Why is ICICI Pru Smart Life special?

Advantages of ICICI Pru Smart Life The premium waiver option is an inbuilt feature. Under a Fixed Portfolio Strategy, you have the option to switch between the available funds. You can invest any surplus money as a Top-up premium. You can change your portfolio strategy once every policy year. Partial withdrawals are allowed after the completion of five policy years. You can choose to decrease your Sum Assured at any policy anniversary. Decreasing your policy term is allowed.

An Insightful Review & Analysis of ICICI Pru Smart Life Plan.

Q: What are the benefits of ICICI Prudential?

ICICI Pru Smart Life Death Benefit Review The Death Benefit payable is split into two parts: • Lump Sum Benefit - A benefit paid out at the time of claim • Smart Benefit - A deferred benefit that ensures the policy continues uninterrupted. On subsequent premiums, and due dates units equivalent to the installment premium will be allocated by the company. The higher of the following is paid as a lump sum benefit: • Sum Assured • Minimum Death benefit (105% of total premiums paid). ICICI Pru Smart Life Maturity Benefit Review After the policy matures, the Fund Value including the Top-up Fund Value, if any will be available to you. The maturity benefit is paid irrespective of the survival of the life assured. ICICI Pru Smart Life Loyalty Additions and Wealth Booster Review • Loyalty Addition – It is 0.25% p.a. and it starts from the end of the 6th policy year. • Additional Loyalty Addition – 0.25% p.a. from the end of the 6th policy year provided the premium is paid for the respective year. • Wealth Boosters – One pay – 1.50%, Limited/Regular pay – 3.25% - For every 5 years from the end of the 10th policy year.

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Will this ICICI Pru Smart Life Plan help to fulfill all your responsibilities?

Will this ICICI Pru Smart Life Plan help shield your family in your unfortunate times?

The top priority of you would be is take care of your near and dear ones. For that, you need to plan, to fulfill the dreams of your family members.

In the meantime, the dreams of your family should not be jeopardized if anything unfortunate happens to you. By keeping these objectives in mind, ICICI Pru is offering a product called ICICI Pru Smart Life.

Will this plan help to shoulder your responsibilities?

This article dives deep into the features and workings of ICICI Pru Smart Life. The Research Methodology part of this Review Analysis will provide you with insights and help you in your final decision-making.

ICICI Pru Smart Life Plan Benefit illustration – IRR Analysis

13.) ICICI Pru Smart Life Plan VS Other Investment Products

ICICI Pru Smart Life Plan VS. Pure Term + PPF / ELSS
ICICI Pru Smart Life Plan VS ICICI Pru Smart Life Plan.
ICICI Pru Smart Life Plan VS ICICI Pru Guaranteed Pension Plan

14.) Final Verdict on ICICI Pru Smart Life Plan

1.) What is the ICICI Pru Smart Life Plan?

ICICI Pru Smart Life is a savings and protection-oriented Unit Linked, Life Individual Plan. This plan offers you a life insurance cover to protect your family even in your unfortunate absence.

You have access to multiple choices on how to save and accumulate funds toward your desired goals.

2.) What are the Features of the ICICI Pru Smart Life Plan?

Flexibility of premium payment – Single premium, Limited premium, or Regular premium payment option.
Loyalty Additions and Wealth Boosters are added to the fund value.
Option to choose the level of protection that suits your needs.
2 investment strategies and 18 fund options are available.
The policy continues even after the death of the policyholder; it continues till the end of the policy term.

3.) What is the Eligibility Criteria of ICICI Pru Smart Life Plan?

4.) What are the Benefits of ICICI Pru Smart Life Plan

i.) ICICI Pru Smart Life Plan Death Benefit Review

The Death Benefit payable is split into two parts:

Lump Sum Benefit – A benefit paid out at the time of claim
Smart Benefit – A deferred benefit that ensures the policy continues uninterrupted. On subsequent premiums, and due dates units equivalent to the installment premium will be allocated by the company.

The higher of the following is paid as a lump sum benefit:

Sum Assured
Minimum Death benefit (105% of total premiums paid).

ii.) ICICI Pru Smart Life Plan Maturity Benefit Review

After the policy matures, the Fund Value including the Top-up Fund Value, if any will be available to you. The maturity benefit is paid irrespective of the survival of the life assured.

iii.) ICICI Pru Smart Life Plan Loyalty Additions and Wealth Booster Review

Loyalty Addition – It is 0.25% p.a.and it starts from the end of the 6^th policy year.
Additional Loyalty Addition – 0.25% p.a. from the end of the 6^th policy year provided the premium is paid for the respective year.
Wealth Boosters – One pay – 1.50%, Limited/Regular pay – 3.25% – For every 5 years from the end of the 10^th policy year.

