ICICI Pru Signature – Review, Features and Benefits

ICICI Pru Signature is a savings and protection oriented unit-linked insurance plan. Along with life cover to secure our family in case we are not around, this plan also offers flexible investment options to help us achieve our goals.

ICICI Pru Signature Policy

Features of this Policy –

  1. This policy is a Life Cover for the entire policy term so that our family is financially secured even in our absence.
  2. The entire premium without any deductions is invested in the funds of our choice.
  3. The policy will return the mortality charge and policy administration charges at maturity.
  4. The policyholder has a choice of 4 portfolio strategies and a wide range of funds across equity, balanced and debt to suit our investment needs.
  5. The policyholder enjoys the policy benefits till 99 years of age with the Whole Life option.
  6. This policy will give regular money at regular intervals to fund our different life goals with the Systematic Withdrawal Plan.
  7. The policyholder may receive a tax-free maturity amount under Sec 10(10D) and tax rebate on the premium paid under Sec 80 C.
  8. The policyholder is allowed to do unlimited free switches between the funds as many times for Fixed Portfolio Strategy.
  9. The policyholder can also get rewarded with Wealth Boosters at regular intervals by just staying invested in the plan.

4 Portfolio Strategies –

a) Target Asset Allocation Strategy –

This strategy enables policyholders to choose an asset allocation that is best suited to their risk appetite and maintains it throughout the policy term. The policyholder can allocate their premiums between any two funds available with this policy, in the proportion of their choice. Their portfolio will be rebalanced every quarter to ensure that this asset allocation is maintained.

b) Trigger Portfolio Strategy 2 –

The Trigger Portfolio Strategy 2 enables policyholder to take advantage of substantial equity market swings and invest in the principle of “buy low, sell high”. Under this strategy, their investments will initially be distributed between two funds Multi-Cap Growth Fund, an equity-oriented fund, and Income Fund, a debt-oriented fund in a 75%:25% proportion.

c) Lifecycle Based Portfolio Strategy 2 –

As an individual, our financial needs are not static and keeps changing with our life stage. It is, therefore, necessary that our policy adapts to our changing needs. This need is fulfilled by the Lifecycle based Portfolio Strategy 2.

d) Fixed Portfolio Strategy –

This strategy enables the policyholder to manage their investments actively. Under this strategy, they can choose to invest their money in any of the fund options in proportions of their choice.

Benefits of this Policy –

a) Return of Mortality Charges and Policy Administration Charges –

If all the due premiums have been paid, then the amount equal to the total of mortality charges and policy administration charges deducted in the policy will be added back to the fund value at maturity. This amount 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. Return of Mortality Charges and Policy Administration Charges is not applicable to the Whole Life option.

b) Wealth Booster –

The company will contribute to your wealth creation by allocating extra units to your policy at the end of every 5th policy year starting from the end of the 10th policy year till the end of your policy term. Each Wealth Booster will be equal to 3.25% of the average of the Fund Values including Top-up Fund Value, if any, on the last business day of the last eight policy quarters.

Wealth Boosters 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. Allocation of Wealth Boosters is guaranteed and shall not be revoked by the company under any circumstances.

c) 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 the Discontinued Policy (DP) fund, then the following will be payable to the Nominee, or in the absence of a Nominee, to the Legal heir.

  • Death Benefit = A or B or C whichever is Highest

where,

  • A = Sum Assured, including Top-up Sum Assured, if any
  • B = Minimum Death Benefit
  • C = Fund Value including the Top-up Fund Value, if any

Minimum Death Benefit will be 105% of the total premiums including Top-up premiums if any received up to the date of death,

d) Maturity Benefit –

On maturity of the policy, the policyholder will receive the Fund Value including the Top-up Fund Value, if any. The policyholder has the option to receive the Maturity Benefit either as a lump sum or as a structured payout using Settlement Option.

e) Partial Withdrawal Benefit –

This facility is designed to help and provide policyholders with liquidity so that if there is an immediate financial need then that can be met. The policyholder can avail this any time after the completion of five policy years, provided the money is not in the Discontinued Policy (DP) fund.

You can make an unlimited number of partial withdrawals as long as the total amount of partial withdrawals in a year does not exceed 20% of the Fund Value in a policy year. The partial withdrawals are free of cost.

