Pramerica Life Wealth+ Ace Plan: Good or Bad? An Insightful ULIP Review
Is the Pramerica Life Wealth+ Ace Plan truly the ace up your sleeve for long-term wealth creation, or just another overpromising ULIP?
Could the Pramerica Life Wealth+ Ace Plan be your shortcut to financial growth, or will it fall short of your expectations?
Could the Pramerica Life Wealth+ Ace Plan be the wealth accelerator your portfolio needs, or will it slow you down in the long run?
This review explores the plan’s features, benefits, and drawbacks to help you make an informed decision.
What is the Pramerica Life Wealth+ Ace?
What are the features of the Pramerica Life Wealth+ Ace?
Who is eligible for the Pramerica Life Wealth+ Ace?
What are the benefits of the Pramerica Life Wealth+ Ace?
What are the investment strategies and fund options in the Pramerica Life Wealth+ Ace?
What are the charges in the Pramerica Life Wealth+ Ace?
Free Look Period for the Pramerica Life Wealth+ Ace
Surrendering the Pramerica Life Wealth+ Ace
What are the advantages of the Pramerica Life Wealth+ Ace?
What are the disadvantages of the Pramerica Life Wealth+ Ace?
Research Methodology of Pramerica Life Wealth+ Ace
Benefit Illustration – IRR Analysis of Pramerica Life Wealth+ Ace
Pramerica Life Wealth+ Ace Vs. Other Investments
Pramerica Life Wealth+ Ace Vs. Pure-term + Equity Mutual Fund
Final Verdict on the Pramerica Life Wealth+ Ace
Pramerica Life Wealth+ Ace is a Unit Linked Non-Participating Individual Savings Life Insurance Plan. It’s a wealth-creation avenue that allows you to use any available lump sum amount in one go, in the best way possible.
You have a variety of wealth creation options from conservative to aggressive investment profiles.
| Minimum Age at Entry | 8 Years for Policy Term 10 Years |
| 3 Years for Policy Term 15 Years | |
| 90 Days for Policy Term 20 or 25 Years | |
| Maximum Age at Entry | 65 Years |
| Maximum Maturity Age | 75 Years |
| Policy Term | 10, 15, 20 or 25 Years |
| Premium Payment Term | Single Pay |
| Premium | Minimum Single Premium: ₹65,000 |
| Maximum Single Premium: Depends on Maximum Sum Assured, Subject to Board-Approved Underwriting Policy | |
| Sum Assured | Minimum: Age <50 1.25 X Single Premium |
| Minimum: Age >=50 1.25 X Single Premium | |
| Maximum: Subject to a maximum of ₹10 Crore |
On maturity, the fund value, including the value of persistency units, will become payable.
In the event of death, the Pramerica Life Wealth+ Ace Plan Policy pays the higher of,
Sum Assured will be reduced to the extent of partial withdrawals made in the last 2 years immediately preceding the date of death. The Pramerica Life Wealth+ Ace Plan policy will terminate on payment of the death benefit.
Persistency units as a percentage of the average fund value of the preceding 36 monthly anniversaries will be added to the Policyholder’s unit account at the end of every 5th Policy year, starting 10th policy anniversary until the end of the Pramerica Life Wealth+ Ace Plan policy term.
The persistency units will be as follows:
| Premium Band | From (₹) | To (₹) | Persistency Units |
| Band 1 | 65,000 | 1,99,000 | 1.50% |
| Band 2 | 2,00,000 | onwards | 2% |
You have an option to choose from nine funds to invest your money in. You can look at the investment objectives of each of our funds and match those with your investment goals, and then decide the proportion of money you would like to invest in each of them.
If you are opting for more than one fund, the minimum investment in any fund should be at least 10% of the Single Premium paid. 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 Fund | 10-50% | 0-50% | 0-40% | High |
| 3 | Growth Fund | 40-80% | 0-30% | 0-40% | High |
| 4 | Large-cap Equity fund | 60-100% | 0 | 0-40% | High |
| 5 | Balanced Equilibrium Fund | 65-75% | 25-35% | 25-35% | Medium |
| 6 | Growth Momentum fund | 75-85% | 15-25% | 15-25% | High |
| 7 | Large-cap advantage fund | 85-100% | 0-15% | 0-15% | High |
| 8 | Flexi Cap Opportunities Fund | 85-100% | 0-15% | 0-15% | High |
| 9 | 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.
i). Premium allocation charge
This will be deducted from the Single Premium amount at the time of Premium Payment before allocating the same to the unit account.