5.) Investment Strategies and Fund option under ICICI Pru Smart Life Plan

In ICICI Pru Smart Life, there is an option to choose from two following portfolio strategies:

Fixed Portfolio Strategy
Life Cycle-based Portfolio Strategy

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.

The asset allocation of each fund is given in the table below:

Fund Name	Asset Allocation			Risk Profile
Fund Name	Equity and Equity-related Securities	Debt	Money market and cash	Risk Profile
Opportunities Fund	80-100%	0-20%	0-20%	High
Multi Cap Growth Fund	80-100%	0-20%	0-20%	High
Blue-chip Fund	80-100%	0-20%	0-20%	High
Maximiser V	75-100%	0-25%	0-25%	High
Value Enhancer Fund	85-100%	0-15%	0-15%	High
Multi Cap Balanced Fund	0-60%	20-70%	0-50%	Moderate
Secure Opportunities Fund	0%	60-100%	0-40%	Low
Income Fund	0%	40-100%	0-60%	Low
Money Market Fund	0%	0-50%	50-100%	Low
Maximise India Fund	80-100%	0-20%	0-20%	High
Active Asset Allocation Balanced Fund	30-70%	30-70%	0-40%	Moderate
Focus 50 Fund	90-100%	0-10%	0-10%	High
India Growth	80-100%	0-20%	0-20%	High
Balanced Advantage Fund	65-90%	10-35%	0-35%	High
Sustainable Equity Fund	85-100%	0-15%	0-15%	High
Mid-Cap Fund	85-100%	0-15%	0-15%	High
Mid-Cap Hybrid Growth Fund	65-80%	20-35%	0-15%	High
Constant Maturity Fund	0%	75-100%	0-25%	Moderate

Under the Fixed Portfolio Strategy, you also have the choice to opt for Automatic Transfer Strategy (ATS) as well.

If this is chosen, you can save all or some part of your savings in a Secure Opportunities Fund, Money Market Fund, Income Fund, and/or Constant Maturity Fund and transfer a fixed amount in regular installments into one or more of the following funds:

Maximiser V, Multi Cap Growth Fund, Maximise India Fund, Blue-chip Fund, Value Enhancer Fund, Focus 50 Fund, India Growth Fund, Opportunities Fund, Balanced Advantage Fund, Sustainable Equity Fund, Mid Cap Fund, Mid Cap Index Fund or Hybrid Growth Fund.

ii.) Life Cycle-based Portfolio Strategy

India Growth Fund, Opportunities Fund, Balanced Advantage Fund, Sustainable Equity Fund, Blue-chip Fund, Maximiser V, Multi Cap Growth Fund, Maximise India Fund, Value Enhancer Fund, Focus 50 Fund,

At the commencement of the policy, your investment based on your age is distributed between two funds namely Multi Cap Growth Fund and Income Fund.

As you move on from one age category to another, your funds depending on your current age get reallocated automatically.

The age-wise portfolio distribution has been depicted in the following table.

Age of Policyholder (years)	Multi Cap Growth Fund	Income Fund
20-25	80%	20%
26-35	75%	25%
36-45	65%	35%
46-55	55%	45%
56-65	45%	55%

6.) Various Charges under ICICI Pru Smart Life Plan

i.) Premium Allocation Charge

It depends on the premium payment option and the premium payment mode chosen. 3% for single pay and 2.5% for regular/Limited pay.

ii.) Fund Management Fund

1.35% for all funds except the Money Market Fund. O.75% for Money Market Fund.

iii.) Policy Administration Charge

One Pay: ₹ 60 p.m. (₹ 720 p.a.) for the first five policy years

Limited/Regular Pay: 0.21% p.m. (2.52% p.a.) of Annual Premium, for the entire policy term

iv.) Mortality Charges

Mortality Charges calculated will be based on the Sum at Risk.

Age (years)	30	40	50	60
Male	1.8	3.12	6.93	17.45
Female	1.73	2.78	6.11	13.35

v.) Discontinuance Charges

It depends on the policy year in which you discontinue and the premium amount.

Inference from these charges – The plan deducts these charges before investing your premium. Some of these charges continue throughout the policy term.

Whereas in other Market- Linked Products, the charges are less and the investment procedure is so transparent. These hefty charges in ULIP will affect your return in the long run.

7.) ICICI Pru Smart Life Plan Grace Period, Discontinuance and Revival

i.) 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.

ii.) 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 then the risk cover if any, shall cease.

If you do choose to revive the policy, the money 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 policy will be converted into a reduced paid-up policy with a paid-up sum assured.

iii.) Revival

The revival period of this ICIC Pru Smart Life Plan starts from the date of the first unpaid premium.

8.) ICICI Pru Smart Life Plan Free Look Period

If you are not satisfied with the terms and conditions of this policy, you can return the Policy Document within 15 days from the date you received it.

