,50,000 | 50,00,000 |
| 52 | 13 | 0 | 50,00,000 |
| 53 | 14 | 10,00,000 | 50,00,000 |
| 54 | 15 | 0 | 50,00,000 |
| 55 | 16 | 0 | 50,00,000 |
| 56 | 17 | 15,00,000 | 50,00,000 |
| 57 | 18 | 0 | 50,00,000 |
| 58 | 19 | 17,50,000 | 50,00,000 |
| 59 | 20 | 0 | 50,00,000 |
| 60 | 44,60,000 | 50,00,000 | |
| IRR | 5.02% |
The IRR on these cash flows works out to 5.02% as per the ICICI Pru Smart Kid 360 Plan maturity calculator.
While the payouts are guaranteed, the return is relatively low and may not keep pace with inflation.
With education costs potentially rising at around 10–12% annually, a return of 5.02% may leave a significant gap between the amount accumulated and your child’s future education expenses.
Therefore, despite offering guaranteed benefits, ICICI Pru Smart Kid 360 may not be an efficient strategy for meeting the rising cost of your child’s education.
Comparing the returns from ICICI Pru Smart Kid 360 with other investment options can help determine whether the plan is an efficient way to meet your child’s future financial goals.
Although the plan provides regular guaranteed payouts, these may not be sufficient to meet rising education costs.
Let us compare it with an alternative strategy using the same illustration.
For life cover of ₹50 lakh, a pure-term insurance policy with a 20-year policy term and a 10-year premium payment term would cost approximately ₹15,300 per year. In comparison, ICICI Pru Smart Kid 360 requires an annual premium of ₹5 lakh.
By choosing pure-term insurance, you save ₹4,84,700 every year, which can be invested towards your child’s future needs.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 50,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 15,300 |
| Investment | ₹ 4,84,700 |
For the first 10 years, after paying the term insurance premium, the balance is invested in an equity mutual fund.
At the end of 10 years, the investment is redeemed and moved to a 7% return instrument to provide regular payouts during the remaining 10 years.
| Term insurance + Equity Mutual Fund | ||
| Year | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 1 | -5,00,000 | 50,00,000 |
| 2 | -5,00,000 | 50,00,000 |
| 3 | -5,00,000 | 50,00,000 |
| 4 | -5,00,000 | 50,00,000 |
| 5 | -5,00,000 | 50,00,000 |
| 6 | -5,00,000 | 50,00,000 |
| 7 | -5,00,000 | 50,00,000 |
| 8 | -5,00,000 | 50,00,000 |
| 9 | -5,00,000 | 50,00,000 |
| 10 | -5,00,000 | 50,00,000 |
| 11 | 0 | 50,00,000 |
| 12 | 7,50,000 | 50,00,000 |
| 13 | 0 | 50,00,000 |
| 14 | 10,00,000 | 50,00,000 |
| 15 | 0 | 50,00,000 |
| 16 | 0 | 50,00,000 |
| 17 | 15,00,000 | 50,00,000 |
| 18 | 0 | 50,00,000 |
| 19 | 17,50,000 | 50,00,000 |
| 20 | 0 | 50,00,000 |
| 1,06,65,880 | 50,00,000 | |
| IRR | 8.48% | |
The equity mutual fund grows to approximately ₹95.26 lakh at the end of 10 years.
After considering capital gains tax, the post-tax corpus is ₹89.57 lakh, which is then invested in the 7% instrument.
Annual withdrawals are structured to replicate the survival benefits of ICICI Pru Smart Kid 360, with the remaining corpus withdrawn in the final year to match its maturity benefit.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 10 years | 95,26,577 |
| Purchase price | 48,47,000 |
| Long-Term Capital Gains | 46,79,577 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 45,54,577 |
| Tax paid on LTCG | 5,69,322 |
| Maturity value after tax | 89,57,254 |
The resulting IRR is approximately 8.48%, significantly higher than the 5.02% IRR from ICICI Pru Smart Kid 360.
More importantly, the alternative strategy offers a return that has a better chance of keeping pace with inflation, helping build a larger corpus for your child’s education and other future goals.
Therefore, separating insurance and investment can be a more efficient approach than relying on ICICI Pru Smart Kid 360 alone.
ICICI Pru Smart Kid 360 is essentially a money-back plan that provides periodic payouts after a limited premium-paying period, along with life cover during the policy term.
While the regular cash flows may appear suitable for meeting your child’s milestones, the structure has important limitations.
The plan offers a lump-sum death benefit and policy continuation benefit if the policyholder dies. However, the life cover may be inadequate to protect the family’s financial needs.
A pure-term life insurance policy can provide a much higher sum assured at a significantly lower premium, offering better financial protection.
Although all payouts under Smart Kid 360 are guaranteed, their timing may not always align with your actual financial requirements and it also has a high agent commission.
More importantly, the return analysis shows that the plan’s returns may not keep pace with inflation, creating a potential shortfall in the corpus required for your child’s future goals.
Therefore, using a ready-made child insurance plan may not be the most efficient way to build the required corpus.
A better approach is to buy adequate life insurance separately and invest separately for your child’s education and other goals, choosing suitable investment avenues based on your risk appetite.
Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?
A financial advisor can help structure the strategy according to your specific goals and time horizon.
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