ICICI PRU Guaranteed Wealth Protector – Review, Features and Benefits

ICICI Pru Guaranteed Wealth Protector is a unit-linked non-participating individual life insurance plan that offers the potential for high returns, by investing a portion of your money in equity, while also providing the dual assurances of capital guarantee and life cover.

Your funds will be managed using the Guaranteed Wealth Protector Strategy. Under this strategy, your money will be allocated to an equity-oriented fund and a debt-oriented fund. At the start of the policy, a higher portion of your money will be invested in the equity-oriented fund. Over time the allocation to the debt-oriented fund will be increased in order to manage the guarantee.

The allocation between the equity-oriented fund and the debt-oriented fund will be rebalanced periodically throughout the policy term. This regular re-allocation will, in turn, determine the returns generated under the policy.

ICICI Pru Guaranteed Wealth Protector Policy

Features of this Policy –

  • Protect your savings from market downturns through an Assured Benefit
  • Pay premium just once or for a limited period of 5 or 7 years
  • Get rewarded with Loyalty Additions and Wealth Booster
  • No loans allowed against this policy

2 Funds Option in this Policy –

2 fund option of the policy

Benefits of this Policy –

a) Death Benefit –

In the unfortunate event of the death of the Life Assured during the term of the policy, provided the money is not in DP Fund, the following will be payable –

Death Benefit = A or B or C, whichever is highest

Where,

  • A = Sum Assured
  • B = Minimum Death Benefit
  • C = Fund Value

The Minimum Death Benefit is 105% of the total premiums received up to the date of death.

b) Maturity Benefit –

On maturity, the insured will receive A or B, whichever is higher –

Where,

  • A = Fund Value including Loyalty Additions and Wealth Booster
  • B = Assured Benefit

Assured Benefit for the policy will be as follows –

  • In the case of One Pay, 101% of the Single Premium
  • In the case of Five Pay & Seven Pay, 101% of the sum of all premiums paid

Assured Benefit is applicable only to the maturity of the policy and does not apply to death or surrender.

c) Loyalty Addition –

Loyalty Additions will be allocated as extra units at the end of every policy year, starting from the end of the sixth policy year, provided the money is not in the DP Fund.

Each Loyalty Addition will be equal to 0.25% of the average of the Fund Values on the last business day of the last eight policy quarter loyalty additions will be allocated among the funds in the same proportion as the value of total units held in each fund at the time of allocation. The allocation of Loyalty Addition units is guaranteed and shall not be revoked by the Company under any circumstances

d) Wealth Booster –

A Wealth Booster will be allocated as extra units at the end of the tenth policy year. Wealth Booster will be allocated between the funds in the same proportion as the value of total units held in each fund at the time of allocation. The allocation of Wealth Booster units is guaranteed and shall not be revoked by the Company under any circumstances.

Wealth Booster will be a percentage of the average of Fund on the last business day of the last eight policy quarters as shown in the table below.

Wealth Booster of this policy

e) Increase or decrease in Sum Assured –

For the One Pay option, increase or decrease in Sum Assured is not allowed.

For the Five Pay option and Seven Pay options, increase or decrease in Sum Assured is allowed, subject to underwriting, provided the age of the Life Assured when purchasing the policy is between 45 and 54 years last birthday.

An increase or decrease in Sum Assured will be allowed only on policy anniversaries, provided all due premiums till date have been paid. Increase in Sum Assured will be from 7 times the Annual Premium to 10 times the Annual Premium. An increase in Sum Assured will be allowed until the policy anniversary where the Life Assured attains age 60 years last birthday.

The cost of any medical reports and charges will be borne by the Policyholder and will be deducted by the redemption of units. Decrease in Sum Assured will be from 10 times the Annual Premium to 7 times the Annual Premium. Once the Policyholder has opted for a decrease in Sum Assured, any subsequent increase may be subject to underwriting.

f) Surrender Benefit –

During the first five policy years, on receipt of intimation that the insured wishes to surrender the policy, the Fund Value after deduction of applicable Discontinuance Charge, shall be transferred to the Discontinued Policy Fund (DP Fund).

For treatment thereafter, it is advised to the insured to please refer to the sections on Treatment of the policy while monies are in the DP Fund and policy revival. If the policy is not revived, you or your nominee, as the case may be, will be entitled to receive an amount not less than the Fund Value which was transferred to the DP Fund, on the earlier of death and the expiry of the lock-in period.

Currently the lock-in period is five years from policy inception. On surrender after completion of the fifth policy year, the insured will be entitled to the Fund Value. No Assured benefit will be applicable on surrendering the policy. No surrender penalty will be levied and policy surrender will extinguish all rights, benefits and interests under the policy.

Eligibility Conditions of this Policy –

Eligibility Criteria of ICICI Pru Guaranteed Wealth Protector Plan

Treatment of policy when money is in DP Fund –

While money is in the DP Fund –

  • A Fund Management Charge of 0.50% p.a. of the DP Fund will be made. No other charges will apply.
  • From the date, money enters the DP Fund till the date they leave the DP Fund, a minimum guaranteed interest rate declared by IRDAI from time to time will apply. The current minimum guaranteed interest rate applicable to the DP Fund is 4% p.a.
  • A revival period of three years from the date of the first unpaid premium of the policy applies.

If the three year revival period is complete before the end of the fifth policy year and the policy has not been revived, the insured will be entitled to the DP Fund Value at the end of the fifth policy year.

When can I revive my policy?

