Pramerica Life Smart Invest
Can the Pramerica Life Smart Invest Plan genuinely deliver both growth and protection — or will one always compromise the other?
Can the Pramerica Life Smart Invest Plan keep pace with inflation and changing markets — or will your expectations outpace the reality?
Is the Pramerica Life Smart Invest Plan the smart way to invest and insure — or just another ULIP box with glossy features?
Let’s find out by analysing its key features, benefits, and drawbacks. This review also includes detailed illustrations to help you understand it better.
What is the Pramerica Life Smart Invest Plan?
What are the features of the Pramerica Life Smart Invest Plan?
Who is eligible for the Pramerica Life Smart Invest Plan?
What are the benefits of the Pramerica Life Smart Invest Plan?
3. Return of Mortality Charges
What are the investment strategies and fund options in the Pramerica Life Smart Invest Plan?
What are the charges in the Pramerica Life Smart Invest Plan?
Grace Period, Discontinuance and Revival of the Pramerica Life Smart Invest Plan
Free Look Period for the Pramerica Life Smart Invest Plan?
Surrendering the Pramerica Life Smart Invest Plan
What are the advantages of the Pramerica Life Smart Invest Plan?
What are the disadvantages of the Pramerica Life Smart Invest Plan?
Research Methodology of Pramerica Life Smart Invest Plan
Benefit Illustration – IRR Analysis of Pramerica Life Smart Invest Plan
Pramerica Life Smart Invest Plan Vs. Other Investments
Pramerica Life Smart Invest Plan Vs. Pure-term + PPF/Equity Mutual Fund
Final Verdict on Pramerica Life Smart Invest Plan
Pramerica Life Smart Invest Plan is a Unit-Linked Non-Participating Individual Savings Life Insurance Plan. Under this plan, you enjoy the benefit of life cover and secure your family’s future against the uncertainties of life. It offers market-linked returns and protection to your family.
For Wealth Builder and Legacy Builder:
The Death Benefit shall be the higher of
Where Sum Assured is a multiple of Annualised Premium/Single Premium chosen at the inception of the Pramerica Life Smart Invest Plan Policy
For Dream Builder:
The Death Benefit shall be
(For all Plan Options)
On survival of the Life Insured till the maturity date, the Fund Value, including Top-Up fund value, if any, shall be payable, and the Pramerica Life Smart Invest Plan policy shall terminate.
For Wealth Builder and Dream Builder
On Survival of the Life Insured till the end of the Policy Term, an amount equal to the total of all the Mortality Charges deducted during the Pramerica Life Smart Invest Plan Policy Term (including mortality charge deducted on Top-up Sum Assured as applicable) will be added to the total Fund Value (Base Fund value plus Top Up Fund value) at the Maturity Date.
For Legacy Builder
Total cumulative amount of mortality charges deducted till age 70 years will be added to the fund value at the end of the Policy Year (including mortality charge deducted on top-up Sum Assured as applicable), coinciding or immediately following the 70th birthday of the Life Insured.
At inception, the Policyholder can choose one of the following investment strategies:
Under this option, you can choose to invest in any of the funds available (except the discontinuance fund or Liquid Fund) in proportion to your choice.
Within the Defined Portfolio strategy, you also have the option to select the Systematic Transfer Plan (STP) option, for which the Liquid Fund will be made available to you. You can switch money among these funds using the switch option.