The following conditions apply on partial withdrawals –

  • Partial withdrawals are allowed only after the first five policy years and on payment of all premiums for the first five policy years.
  • Partial withdrawals are allowed only if the Life Assured is at least 18 years of age.
  • For the purpose of partial withdrawals, the lock-in period for the Top-up premiums will be five years or any such limit prescribed by IRDAI from time to time.
  • Partial withdrawals will be made first from the Top-up Fund Value which has completed the lock-in period, as long as it supports the partial withdrawal, and then from the Fund Value built up from the base premium(s).
  • Partial withdrawal will be allowed until the Fund Value reaches two times of the annual premium.
  • The minimum value of each partial withdrawal is Rs 2,000.

Systematic Withdrawal Plan (SWP) –

Under the Partial Withdrawal facility, the policyholder can choose to opt for a Systematic Withdrawal Plan (SWP). This facility allows them to withdraw a pre-determined percentage of their fund value regularly. This can help them to meet specific needs such as a child’s education or money for day-to-day expenses during retirement.

  • Systematic Withdrawal Plan is allowed only after the first five policy years.
  • The payouts may be taken monthly, quarterly, half-yearly, or yearly, on a specified date, and are payable in advance. This specified date can be the 1st or 15th of a month. The first payout is made on the withdrawal start date specified by you.
  • This facility can be opted at policy inception or anytime during the policy term. You may modify or opt-out of the facility by notifying us.
  • All conditions applicable for partial withdrawals such as minimum and maximum withdrawal amount, age, etc. will be applicable for the Systematic Withdrawal Plan as well. Both SWP and partial withdrawal can be availed simultaneously.
  • For example, if you choose 6% p.a. of the fund value to be withdrawn yearly, then an amount equal to 6% of the fund value would be paid on the chosen date every year.

f) Settlement Option –

The policyholder has an option to receive the Maturity Benefit as a structured payout using the Settlement Option.

  • With this facility, you can opt to get payments on a yearly, half-yearly, quarterly or monthly (through ECS) basis, over a period of one to five years, post maturity.
  • The first payout of the settlement option will be made on the date of maturity.
  • At any time during the settlement period, you have the option to withdraw the entire Fund Value.
  • During the settlement period, the investment risk in the investment portfolio is borne by you.
  • Only the Fund Management Charge and mortality charge, if any, would be levied during the settlement period.
  • No ‘Return of Mortality Charges & Policy Administration Charges’ or Wealth Boosters will be added during this period.
  • You may avail the facility of switches as per the terms and conditions of the policy. Partial withdrawals and CIPS are not allowed during the settlement period.

In the event of the death of the Life Assured during the settlement period, Death Benefit payable to the nominee as a lump sum will be –

Death Benefit during the settlement period = A or B whichever is highest

Where,

  • A = Fund Value including Top-up Fund Value, if any
  • B = 105% of total premiums paid On payment of Death Benefit, the policy will terminate and all rights, benefits, and interests under the policy will be extinguished.

On payment of the last installment of the settlement option, the policy will terminate and all rights, benefits, and interests under the policy will be extinguished.

g) Unlimited Free Switches –

If the policyholder chooses the Fixed Portfolio strategy, then they can switch units from one fund to another depending on their financial priorities and investment outlook as many times as they want. This benefit is available to the policyholder without any charges. The minimum switch amount is Rs 2,000. Switches are not applicable to other portfolio strategies.

h) Premium Redirection –

This feature is applicable only if the policyholder has opted for the Fixed Portfolio Strategy and provided the money is not in the DP Fund. If the policyholder has selected Fixed Portfolio Strategy, at policy inception, the policyholder can specify the funds and the proportion in which the premiums are to be invested in the funds. At the time of payment of subsequent premiums, the split may be changed without any charge. This will not be counted as a switch.

i) Top Up –

The policyholder can invest any surplus money as Top-up premium, over and above the base premium(s), into the policy. The following conditions apply to Top-ups –

  • The minimum Top-up premium is Rs 2,000.
  • Your Sum Assured will increase by Top-up Sum Assured when you avail of a Top-up. Top-up Sum Assured will be based on the age of the life assured at the time of paying the Top-up premium.
  • Top-up premiums can be paid any time except during the last five years of the policy term, subject to underwriting, as long as all due premiums have been paid.
  • A lock-in period of five years would apply for each Top-up premium for the purpose of partial withdrawals only.
  • At any point during the term of the policy, the total Top-up premiums paid cannot exceed the sum of base premium(s) paid till that time.
  • The maximum number of top-ups allowed during the policy term is 99.