If your policy is purchased through Distance marketing or 30 days from the date you received it, if your policy is an electronic policy or is purchased through Distance Marketing.

For further clarification regarding the terms and conditions, you can check out the ICICI Pru Smart Life Plan Policy Brochure.

9.) Surrendering ICICI Pru Smart Life Plan

During the first five policy years: the Fund Value including Top-up Fund Value, if any, after the applicable Discontinuance Charge is deducted, shall be re-directed 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)

Surrendering after the completion of the fifth policy year, you will be eligible to receive the Fund Value along with Top-up Fund Value, if any.

10.) Advantages of ICICI Pru Smart Life

The premium waiver option is an inbuilt feature.
Under a Fixed Portfolio Strategy, you have the option to switch between the available funds.
You can invest any surplus money as a Top-up premium.
You can change your portfolio strategy once every policy year.
Partial withdrawals are allowed after the completion of five policy years.
You can choose to decrease your Sum Assured at any policy anniversary.
Decreasing your policy term is allowed.

11.) Disadvantages of ICICI Pru Smart Life

The lock-in period is 5 years for surrendering or doing partial withdrawal
The plan doesn’t a provide loan.
The fund options are not unique, there is an overlapping of the fund’s investment strategy.

12.) ICICI Pru Smart Life Plan Research Methodology

We are now moving into an important segment which is the Internal Rate of Return calculation. Calculating the potential return of the plan should be done before choosing any investment product.

This will help you to compare with other investment returns. Most investors just look at the cash flow, i.e., what goes in and out of your pocket.

But, apart from cash flow, you need to look for potential returns from the investment. Let us calculate the internal rate of Return for the plan.

ICICI Pru Smart Life Plan Benefit illustration – IRR Analysis

A 35-year-old buys ICICI Pru Smart Life for a sum assured ₹ 15 Lakhs. The policy term and the premium paying term are 15 years. The annual premium here is ₹ 1 Lakh.

Male	35 years
Sum Assured	₹ 15 Lakh
Policy Term	15 years
Premium Paying Term	15 years
Annualised Premium	₹ 1 Lakh

The illustration shows two different rates of assumed future investment returns i.e., 4% p.a. and 8% p.a. These returns are not guaranteed and they are not the upper or lower limits of what you might get back, as the value of your policy depends on several factors including future investment performance.

Age	Year	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	15,00,000	-1,00,000	15,00,000
36	2	-1,00,000	15,00,000	-1,00,000	15,00,000
37	3	-1,00,000	15,00,000	-1,00,000	15,00,000
38	4	-1,00,000	15,00,000	-1,00,000	15,00,000
39	5	-1,00,000	15,00,000	-1,00,000	15,00,000
40	6	-1,00,000	15,00,000	-1,00,000	15,00,000
41	7	-1,00,000	15,00,000	-1,00,000	15,00,000
42	8	-1,00,000	15,00,000	-1,00,000	15,00,000
43	9	-1,00,000	15,00,000	-1,00,000	15,00,000
44	10	-1,00,000	15,00,000	-1,00,000	15,00,000
45	11	-1,00,000	15,00,000	-1,00,000	15,00,000
46	12	-1,00,000	15,00,000	-1,00,000	15,00,000
47	13	-1,00,000	15,00,000	-1,00,000	15,00,000
48	14	-1,00,000	15,00,000	-1,00,000	15,00,000
49	15	-1,00,000	15,00,000	-1,00,000	15,00,000
50		17,06,000	15,00,000	23,85,000	15,00,000

	IRR	1.59%		5.60%

The fund value at the 4% scenario is ₹ 17.06 Lakhs and the IRR under the 4% scenario works out to be 1.59%. The fund value at the 8% scenario is ₹ 23.85 Lakhs and the IRR under the 8% scenario works out to be 5.60%.

These returns are not on par with other market-related instruments. Any long-term investment should yield more than the inflation rate. Here in the CICI Pru Smart Life plan, the policy term is 15 years, but returns are not profitable. Even a Bank FD fetches you better returns which comes under the debt category.

13.) ICICI Pru Smart Life Plan VS Other Investment Products

This segment throws light on how you can channel the premium effectively in an alternate investment. To compare the returns, let us take into account the same metric as seen in the above illustration.

So, an annual investment of ₹ 1 lakh can be utilised for life cover and investment.

i.) ICICI Pru Smart Life Plan VS Pure Term + PPF / ELSS

Before investing for wealth accumulation, let us set aside an amount for life insurance coverage. A pure term life insurance policy for ₹ 15 Lakhs Sum Assured would cost ₹ 7,200 per annum.

This leaves you with ₹ 92,800 for investment. Either you can invest in a market-linked instrument or you can settle with a debt instrument. The choice could be based on your personal risk appetite.