You can choose from six funds to invest your money. If you opt for more than one fund, the minimum investment in any fund should be at least 1% of the Annual Premium. The funds and fund objectives are as follows:
| S.no | Fund Name | Asset Allocation | Risk Profile | ||
| Equity & Equity-related instruments | Govt. Securities & Corp. Bonds | Money market instruments | |||
| 1 | Debt fund | 0% | 50-100% | 0-40% | Low |
| 2 | Balance Equilibrium Fund | 65-75% | 25-35% | 25-35% | Medium |
| 3 | Growth Momentum fund | 75-85% | 15-25% | 15-25% | High |
| 4 | Large-cap advantage fund | 85-100% | 0-15% | 0-15% | High |
| 5 | Flexi Cap Opportunities Fund | 85-100% | 0-15% | 0-15% | High |
| 6 | Pramerica Nifty Mid Cap 50 Correlation Fund | 90-100% | 0-10% | 0-10% | High |
| Liquid fund | 0% | 0% | 100% | Low | |
| Discontinued policy fund | 0% | 60-100% | 0-40% | Low | |
Systematic Transfer Plan (STP)
With STP, you can invest a specific amount at monthly intervals, which gives you the advantage of Rupee Cost Averaging.
You can buy more units when markets are down and fewer units when markets are up, thereby reducing the average unit purchase cost. You can choose STP only for 12 months; an option would be available to policies wherein the premium is to be paid annually.
The Pramerica Life Smart Invest Plan offers a life-stage-based investment strategy wherein the investments are distributed between the Large Cap Advantage Fund and the Debt Fund, with their proportions varying as per the different life stages.
At inception, the funds will be distributed between two funds, the Large Cap Advantage Fund & Debt Fund.
As and when the next milestone is achieved, the funds will be redistributed according to the attained age (age bands) as given in the following table:
| Age as on the last birthday and the last policy anniversary | Debt fund | Large-cap advantage fund |
| Up to 25 | 15% | 85% |
| 26 – 30 | 20% | 80% |
| 31 – 35 | 25% | 75% |
| 36 – 40 | 30% | 70% |
| 41 – 45 | 35% | 65% |
| 46 – 50 | 40% | 60% |
| 51 – 55 | 45% | 55% |
| 56 and above | 50% | 50% |
There are no allocation charges in this product.
There are no Policy Administration charges in this product.
A Mortality charge will apply to the sum at risk. It will be deducted monthly by cancellation of units from the unit account.
This Charge is deducted by cancellation of Units from the Unit Account at the applicable Unit Price at the beginning of each Policy Month.
This Charge is deducted by cancellation of Units from the Unit Account at the applicable Unit Price at the beginning of each Policy Month.
| S.no | Fund Name | Fund Management Charges (FMC) per annum |
| 1 | Debt fund | 1.20% |
| 2 | Balance Equilibrium Fund | 1.35% |
| 3 | Growth Momentum fund | 1.35% |
| 4 | Large-cap advantage fund | 1.35% |
| 5 | Flexi Cap Opportunities Fund | 1.35% |
| 6 | Pramerica Nifty Mid Cap 50 Correlation Fund | 1.25% |
| 7 | Liquid fund | 1.20% |
| 8 | Discontinued policy fund | 0.50% |
There are no Discontinuance charges in this product.
Inference from the charges: These charges apply throughout the Pramerica Life Smart Invest Plan policy term, reducing the portion of your premium that actually gets invested.
Over time, this diminishes your overall returns, making a significant impact on your long-term wealth accumulation.
For other than Single Premium Policies
You will have a grace period of 30 days in case of non-monthly mode policies and a grace period of 15 days in case of monthly mode policies from the due date to pay the Premium.
Discontinued during the first five Policy years (Lock-in Period): the fund value, after deducting the applicable discontinuance charges, shall be credited to the Discontinued Policy Fund, and the risk cover and rider cover, if any, shall cease.
The proceeds of the discontinuance fund shall be paid to the Policyholder at the end of the revival period or lock-in period, whichever is later.
Discontinued after the first five Policy years: the policy shall be converted into a reduced paid-up policy with the paid-up sum assured, i.e. original sum assured multiplied by a ratio of “total period for which premiums have already been paid” to the “maximum period for which premiums were originally payable” as per the terms and conditions of the policy.
You have the option to revive your discontinued policy within three years from the date of the first unpaid premium.