| Single Premium | Allocation Charge for Policy Term of 10 Years | Allocation Charge for Policy Terms of 15, 20 & 25 Years |
| Band 1 | 4% | 3.50% |
| Band 2 | 3% | 2.50% |
ii). Policy administration charge
At the beginning of each policy month, the company will deduct the following charges from the policyholder’s unit account by way of cancellation of units:
| Policy Year | Single Premium Amount | Policy Admin Charges (per month) |
| 1 to 3 | Band-1 Band-2 | Lower of 0.180% of Single Premium or ₹150 Lower of 0.075% of Single Premium or ₹150 |
| 4+ | Band-1 Band-2 | NIL NIL |
iii). Mortality charge
Mortality charge will be applied to the Sum at Risk. It will be deducted monthly by cancellation of units from the unit account. Indicative annual mortality charges per 1000 of sum at risk for a healthy male are as follows:
| Attained Age of Life Insured | 20 | 30 | 40 | 50 |
| Mortality charge | 1.27 | 1.46 | 2.69 | 6.92 |
iv). Fund management charge (FMC)
| S.no | Fund Name | Fund Management Charges (FMC) |
| 1 | Debt fund | 1.20% |
| 2 | Balance Fund | 1.35% |
| 3 | Growth Fund | 1.35% |
| 4 | Large-cap Equity fund | 1.35% |
| 5 | Balanced Equilibrium Fund | 1.35% |
| 6 | Growth Momentum fund | 1.35% |
| 7 | Large-cap advantage fund | 1.35% |
| 8 | Flexi Cap Opportunities Fund | 1.35% |
| 9 | Pramerica Nifty Mid Cap 50 Correlation Fund | 1.25% |
| Liquid Fund (in case of STP) | 1.20% | |
| Discontinued policy fund | 0.50% |
v). Discontinuance / Surrender Charge
It depends on the year of discontinuance and the premium amount. There is no discontinuance and surrender charge from the 5th policy year onwards.
vi). Other charges
Four switches in a policy year are free of cost. Any subsequent switches in the Pramerica Life Wealth+ Ace Plan policy year will be charged a fee of ₹250 per switch.
Inference from the charges: These charges place an additional burden on the investor. Unlike other equity-linked investment options that involve minimal or no such costs, these deductions gradually erode returns over time, thereby limiting the overall potential for wealth creation.
You will have a period of 30 days from the date of receipt of the Pramerica Life Wealth+ Ace Plan Policy document to review the terms and conditions of the Policy, and if you disagree with any of these terms and conditions, you have the option to return the Policy.
Before the Completion of the first 5 policy years (lock-in period): Upon receipt of a request for surrender, the fund value, after deducting the applicable discontinuance charges, shall be credited to the Discontinued Policy Fund.
The Pramerica Life Wealth+ Ace Plan policy shall continue to be invested in the discontinued policy fund, and the proceeds from the discontinuance fund shall be paid at the end of the lock-in period.
After the completion of 5 policy years: The Pramerica Life Wealth+ Ace Plan policyholder has an option to surrender the policy anytime. Upon receipt of a request for surrender, the fund value as on the date of surrender shall be payable.
In this section, let’s assess the Internal Rate of Return (IRR) for the Pramerica Life Wealth+ Ace Plan to evaluate its performance and compare it with other market-linked investment options.
The following calculation is based on the figures provided in the Pramerica Life Wealth+ Ace Plan policy brochure.
A 30-year-old male invests in the Pramerica Life Wealth+ Ace Policy with a policy term of 20 years, paying a single premium of ₹5,00,000. The sum assured under the plan is ₹6,25,000 (1.25 times the single premium).
| Male | 30 years |
| Sum Assured | ₹ 6,25,000 |
| Policy Term | 20 years |
| Premium Paying Term | Single Pay |
| Annualised Premium | ₹ 5,00,000 |
At maturity, he receives the fund value, which depends on market performance. The assumed return rates of 4% and 8% are merely illustrative and not guaranteed—they do not represent the upper or lower limits of potential returns.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 30 | 1 | -5,00,000 | 6,25,000 | -5,00,000 | 6,25,000 |
| 31 | 2 | 0 | 6,25,000 | 0 | 6,25,000 |
| 32 | 3 | 0 | 6,25,000 | 0 | 6,25,000 |
| 33 | 4 | 0 | 6,25,000 | 0 | 6,25,000 |
| 34 | 5 | 0 | 6,25,000 | 0 | 6,25,000 |
| 35 | 6 | 0 | 6,25,000 | 0 | 6,25,000 |
| 36 | 7 | 0 | 6,25,000 | 0 | 6,25,000 |
| 37 | 8 | 0 | 6,25,000 | 0 | 6,25,000 |
| 38 | 9 | 0 | 6,25,000 | 0 | 6,25,000 |
| 39 | 10 | 0 | 6,25,000 | 0 | 6,25,000 |
| 40 | 11 | 0 | 6,25,000 | 0 | 6,25,000 |
| 41 | 12 | 0 | 6,25,000 | 0 | 6,25,000 |
| 42 | 13 | 0 | 6,25,000 | 0 | 6,25,000 |
| 43 | 14 | 0 | 6,25,000 | 0 | 6,25,000 |
| 44 | 15 | 0 | 6,25,000 | 0 | 6,25,000 |
| 45 | 16 | 0 | 6,25,000 | 0 | 6,25,000 |
| 46 | 17 | 0 | 6,25,000 | 0 | 6,25,000 |
| 47 | 18 | 0 | 6,25,000 | 0 | 6,25,000 |
| 48 | 19 | 0 | 6,25,000 | 0 | 6,25,000 |
| 49 | 20 | 0 | 6,25,000 | 0 | 6,25,000 |
| 50 | 8,05,469 | 17,12,626 | |||
| IRR | 2.41% | 6.35% | |||
At 4% return: The fund value is ₹8.05 lakhs, resulting in an IRR of 2.41% as per the Pramerica Life Wealth+ Ace Plan maturity calculator. This reflects almost no real wealth creation, as the return barely keeps pace with inflation.