In case of surrender during the first 5 policy years or premium discontinuance during the first five policy years, you can revive the policy by paying overdue premiums within three years from the date of first unpaid premium.

On revival, Discontinuance Charge previously deducted will be added to the DP Fund Value and Policy Administration Charge and Premium Allocation Charge, which were not collected while money was in the DP Fund, shall be levied. The money will be invested in the funds in the same proportion as on the Date of Discontinuance, at the NAV as on the date of such revival.

Is there any grace period in the policy?

There is a grace period for payment of premium of 15 days for monthly mode of premium payment and 30 days for other modes of premium payment.

How does a mix of equity and debt beat inflation?

Inflation is the rate at which the price of goods and services increases over a period of time. For example, the price of a particular item has increased from Rs 100 in 2005 to Rs 243 in 2017.

To gain from your investments, your savings should grow at a rate higher than the inflation rate.

In order to get better returns in the long run, it is advisable to have equity exposure. Equity markets are subject to short-term market volatility. However, the effect of market volatility is negligible in the long term.

Below is an example of how investing in a mix of equity and debt can help in building your savings,

If 60% of your money was invested in the equity market and 40% in the debt market in the last 12 years, your investment would have grown by around 12% on an annualized basis. This growth would have helped you stay ahead of the inflation rate of about 7.7% in the same period.

How much Assured Benefit will I get?

In case your Fund Value at maturity is less than the sum of premiums paid by you, the Assured Benefit feature ensures that you receive 101% of all the premiums paid at the time of maturity. As a result, your money is protected as the company returns your invested money regardless of market ups and downs.

For example, if you invest Rs 1,00,000 every year for 5 years, the company guarantees to return a minimum sum of Rs 5,05,000.

How much money will my loved ones receive in my absence?

Your family will receive an amount that is the higher of the following –

  • A fixed amount also called the Sum Assured
  • Minimum Life Cover equal to 105% of the total premiums received up to the date of death
  • Fund Value that is the total value of the money that is invested in a fund of your choice

Can I cancel the policy if I didn’t like its terms and conditions?

If the insured is not satisfied with the terms and conditions of this policy, then the insured can return the policy to the company within 15 days from the date you received the policy and 30 days if your policy is purchased through distance marketing. This period is known as the Free Look Period.

On cancellation of the policy during free look period, the insured shall be entitled to an amount which shall be equal to non-allocated premium plus charges levied by cancellation of units plus Fund Value at the date of cancellation less stamp duty expenses paid under the policy and expenses borne by the Company on medical examination, if any.

The policy will terminate on payment of this amount and all rights, benefits, and interests under this policy will stand extinguished.

Are there any Tax benefits under this policy?

Yes, tax benefits on premium paid under Sec.10 (10D) and Sec. 80C of the Income Tax Act, 1961 is allowed in this policy.

How will your money be invested?

Your money will be invested according to the Guaranteed Wealth Protector Strategy. Your premium will be allocated to the Life Growth Fund and Life Secure Fund in the proportions set out below. Your Fund Value will also be re-balanced to achieve these proportions once every policy quarter.

a) For One Pay and Five Pay –

Detailed description of One Pay and Five Pay of the policy

b) For Seven Pay –

Detailed description of Seven Pay of the policy

What is the value of Wealth Boosters that I will get? Is this a guaranteed feature of this policy?

At the end of the tenth policy year, Wealth Booster addition will be equal to 3.25% of the Fund Value average for the Five pay and Seven pay option and 1.5% for the One Pay option. Yes, the allocation of wealth booster units is a guaranteed feature of the policy.

Charges under the Policy –

a) Premium Allocation Charge –

Premium Allocation Charge depends on the Premium Payment Option and the premium payment mode chosen. It is deducted from the premium amount at the time of premium payment and units are allocated in the funds thereafter. This charge is expressed as a percentage of premium.

  • One Pay – 3% A discount of 0.5% in the premium allocation charge is given to customers who buy directly from the Company’s website.
  • Five Pay and Seven Pay –

premium allocation charge of the policy

b) Policy Administration Charge

The policy administration charge will be levied every month by redemption of units, subject to a maximum of Rs 500 per month (Rs 6,000 p.a.). The policy administration charge will be as set out below –

  • One Pay – Rs 60 p.m. ( Rs 720 p.a.) for the first five policy years.
  • Five Pay and Seven Pay –

policy administration charges

c) Mortality Charges –

Mortality charges will be levied every month by the redemption of units based on your Sum at Risk at the time of calculation. The sum at risk at any point in time is the difference between the Death Benefit applicable at that time and the prevailing Fund Value of your policy. Indicative annual charges per thousand life cover for a healthy male and female life at a Sum Assured of Rs 10 lakh is as shown below –

Mortality Charges of the policy

Exclusion under the policy –

i) Suicide Exclusion –

If the Life Assured, whether sane or insane, commits suicide within 12 months from the date of commencement of the policy or from the date of policy revival, only the Fund Value is available on the date of intimation of death would be payable to the nominee.

Any charges other than Fund Management Charges and guarantee charges, if any, recovered subsequent to the date of death shall be added back to the fund value as available on the date of intimation of death.

If the Life Assured, whether sane or insane, commits suicide within 12 months from the effective date of any increase in the Sum Assured, then the amount of increase shall not be considered in the calculation of the Death Benefit.

Video Description of the Policy –

Conclusion –

So, by now you know each and every important detail about this policy. Do let me know if I have missed any important points in the comment section. Please feel free to ask any doubts regarding this policy.

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