You will have a period of 30 days from the date of receipt of the Policy document to review the terms and conditions of the Pramerica Life Smart Invest Plan Policy, and if you disagree with any of these terms and conditions, you have the option to return the Policy.
For Single Premium Policies
You have the option to surrender the Pramerica Life Smart Invest Plan policy anytime. Upon the receipt of a request for surrender, the fund value as on the date of surrender shall be payable.
For other than Single Premium Policies
Surrender during the first five Policy years (Lock-in Period): the Policyholder have an option to surrender the policy anytime, and proceeds of the discontinued policy shall be payable at the end of the lock-in period or date of surrender, whichever is later.
Surrender after the first five Policy years: the Policyholder have the option to surrender the policy anytime, and proceeds of the policy fund shall be payable.
Under the Pramerica Life Smart Invest Plan, you can pay premiums either for a limited period, throughout the Pramerica Life Smart Invest Plan policy term, or as a single lump-sum payment.
At the end of the policy term, the fund value, along with the return of mortality charges, is payable.
To evaluate how this plan performs compared to other investment options, let’s analyse it in percentage terms using the Internal Rate of Return (IRR) based on the benefit illustration from the official brochure.
A 35-year-old male invests in the Pramerica Life Smart Invest Plan with a sum assured of ₹10 lakhs, a policy term of 20 years, and a premium payment term of 10 years, paying ₹1,00,000 annually under the Wealth Builder option.
| Male | 35 years |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
At maturity, the accumulated fund value is paid out. The brochure assumes projected returns of 4% and 8%, but it’s important to note that these are illustrative figures, not guaranteed outcomes — the actual maturity amount will depend on fund performance.
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 36 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 37 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 38 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 39 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 40 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 41 | 7 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 42 | 8 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 43 | 9 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 44 | 10 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 45 | 11 | 0 | 10,00,000 | 0 | 10,00,000 |
| 46 | 12 | 0 | 10,00,000 | 0 | 10,00,000 |
| 47 | 13 | 0 | 10,00,000 | 0 | 10,00,000 |
| 48 | 14 | 0 | 10,00,000 | 0 | 10,00,000 |
| 49 | 15 | 0 | 10,00,000 | 0 | 10,00,000 |
| 50 | 16 | 0 | 10,00,000 | 0 | 10,00,000 |
| 51 | 17 | 0 | 10,00,000 | 0 | 10,00,000 |
| 52 | 18 | 0 | 10,00,000 | 0 | 10,00,000 |
| 53 | 19 | 0 | 10,00,000 | 0 | 10,00,000 |
| 54 | 20 | 0 | 10,00,000 | 0 | 10,00,000 |
| 55 | 14,43,066 | 26,19,962 | |||
| IRR | 2.38% | 6.31% |
At 4% return, the estimated fund value is ₹14.43 lakhs, resulting in an IRR of 2.38% as per the Pramerica Life Smart Invest Plan maturity calculator— which is lower than a regular savings account.
At 8% return, the estimated fund value is ₹26.19 lakhs, yielding an IRR of 6.31% as per the Pramerica Life Smart Invest Plan maturity calculator— comparable to or slightly lower than debt instruments.
These figures indicate subpar returns for a long-term, market-linked investment. Despite carrying investment risks, the plan fails to deliver inflation-beating returns.
Moreover, the sum assured of ₹10 lakhs is inadequate to protect a family’s financial future.
The Pramerica Life Smart Invest Plan underperforms on both fronts — investment growth and insurance coverage. It neither offers competitive returns nor sufficient protection, making it an ineffective choice for long-term financial planning.
The analysis shows that the Pramerica Life Smart Invest Plan fails to generate returns that outpace inflation.
Over the long term, inflation increases the cost of future financial goals, meaning the corpus accumulated through this plan may not be sufficient to keep up with rising expenses.
To illustrate a better approach, let’s explore two alternative scenarios using the same parameters from the earlier example, where a larger and more meaningful corpus can be achieved.
