ICICI Pru Guaranteed Savings Insurance Plan

POSTED BY hbs ON December 12, 2011 10:04 pm COMMENTS (25)

Hi,
I had taken three plans of “ICICI Pru Guaranteed Savings Insurance Plan” with a premium of 18k, 18k and 19.8K during last year december 2010

I was earlier told that the policy returns are non-taxable. I just believed that said fact but now I couldn’t find the same in any document. So, first doubt is whether that information is true ?

Now, the policies are due for renewal but I am in a dilemma to continue with the same or not.

I want advice whether to discontinue the same i.e. all of three of them or few among those. And rather invest money in some other way such as term + PPF or any other guranteed mode.

Also, I am aware that policy surrender would result in premium lapse. But here I want to take this devision during the early stage of policy, rather than repenting for years to come.

Please provide your insights on whether to continue with this policy or not.
Thanks!

Note: I am looking for some non-market linked mode of investment here.

25 replies on this article “ICICI Pru Guaranteed Savings Insurance Plan”

  1. Sundar says:

    I have gone through all the comments shared here. Let me share my review of this plan.

    My Sum Assured: 2,10,000
    Premium Term: 7 years [ 2011 to 2018 ]
    Policy Term: 15 years [ Matures at 2026 ]

    My yearly premium amount sums up to Rs. 30,576 [ For 7 years > 214,032 ]

    Now lets see the benefits:

    1. Sum Assured is paid – 210,000
    2. Guaranteed Regular Additions – so far its been hovering around 3.8 to 4.3 % – Assuming the same trend –
    I see i would receive 123,900 at the end of policy term.
    3. Maturity Benefit – Is declared as % of SA. Roughly 50% – 105,000

    Since this policy having been issued after April 1, 2012 , only if the annual premium is up to a maximum of 10% of Sum Assured its tax deductible. My SA & premiums do not meet this. Hence it attracts 2% TDS on maturity Amount.

    Now the total Maturity:
    210,000 + 123,900 + 105,000 = 438,900 – 2% TDS = 430,122

    Invested Amount: 214,032
    Return after 15 years: 430,122

    Annualized Return from Premium end date till Maturity date > 8 Years:

    = 100* ( 430,122 – 214,032 / 214,032 ) / 8 = 12.62 %

    I still feel its a good return and policy.

    Guys, please share your thoughts.

    1. Hey Sundar

      Sorry but the returns dont get calculated like this for a policy which has premiums paid each year .. You need to actually do a IRR or XIRR analysis which is pretty easy for anyone .

      I have shared how to do that in this video, just look at and find out what is the IRR for your policy , which the actual true indicator of returns

      https://www.jagoinvestor.com/2011/02/calculate-insurance-policies-returns-video.html
      Manish

      1. Sundar says:

        Hi Manish,

        Thanks for sharing that article. But as you have stated at the beginning of that video tutorial, its meant for insurance policies with annual premium. Hence IRR calculation for such policies is relevant. But in case of monthly cash outflows like in my scenario, i need to perform an additional step to arrive at the final IRR value.

        Because excel’s IRR function assumes that the cash flows are annual cash flows. Therefore, if we want to calculate IRR for monthly cash flows, we have to first calculate IRR for these cash flows using IRR function and then we need to annualize the result by using the factor [(1+IRR)^12]-1

        Step 1: Calculate IRR for my monthly cash outflows and return: 1.5%
        Step 2: Use [(1+IRR)^12]-1 to arrive at the actual IRR = 19.54%

        I tried to cross-check with XIRR it returned 19.33 in my case. This looks even a impressive number than my original calculation ๐Ÿ™‚

        Please share your thoughts.

        Regards,
        Sundar

        1. Assuming your did your XIRR properly ๐Ÿ™‚ , it surely looks great …

          Just make sure you are not taking any assumptions promised by the agent, and putting the real numbers as promised in the document you signed !