Eligibility Conditions of this Policy –

Parameters Criteria
  • Entry Age
  • Minimum entry age – 0 years
  • Maximum entry age – 60 years
  • Minimum and Maximum Policy Terms
  • 10 – 30 years. For Whole Life policy term option, policy term will be equal to 99 minus Age at entry
  • Age at Maturity
  • For policies other than Whole Life – Minimum maturity age is 18 years and Maximum maturity age is 75 years
  • For Whole Life option – Maturity age: 99 years
  • Minimum and Maximum Premium
  • For policies other than Whole Life – Rs. 30,000 p.a. – Unlimited
  • For Whole Life option – Rs. 60,000 p.a. – Unlimited

Charges under the Policy –

i) Policy Administration Charge –

Policy Administration Charge will be levied every month by the redemption of units at Rs 100 p.m. ( Rs 1,200 p.a.) throughout the policy term.

ii) Mortality Charges –

Mortality charges will be levied every month by the redemption of units based on the Sum at Risk.

The sum at Risk = Highest of the following –

  • Sum Assured, including Top-up Sum Assured, if any
  • Fund Value (including Top-up Fund Value, if any),
  • Minimum Death Benefit Less
  • Fund Value (including Top-up Fund Value, if any

iii) There is no premium allocation charge in the policy

FAQs –

a) When can I surrender my policy?

The policyholder can surrender the policy during the first five policy years, by intimating the company that you wish to surrender the policy. On intimation the Fund Value including Top-up Fund Value, if any, after deduction of applicable Discontinuance Charge, shall be transferred to the Discontinued Policy Fund (DP Fund).

The policyholder or their nominee, as the case may be, will be entitled to receive the Discontinued Policy Fund Value, on the earlier of death or 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 policyholder will be entitled to the Fund Value including Top-up Fund Value, if any.

b) When can I revive my lapsed policy?

The revival period is three years from the date of the first unpaid premium. In case of revival of the policy, In order to revive the policy, the policyholder has to pay all the due and unpaid premiums without charging any interest or fee. The policyholder will also have to pay policy administration charges and premium allocation charges as applicable during the discontinuance period.

c) What to do if I didn’t like the terms and conditions of the policy?

If the policyholder doesn’t like the terms and conditions of the policy, then the policy can be returned with 15 days from the purchase of the policy if the policy is purchased in person and within 30 days if the policy is purchased through distance marketing. The period is known a the Free Look Period.

On cancellation of the policy during the free-look period, the policyholder shall be entitled to an amount which shall be equal to Fund Value at the date of cancellation plus non-allocated premium plus charges levied by cancellation of units less proportionate risk premium for the period of cover, stamp duty expenses under the policy and expenses borne by the company on medical examination.

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

d) Is there any grace period in the policy?

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

e) Is there any possibility that whether I can change the portfolio strategy in my policy?

Yes, the policyholder can change their portfolio strategy up to four times in a policy year. This facility is provided free of cost. Any unutilized CIPS cannot be carried forward to the next policy year.

f) Is Increase or Decrease of Sum Assured allowed in the policy?

The policyholder can choose to increase or decrease their Sum Assured during the policy term provided all due premiums have been paid to date.

  • An increase or decrease in Sum Assured will not change the premium payable under the policy.
  • An increase in Sum Assured is allowed, subject to underwriting, before the policy anniversary on which the life assured is aged 60 years completed birthday.
  • A decrease in Sum Assured is allowed up to the minimum allowed under the policy.
  • Such increases or decreases would be subject to the maximum Sum Assured multiple limits. Any medical cost for this purpose would be borne by the policyholder and will be levied by the redemption of the unit.

g) Can the policyholder choose to decrease or increase the premium payment term by notifying the company?

Yes, the policyholder you can choose to increase or decrease the Premium Payment Term by notifying the Company provided all the due premium have been paid.

  • An Increase or Decrease in the Premium Payment Term is allowed subject to the Premium Payment Terms allowed under the policy.
  • An Increase or Decrease in the Premium Payment Term must always be in multiples of one year.

h) Can I increase the term of the policy by notifying the company?

Yes, the policyholder can choose to increase their policy term by notifying the Company.

  • An increase in terms is allowed subject to the Policy terms allowed under the policy.
  • An increase in policy term is allowed, subject to underwriting.
  • Decreasing the policy term is not allowed.

Exclusions under the Policy –

Suicide Clause –

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, including Top-up Fund Value, if any, as available on the date of intimation of death, would be payable to the Claimant or 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 the increase in Sum Assured, then the amount of increase shall not be considered in the calculation of the death benefit.

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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