At 8% return: The fund value is ₹17.12 lakhs, giving an IRR of 6.35% as per the Pramerica Life Wealth+ Ace Plan maturity calculator. Even in this optimistic scenario, the return is comparable to or lower than that of debt instruments.
The IRR analysis clearly indicates that the Pramerica Life Wealth+ Ace Plan fails to deliver inflation-beating or meaningful real returns.
Investing your lump sum in this plan could restrict your wealth accumulation potential, as the returns do not justify long-term capital growth expectations.
Now, let’s compare the returns from the Pramerica Life Wealth+ Ace Plan with alternative investment options using the same assumptions as in the benefit illustration.
In the earlier example, the plan provided a life cover of ₹6.25 lakhs along with a market-linked investment component. Let’s replicate a similar scenario to evaluate its effectiveness.
A pure-term life insurance policy offering ₹6.50 lakhs coverage for 20 years can be purchased with a single premium of ₹31,300. This leaves ₹4.68 lakhs available for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 6,50,000 |
| Policy Term | 20 years |
| Premium Paying Term | Single Pay |
| Annualised Premium | ₹ 31,300 |
| Investment | ₹ 4,68,700 |
Depending on the investor’s risk appetite, this balance can be allocated to debt or equity instruments. For this comparison, let’s consider an equity mutual fund investment.
| Term insurance + Equity Mutual Fund | |||
| Age | Year | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 30 | 1 | -5,00,000 | 6,50,000 |
| 31 | 2 | 0 | 6,50,000 |
| 32 | 3 | 0 | 6,50,000 |
| 33 | 4 | 0 | 6,50,000 |
| 34 | 5 | 0 | 6,50,000 |
| 35 | 6 | 0 | 6,50,000 |
| 36 | 7 | 0 | 6,50,000 |
| 37 | 8 | 0 | 6,50,000 |
| 38 | 9 | 0 | 6,50,000 |
| 39 | 10 | 0 | 6,50,000 |
| 40 | 11 | 0 | 6,50,000 |
| 41 | 12 | 0 | 6,50,000 |
| 42 | 13 | 0 | 6,50,000 |
| 43 | 14 | 0 | 6,50,000 |
| 44 | 15 | 0 | 6,50,000 |
| 45 | 16 | 0 | 6,50,000 |
| 46 | 17 | 0 | 6,50,000 |
| 47 | 18 | 0 | 6,50,000 |
| 48 | 19 | 0 | 6,50,000 |
| 49 | 20 | 0 | 6,50,000 |
| 50 | 40,30,278 | ||
| IRR | 11.00% | ||
Assuming average market returns, the pre-tax maturity value of the equity mutual fund investment would be ₹45.21 lakhs. After factoring in capital gains tax, the net maturity value comes to approximately ₹40.30 lakhs, delivering a post-tax IRR of 11%.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 20 years | 45,21,218 |
| Purchase price | 4,68,700 |
| Long-Term Capital Gains | 40,52,518 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 39,27,518 |
| Tax paid on LTCG | 4,90,940 |
| Maturity value after tax | 40,30,278 |
This comparison clearly demonstrates that separating insurance and investment offers greater liquidity and superior returns. In contrast, the Pramerica Life Wealth+ Ace Plan lacks both liquidity and inflation-beating returns, making it a less efficient choice for long-term wealth creation.
Investing a lump sum in the market is the key selling point of the Pramerica Life Wealth+ Ace Plan.The fund value, along with persistency units, is payable to the Pramerica Life Wealth+ Ace Plan policyholder.
However, after analysing the returns, it becomes evident that this lump sum market-linked investment does not deliver higher returns, despite being positioned as a growth-oriented product and it also has a high agent commission.
The Pramerica Life Wealth+ Ace Plan falls short in supporting genuine wealth creation. Single-premium ULIPs like this one are inefficient for building long-term financial strength, primarily due to high charges and limited flexibility.
There are better alternatives available that offer lower costs, higher liquidity, and superior returns.
Having equity exposure in your portfolio is indeed vital for long-term wealth building. However, it’s wise to avoid ULIPs and instead choose investment products that match your risk profile and financial objectives.
For life insurance needs, a pure-term policy remains the most cost-effective solution, providing adequate protection while allowing you to invest the remaining funds more efficiently.
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Ultimately, selecting the right strategy is crucial to achieving your life goals. If the process seems overwhelming, consulting a Certified Financial Planner (CFP) can help.
Their guidance ensures that your investment and insurance choices are aligned with your financial goals, risk tolerance, and personal priorities.
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