          1. Sundar says:

            Yes yes i left the excel function to do the calc. Its pretty straight forward as you had explained in the tutorial. With cash outflows signified with – sign and inflows with just the value. Re-checked it multiple times as i did not expect this number. ๐Ÿ™‚

            In fact i had inquired with ICICI pru about surrendering this plan, me having paid the premiums for more than 5 years. though my premium payment term end next year. But as clearly mentioned in the policy document and also explained to me by the support person that i will be entitled to a surrender value which is the higher of the Guaranteed Surrender Value (GSV) and Non Guaranteed Surrender Value (NGSV). The GSV=35% of Premiums paid – First Yearโ€™s Premium. The NGSV= Present Value of Paid Up Sum Assured, discounted at the Gross Redemption Yield at the Review Date immediately preceding the date of surrender, plus 2% per annum.

            When calculated, i found to be losing a huge chunk of the money i have already paid them up. I was super frustrated having caught up in this trap. Now with this calculation in front of me and just 21 more months of premium to be paid. let me be in peace.

            Though its always advisable to exit wrongly chosen endowment plans, it also has to do with the timing of this exit. Earlier the best. if not you end up paying hard-earned money to them which you are not gonna recover. So i advise everybody who is contemplating about surrendering this policy, shall do a detailed analysis of the current scenario and take action whichever is appropriate.

            1. Ok in that case you can be with the policy if your calculations tell you that you are getting good returns !

  2. Madanpalsingh says:

    I have already paid three premiums against policy no. 17762470 of ICICI Pru Guaranteed SIP since May, 2013 amounting to approx. Rs.20000.00 each and the next fourth is due on 21st May, 2016.

    I would like to know the current status of this policy, I mean to say if this policy carries good returns on maturity or should I stop depositing further premiums against this policy and when I will be able to get the proceeds against this policy for the three premiums already deposited.

    Awaiting to have a nice advice please.

    1. I suggest getting out of this policy~

  3. madan says:

    I have already paid three premiums against policy no. 17762470 of ICICI Pru Guaranteed SIP since May, 2013 amounting to approx. Rs.20000.00 each and the next fourth is due on 21st May, 2016.

    I request to kindly advise if I should continue with this policy or stop depositing further premiums. And if I do not deposit further premiums, what will be returns against this policy.

    Awaiting to have a nice advice.

    With regards,

    Madan Pal Singh

  4. UDAY says:

    Hi to all, I am also in same ship, I have paid 4 years premiums, now i want to know that if I will stop to pay the further premium and I don’t want to surrender the Policy so in this case what i will get at the maturity ( means after 15 years)
    Please suggest me that whether I have to surrender the policy or not.

    1. Hi UDAY

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information

      Manish

    2. balasubramanian says:

      dear vaikundamani,the manager blue chip corporation Madurai, I have taken icici prudencial policy in 2010.when you were at Madurai. as you promise i have regularly pay premium through ecs .If isurrender the policy How much money i will get.As you say i will getregular returns every month . Will you pl cllarify.

      1. balasubramanian says:

        I am aged 78 so i have to meet medical expences more so i could not further continue. pl. reply

  5. Vikrant says:

    I have GUARANTEED SAVING INSURANCE PLAN and i have invested 2539 per month and already completed 4 years. I have 3 more years to pay this premium and I have been told by agent that this amount will get after next 8 years. It means after I will complete my 15 years from the plan has been effective
    I just want to know can I withdraw whole amount which comes to 210000 once I completed my 7 successfull years
    Or do the deduct any amount from my policy

  6. gauravkhetan says:

    Hi,

    I fell into the trap of laid down by ICICI Prudential’s agents as they faked a lot of information and convinced me to invest in their “ICICI Pru Guaranteed Savings Insurance Planโ€ [Policy number 16736792]. I have already paid a total premium of more than Rs 90,000 over last 3 years and am completely stuck with the plan.

    The agents assured me that the returns that I would get from the policy will be much higher than a PPF. However, its only later that I realized that the actual return was much lower.

    Any future product from ICICI is a strict “NO” for me and neither will I encourage any of my family/friends to go for such policies. The penalty that they charge for discontinuing is so high that a middle-class person like me cannot afford to do so.

