Is ICICI Pru Smart Kid Assure Plan the smart choice for your child’s future, or just another expensive ULIP wrapped in emotional marketing?
Does ICICI Pru Smart Kid Assure Plan live up to its promise of long-term growth, or is it weighed down by high charges and complexity?
Does ICICI Pru Smart Kid Assure Plan align with your financial goals, or does it distract from more efficient wealth-building tools?
In this review, we’ll break down the plan’s features, along with its pros and cons, to help you make an informed decision.
Table of Contents
What is the ICICI Pru Smart Kid Assure?
What are the features of the ICICI Pru Smart Kid Assure?
Who is eligible for the ICICI Pru Smart Kid Assure?
Research Methodology of ICICI Pru Smart Kid Assure
Benefit Illustration – IRR Analysis of ICICI Pru Smart Kid Assure
ICICI Pru Smart Kid Assure Vs. Other Investment
ICICI Pru Smart Kid Assure Vs. Pure-term + PPF/ELSS
Final Verdict on ICICI Pru Smart Kid Assure Plan
What is the ICICI Pru Smart Kid Assure?
ICICI Pru Smart Kid Assure Plan is a Unit Linked Insurance Plan. This plan comes under the ICICI Pru Signature Assure Plan.
We’ve already reviewed the ICICI Pru Signature Assure Plan in detail. You can read the full analysis here: ICICI Pru Signature Assure Review
What are the features of the ICICI Pru Smart Kid Assure?
- No premium allocation charges
- Opportunity to build wealth through market-linked returns
- Option for systematic withdrawals to receive regular payouts
- In case of the life assured’s death, future premiums are waived, and the family receives a regular annual income (if chosen)
- Flexibility to invest more through top-up premiums
- Eligible for tax benefits as per the prevailing tax laws
Who is eligible for the ICICI Pru Smart Kid Assure?
Age at entry | Premium paying term | Minimum/Maximum age at entry | Minimum/Maximum age at maturity | Policy term |
18-45 | 5 to 15 | 18/50 | 33/65 | 15-25 |
46-50 | 7 to 15 | |||
Policy term | Minimum premium (Yearly) | |||
15-19 | ₹ 48,000 yearly; ₹ 24,000 half yearly; ₹ 4,000 monthly | |||
20-25 | ₹ 30,000 yearly; ₹ 15,000 half yearly; ₹ 2,500 monthly | |||
Base policy | Minimum Sum Assured: 7 times Annualized Premium | |||
Maximum Sum Assured: 10 times Annualized Premium | ||||
Top-ups | 1.25 times Top-up Premium or 10 times Top-up Premium |
Research Methodology of ICICI Pru Smart Kid Assure
We’ve gone through the features and benefits of the ICICI Pru Smart Kid Assure plan. Now, let’s look at the numbers to assess its actual performance. We’ll calculate the Internal Rate of Return (IRR) and compare it with other market-linked investment options.
Benefit Illustration – IRR Analysis of ICICI Pru Smart Kid Assure
A 30-year-old male opts for the plan, paying an annual premium of ₹1,00,000 for 10 years. The ICICI Pru Smart Kid Assure Plan policy term is 20 years, and the sum assured is ₹10,00,000. At the end of the term, the fund value is paid out as the maturity benefit.
Male | 30 years |
Sum Assured | ₹ 10,00,000 |
Policy Term | 20 years |
Premium Paying Term | 10 years |
Annualized Premium | ₹ 1,00,000 |
Based on standard illustrations, the projected returns are:
At 4% annual growth, the Fund value is ₹12 lakhs, with an IRR of just 1.18%, as per the ICICI Pru Smart Kid Assure Plan maturity calculator.
At 8% annual growth, the Fund value is ₹24 lakhs, with an IRR of 5.72%, as per the ICICI Pru Smart Kid Assure Plan maturity calculator.
At 4% p.a. | At 8% p.a. | ||||
Age | Year | Annualized premium / Maturity benefit | Death benefit | Annualized 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 | 12,00,000 | 24,00,000 | |||
IRR | 1.18% | 5.72% |
Even at the higher return scenario, the IRR struggles to keep pace with inflation. Despite being a market-linked product, the plan’s returns are not compelling enough to support long-term goals like your child’s education.
Moreover, the maturity timeline doesn’t align with typical higher education milestones.
In short, including ICICI Pru Smart Kid Assure Plan in your portfolio may actually set your child’s dreams off track rather than secure them.
ICICI Pru Smart Kid Assure Vs. Other Investment
Let’s now compare the returns from the ICICI Pru Smart Kid Assure plan with other investment options. For any long-term investment to be truly effective, it must beat inflation. That’s why it’s important to explore alternatives that offer better returns and flexibility.
ICICI Pru Smart Kid Assure Vs. Pure-term + PPF/ELSS
Start with a pure term life insurance policy to meet your protection needs. For example, a term plan with a ₹10 lakh sum assured and a 20-year term costs just around ₹5,700 annually.
Compare this to the ₹1 lakh annual premium paid under the Smart Kid Assure plan, and you’re left with an investible surplus of ₹94,300 each year.
Pure Term Life Insurance Policy | |
Sum Assured | ₹ 10,00,000 |
Policy Term | 20 years |
Premium Paying Term | 10 years |
Annualized Premium | ₹ 5,700 |
Investment | ₹ 94,300 |
Depending on your risk profile, this amount can be directed to either debt or equity-based investments.
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 | 27,82,871 | 51,70,406 | |||
IRR | 6.71% | 10.87% |
PPF (Public Provident Fund): With consistent annual investments and adjustments post the 10-year term, the maturity value after 20 years is approximately ₹27.82 lakhs, delivering an IRR of 6.71%.
ELSS (Equity Linked Savings Scheme): With the same investment pattern, the maturity amount is about ₹57.56 lakhs before tax. After applying long-term capital gains tax, the post-tax value is ₹51.70 lakhs, translating to an impressive IRR of 10.87%.
ELSS Tax Calculation | |
Maturity value after 20 years | 57,56,464 |
Purchase price | 9,43,000 |
Long-Term Capital Gains | 48,13,464 |
Exemption limit | 1,25,000 |
Taxable LTCG | 46,88,464 |
Tax paid on LTCG | 5,86,058 |
Maturity value after tax | 51,70,406 |
Pairing a term insurance plan for protection with smart investments tailored to your risk appetite allows you to achieve higher returns while also ensuring greater liquidity and flexibility.
In contrast, ICICI Pru Smart Kid Assure Plan delivers lower returns and locks in your funds, making it a less efficient vehicle for securing your child’s financial future.
Final Verdict on ICICI Pru Smart Kid Assure Plan
The ICICI Pru Smart Kid Assure Plan allows you to invest in market-linked instruments. While such investments are typically expected to offer returns that justify the risk, a closer examination of this plan shows that high charges of ULIPs significantly erode the potential returns.
As a result, this plan may fall short in building the corpus needed for your child’s future goals. In the unfortunate event of the policyholder’s death, the plan continues through a waiver of future premiums, and an optional annual income is available.
However, a substantial portion of your premium goes toward funding these benefits, and it also has a high agent commission, leaving only a limited amount for actual investment. This structure may not effectively support your child’s educational milestones.
A more efficient approach would be to opt for a pure term life insurance policy with an adequate sum assured. Term plans are highly cost-effective and provide strong financial protection for your family during unforeseen events.
To truly secure your child’s future, it’s essential to build a diversified investment portfolio that aligns with your risk tolerance and time horizon.
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If you’re unsure how to start, consider working with a Certified Financial Planner (CFP) who can help you design a goal-oriented investment strategy tailored to your needs.
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