Pure-Term Life Insurance Policy
Sum Assured	₹ 15 Lakh
Policy Term	15 years
Premium Paying Term	15 years
Annualised Premium	₹ 7,200
Investment	₹ 92,800

The final maturity value under PPF investment is ₹ 25.16 Lakhs. This is fully tax-free. The IRR for Pure term life insurance policy along with PPF investment results in 6.23%.

Under the ELSS fund, the redemption involves capital gains calculation. The capital gains calculation is given below. The pre-tax maturity value is ₹ 38.74 Lakhs.

The post-tax maturity value is ₹ 36.36 Lakhs. The IRR for pure term life insurance policy along with ELSS investment is 10.45% (post-tax return).

		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	15,00,000	-1,00,000	15,00,000
36	2	-1,00,000	15,00,000	-1,00,000	15,00,000
37	3	-1,00,000	15,00,000	-1,00,000	15,00,000
38	4	-1,00,000	15,00,000	-1,00,000	15,00,000
39	5	-1,00,000	15,00,000	-1,00,000	15,00,000
40	6	-1,00,000	15,00,000	-1,00,000	15,00,000
41	7	-1,00,000	15,00,000	-1,00,000	15,00,000
42	8	-1,00,000	15,00,000	-1,00,000	15,00,000
43	9	-1,00,000	15,00,000	-1,00,000	15,00,000
44	10	-1,00,000	15,00,000	-1,00,000	15,00,000
45	11	-1,00,000	15,00,000	-1,00,000	15,00,000
46	12	-1,00,000	15,00,000	-1,00,000	15,00,000
47	13	-1,00,000	15,00,000	-1,00,000	15,00,000
48	14	-1,00,000	15,00,000	-1,00,000	15,00,000
49	15	-1,00,000	15,00,000	-1,00,000	15,00,000
50		25,16,865	15,00,000	36,36,434	15,00,000

	IRR	6.23%		10.45%

Maturity value after 15 years	38,74,704
Purchase price	13,92,000
Long-Term Capital Gains	24,82,704
Exemption limit	1,00,000
Taxable LTCG	23,82,704
Tax paid on LTCG	2,38,270
Maturity value after tax	36,36,434

If you look at the IRR Analysis, you could infer that even a debt instrument (PPF) yields better than ICIC Pru Smart Life. Any investment should earn you a better risk-adjusted return.

ICICI Pru Smart Life doesn’t yield you an appropriate risk-adjusted return. This IRR analysis shows the importance of the returns calculation before making the investment decision.

ii) ICICI Pru Smart Life Plan VS ICICI Pru Smart Life Plan.

Knowing the basic details about this plan will help you decide whether this plan should be part of your core investment portfolio or not.

ICICI Pru Smart Plan offers life cover and opportunities to invest in market-linked investments. You can invest in lumpsum and allow your investment to grow.

If wish to know more about the other features, benefits, and advantages of the plan. You can refer to our article on: ICICI Pru 1 Wealth Plan: Good or Bad? An Insightful Review

iii) ICICI Pru Smart Life Plan VS ICICI Pru Guaranteed Pension Plan

Among these two investment options which could be more suited to your personal investment portfolio. To find out let’s first understand the plan.

This ICICI Pru Guaranteed Pension Plan offers you post-retirement income to help you take care of all your post-retirement expenses.

To enrich yourself more on the plan’s suitability and potential return of the plan. We would suggest you to read our blog post on: ICICI Pru Guaranteed Pension Plan Flexi-Review (2024): Should you buy this plan or not?

14.) Final Verdict on ICICI Pru Smart Life Plan

The ICICI Pru Smart Life Plan offers life cover during the policy term. And also ensures that the policy continues even after the death of the policyholder without any payment of future premium.

There are 19 fund options under this plan. If you look at the asset allocation and risk profile of each of the funds, there is a repetition. This may result in confusing investors.

Unlike the Mutual fund industry, there is no regulatory board to standardize the fund option for ULIPs. So there can also be a High Agent Commission involved in purchasing a ULIP Policy.

The potential return of the ICICI Pru Smart Life Plan is not good enough to combat inflation in the long run. Your investment plan may fail to fulfill your dreams if you invest in ICICI Pru Smart Life.

Get an adequate life cover through a Pure-Term Life Insurance Policy. They offer high coverage at an affordable premium. To achieve your dreams, always invest in a diversified portfolio. Anyone who has a solid financial plan can succeed.

As an investor, you should thoroughly analyse the investment product and make informed decisions.

It is always better to have a clear vision about your plans before you make an investment decision. To have a clear vision and purpose for your investments you might need to look beyond Social Media Platforms Quora, Facebook, Twitter, Etc.

If you need any guidance, then you can consult a Certified Financial planner. He will draft a solid financial plan based on your dreams, time horizon, and risk appetite.

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ICICI Pru Smart Life Plan: Good or Bad? A Comprehensive Analysis and Review