    I wish I had not believed the words of those ICICI prudential agents who just sold a policy to me to achieve their sales target and I ended up losing my hard-earned money. I cannot regain my trust in ICICI unless they return me my money.

    Regards,
    Gaurav Khetan

    1. Thanks for sharing it. I know you might feel I am unrealistic , but its equally your mistake to not understand where you are putting up your money . The agent is surely to blame who has not worked on your interest, but do you really think anyone would give this world has become so obsessed with money and pressures of life .

      You cant rely on anyone other than yourself when it comes to the area of money

      Manish

  7. ICICI Prudential says:

    Dear Mahesh,

    We are sorry to hear your concern. We request you to help us with your policy details to assist you .

    Alternatively, you may also post your concern along with your policy details on https://onlinelifeinsurance.iciciprulife.com/digital/ipru/GrievanceRedressal.htm?execution=e8s1
    Request you to quote the reference number 128996 whilst sharing the details. Post receipt of the requirement, our representative will get in touch with you within 48 hours.

    Regards,
    ICICI Prudential Life Insurance

  8. ashalanshu says:

    Dear Mahesh, w’d you like to amputate a finger today or an arm tomorrow? Choice rests with you.

    Thanks

    Ashal

  9. maheshmahatekar says:

    Hi All,
    I have also fall into this trap.
    I took ICICI Pru Guaranteed Savings Insurance Plan with premium of 60k per year.
    I have already paid 3 yrs premium. But after reading the blogs in JagoInvestor, I came to know that returns will be very low.
    I check with ICICI customer care, they told if I surrender this policy now I will get 60k only where I paid 1.80 lac in 3 years.
    So can you please suggest now should I surrender or continue till 7 yrs (after that I don’t need to pay further).

    Please note, I will lose huge amount of 1.3 lac if I surrender now.
    So please give me genuine advice.

    Thanks in advance.

  10. Pradeep Salian says:

    Thanks for the Reviews Dude, I got call, offering this bull shit plan. I clearly told after looking at reviews i will decide. The Executive was avoiding me to look into review, if i take now itself i will get Medical Insurance and some other benefits. But i clearly told that guy, that i don’t trust Marketing executives words. I lost some money in MAX Newyork life too. So im cautious now.

    Please guys Don’t go for any ULIP’s, even These Insurance Plans, As per my suggestion just have these things,

    1) Take one Group Medical Insurance covering whole family worth 5L above, dont expect some money back on this,
    2) Invest in SIP, or Mutual Fund (with some risk)
    3) Invest in PPF or Govt Bank FD
    4) Invest in Post Office RD.

    Don’t waste your money on these scraps

  11. Dear Hbs, a term plan + debt MF or Term plan + PPF ‘ll fetch higher return than this policy.

    Thanks

    Ashal

  12. Ramesh says:

    Bonus rates of 3.8-4.1% for last 1 year, when the short term funds are giving you 8-9%. Better not to say anything more.

    [RA percentage is guaranteed to be 50% of the annualised gross redemption yield (GRY) of the 10-year G-Sec. Why not get a proper GILT debt fund and get nearer to that GRY]. <---From the policy document.

  13. Abhishek says:

    Hi

    I would recommend you to lapse the policy.. though the Returns are not Taxable.. The return of this policy is linked to the 10 yr G sec rate but has very HIGH Expenses..

    PPF considering the 8.6% revision and a Term Plan should be taken.

    Regards
    Abhishek

    1. hbs says:

      One thing that I want to highlight that I have already paid ONE PREMIUM of 50K.
      It has total of seven premiums and out of which I have already paid one.

      So, now i have to decide to either put the rest 3L over six years (50K per yr premium) in this policy itself.
      Or put those 3L in another intrument and get better gains.

    2. himanshu says:

      Hi Abhishek ! Same here . I have also Taken GSIP during Feb,2012. I have already given premium of 50K and Unsure about conitinuing or surrendering. Kindly advise what should I do !!!

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