For life cover, a pure-term insurance policy with a sum assured of ₹10 lakhs costs around ₹7,500 per year for a 20-year term and 10-year premium payment period.
In contrast, the Pramerica Life Smart Invest Plan requires an annual premium of ₹1,00,000. By opting for a term plan, you save ₹92,500 per year, which can be invested separately for wealth creation.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 7,500 |
| Investment | ₹ 92,500 |
Depending on your risk appetite, the remaining amount can be invested in:
Public Provident Fund (PPF) – for risk-averse investors
Equity Mutual Fund – for risk-tolerant investors
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 35 | 1 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 36 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 37 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 38 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 39 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 40 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 41 | 7 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 42 | 8 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 43 | 9 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 44 | 10 | -97,500 | 10,00,000 | -1,00,000 | 10,00,000 |
| 45 | 11 | -500 | 10,00,000 | 0 | 10,00,000 |
| 46 | 12 | -500 | 10,00,000 | 0 | 10,00,000 |
| 47 | 13 | -500 | 10,00,000 | 0 | 10,00,000 |
| 48 | 14 | -500 | 10,00,000 | 0 | 10,00,000 |
| 49 | 15 | -500 | 10,00,000 | 0 | 10,00,000 |
| 50 | 16 | 0 | 10,00,000 | 0 | 10,00,000 |
| 51 | 17 | 0 | 10,00,000 | 0 | 10,00,000 |
| 52 | 18 | 0 | 10,00,000 | 0 | 10,00,000 |
| 53 | 19 | 0 | 10,00,000 | 0 | 10,00,000 |
| 54 | 20 | 0 | 10,00,000 | 0 | 10,00,000 |
| 55 | 27,29,733 | 50,72,011 | |||
| IRR | 6.58% | 10.74% |
PPF Investment (Low Risk)
Assuming a 10-year contribution period and adjustments in later years to meet the 15-year minimum lock-in, the maturity value works out to ₹27.29 lakhs, with an IRR of 6.58%.
This return exceeds even the 8% projected scenario of the Pramerica Life Smart Invest Plan — despite PPF being a low-risk debt instrument.
Equity Mutual Fund Investment (High Risk)
Investing the surplus in an equity mutual fund generates a pre-tax maturity value of ₹56.46 lakhs.
After accounting for capital gains tax, the post-tax maturity value stands at ₹50.72 lakhs, with a post-tax IRR of 10.74%.
These returns comfortably beat inflation, helping you build a substantial corpus for your long-term financial goals.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 20 years | 56,46,584 |
| Purchase price | 9,25,000 |
| Long-Term Capital Gains | 47,21,584 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 45,96,584 |
| Tax paid on LTCG | 5,74,573 |
| Maturity value after tax | 50,72,011 |
The Pramerica Life Smart Invest Plan is inefficient in generating inflation-adjusted returns or building an adequate corpus for future goals.
A combination of a pure-term insurance plan for protection and targeted investments like PPF or equity mutual funds for growth proves to be a far more effective strategy — ensuring both financial security and wealth creation.
The Pramerica Life Smart Invest Plan allows you to invest your surplus or savings in market-linked funds and comes with three plan variants:
While all three variants offer market-linked investment opportunities, the returns fail to justify the risks, mainly due to the plan’s high charges.
Moreover, the sum assured may not be sufficient to meet a family’s long-term financial needs, making the plan ineffective for sustainable wealth creation.
Overall, the Pramerica Life Smart Invest Plan is not a suitable choice for long-term wealth accumulation and it also has a high agent commission.
Combining life insurance with market-linked investments is rarely an efficient strategy.
As discussed earlier, opting for a pure-term life insurance policy for protection and investing separately for wealth creation is a more effective approach to achieving life goals.
Building a diversified investment portfolio across asset classes helps you better navigate market fluctuations and inflation.
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