Introduction
ICICI Prudential is one of the leading insurance providers in India and it has launched a new product by name ICICI Prudential GIFT PRO. This is a protection and savings-oriented life insurance plan providing guaranteed benefits.
Insurance is a primary requirement for all individuals who have financial dependents. In an ideal world Term Insurance is the best product for managing the risk associated with loss of life. However, traditionally insurance products have always been associated with investments and individuals use insurance to achieve some of the life goals as well while covering the life risk.
You can read our earlier blog on mistakes to avoid while buying term insurance by clicking on the below link.
Features of ICICI Prudential GIFT PRO Life Insurance Policy
- Life Insurance Cover : This life insurance policy must always provide life insurance cover to be eligible to be called a Life Insurance Policy. This policy provides a life cover of little over 10 times of the annual premium paid by the insured.
- Flexibility in number of years of premium payment (5 to 12 Years)
- Guaranteed Income : This is the primary feature of the policy, wherein it guarantees to provide a steady stream of income to the policy holders for a pre-agreed period of time. ICICI Prudential GIFT Pro also provides flexibility in terms of guaranteed income
- Option to receive the guaranteed income on a monthly or yearly basis
- Number of years of guaranteed income (5, 7, 10, 12, 15, 20, 25, 30)
- Option to select level/Flat or Incremental income option. Under this feature, premium increases by 5% simple interest from 2nd year onwards.
- Option to increase guaranteed income by reducing life cover during policy inception
- Option to set the date of your choice for receiving guaranteed income.
- Option to get guaranteed income immediately after completion of premium payment term or postpone (defer) it by certain number of years (1 to 5 years). If the insured opts to defer the income period, guaranteed income rises proportionally resulting in higher rate of return.
- Flexibility in moneyback benefit
- Sum of total annualized premiums paid i.e., 25% to 100%
- Year of money back benefit i.e., either on maturity date or at the end of any policy year within the income period
We have made an effort to better explain the benefits through difference scenarios. Hope this helps:
Scenario 1 : ICICI GIFT PRO provides flat guaranteed income over a period of time with maturity benefit
Scenario 2 : Provides Incremental guaranteed income over a period of time with maturity benefit
Scenario 3 : Provides flat/level guaranteed income without any maturity benefit
Scenario 4 : Provides incremental guaranteed income without any maturity benefit
Scenario 5 : Provides incremental guaranteed income and insured opts for maturity period after 15 years
These are some of the scenarios which has been explained with illustrations from ICICI Prudential official website. In addition to these, we can have the below scenarios as well:
- Guaranteed Flat/incremental Income with maturity benefit, but low insurance cover to increase guaranteed income
- Guaranteed flat/incremental Income without maturity benefit, but low insurance cover to increase guaranteed income
Conclusion
As you saw from multiple scenarios, rate of return earned from ICICI Prudential GIFT Pro fails to beat inflation. We have given a quick summary on its suitability:
- Suits individuals worried about sliding interest rates over the next 10 years and want to have a secure stream of tax free income cashflow
- Not suitable for individuals who want to create wealth beating inflation
Life Insurance products can be quite complicated. Small mistake of choosing a wrong investment vehicle can cost you several millions of rupees over a long period of time.
You need to always seek professional assistance in deciding suitable insurance policy for yourself and your family, please click on the below link to get in touch with us.
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For more information on ICICI Prudential GIFT PRO, please visit the website of ICICI Prudential via the below link:
https://www.iciciprulife.com/protection-saving-plans/icici-pru-gift-pro.html