Investment Plans 107 views September 25, 2020

ICICI Pru Assured Savings Insurance Plan

One likes to have an insurance product that gives financial protection to the concerned individual. There’s one ICICI Pru Assured Savings Insurance Plan that will meet this purpose. It is a non-linked non-participating life individual savings product that offers financial protection to the insured. Saving money helps you build a good habit as life is full of unfortunate events and a life insurance plan gives you a sense of security. It provides you a lump sum of money to meet long-term goals like children’s education, marriage, life after retirement, etc. ICICI Pru Assured Savings Insurance Plan gives you guaranteed savings benefits by which you can meet your life goals. This policy also provides a cover to your family in case of an unfortunate demise (of the insured). Let’s read this article further to know more about this insurance plan.

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Guaranteed Additions

ICICI Prudential Life Insurance Co. Ltd. offers you either 9% or 10% of the total paid premiums every year depending on your policy term. This is known as a life insurance policy guaranteed addition. It is payable by the company at the end of the policy term or upon the death of the insured.

Guaranteed Additions are added to your policy at the end of every policy year if you have paid the premiums. It is calculated using the formula below:-

Guaranteed Addition = Guaranteed Addition rate X Sum of premiums paid till date (excluding extra mortality premiums and GST + Cess (if any)

The Guaranteed Addition rate will depend on your policy term. Check out the table below to know the same

Policy Term Guaranteed Addition (GA) Rate
10 years9%
12 years10%
15 years10%

Example: Rakesh bought the ICICI Pru Assured Savings Insurance Plan for 12 years. And he has been paying an annual premium of INR 50,000 to the company. According to the above data by the insurer, the GA rate for Rakesh policy will be 10% as shown in the table below.

Policy TermAnnual Premium Payment (in INR)Total Premium Payment (in INR)Guaranteed Addition (in INR)
150,00050,00010% x 50,000 = 5,000
250,0001,00,00010% x 1,00,000 = 10,000
3---
4---
5---
6---
7---
8---
950,0004,50,00010% x 4,50,000 = 45,000
105,00,00010% x 5,00,000 = 50,000
1150,0005,00,00010% x 5,00,000 = 50,000
1250,0005,00,00010% x 5,00,000 = 50,000

ICICI Pru Assured Saving Plan Calculator

To calculate your return from the policy, you can use the ICICI Pru Assured Saving Plan Calculator. The tool is accessible to every individual. You just need to visit the official website of ICICI Prudential Life Insurance Company Limited. Follow the steps below to use the return calculator:-

  1. Select ICICI Pru Assured Saving Plan from the list
  2. On the page, you will see a ‘Check Return’ button click it
  3. After that, you will be redirected to the return calculator
  4. You need to enter a few details like for whom you have been buying this life insurance plan – self, spouse, children, or grandchild.
  5. Enter the premium amount you wish to pay
  6. Select the premium frequency from monthly, half-yearly or yearly
  7. Enter your details like gender, date of birth, mobile number, and email address

You need to agree to the company terms and conditions and click  on the ‘Check Returns’ button

Guaranteed Maturity Benefit (GMB) On ICICI Pru Assured Savings Insurance Plan

The insured will get a guaranteed lump sum at the end of the policy term. And it will depend on the policy term, the premium amount, premium payment term, age and gender. Sometimes your GMB may be lower than your Sum Assured in the policy. Let’s find out how to calculate the GMB for the ICICI Pru Assured Saving plan.

For example, you are a healthy male of 30 years and pays an annual premium of INR 50,000 for this policy. And the policy payment term is of 10 years for a 12 years policy term, so your GMB will be as follows:

GMB = INR 50,000/144.31x 1000

GMB = INR 3,46,476

What Death Benefit Does the Insured Get from the ICICI Pru Assured Savings Insurance Plan?

If the insured person dies during the policy term, the company will pay any of the following, whichever is higher:-

  1. Sum Assured plus accrued Guaranteed Additions
  2. GMB plus accrued Guaranteed Additions
  3. Minimum Death Benefit Sum Assured which is equal to 10X annual premium

A minimum Death Benefit in this policy could be 105% of the sum of premiums paid till the death of the insured (excluding any extra mortality premiums, GST + Cess), equalling 10X the annual base premium or the chosen Sum Assured, whichever is higher. The policy benefits will cease once the payment is made.

ICICI Pru Assured Savings Insurance Plan Surrender Clause

After paying the premium for 2 years, you have a surrender value for it. As per the policy surrender conditions, the assured will get anyone of the following whichever is higher.

  1. Guaranteed Surrender Value (GSV) plus the policy surrender value of accrued Guaranteed Additions (GA)
  2. Special Surrender Value (SSV)

Premium Payment Term for ICICI Pru Assured Saving Plan

Your premium payment term may vary based on your policy term which you have chosen at the inception of the policy. The assured should know that the premium payment term cannot be changed any further. A fully paid policy is one where the assured have paid all the premiums and there are no further premiums due in the policy term.

A premium-paying policy is one when all your due premiums are paid to the date, but future premiums are for the rest of the premium payment term. Check out this table to know how you should choose the premium payment term for ICICI Pru Assured Saving Plan.

Policy TermMinimum and Maximum age at entryMaximum age at MaturityPremium Payment Term Minimum Premium Amount
10 years8-60 years18-72 year5 years40,000
15 years3-57 years18-72 year5 years50,000
15 years3-57 years18-72 year7 years50,000

What If the ICICI Pru Assured Saving Plan Premiums are Discontinued?

If the premium payment is discontinued after surrender value is acquired on the policy, the policy will continue as a ‘paid-up’ policy with reduced benefits such as:

  1. Paid-up Sum Assured = Sum Assured x Total number of paid premiums/Total number of payable premiums
  2. Paid-up Guaranteed Maturity Benefit = GMB x Total number of premiums paid/Total number of premiums payable
  3. Paid-up Guaranteed Addition rate = Guaranteed Addition rate x Total number of premiums paid/Total number of premiums payable

Once the ICICI Pru Assured Saving Plan becomes paid up, your policy Guaranteed Additions will accrue at a Paid-up Guaranteed Addition Rate based on your total paid premiums till the date (excluding extra mortality premiums, GST + Cess).

If the insured dies during the policy term when the plan is paid-up, the company will offer a Paid-up Death Benefit to the beneficiary or nominee among the following whichever is higher.

  1. Paid-up Sum Assured + Accrued Guaranteed Additions
  2. Paid-up Guaranteed Maturity Benefit + Accrued Guaranteed Additions
  3. 105% of total paid premium amount (excluding extra mortality premiums, GST + Cess) till the date of death

Your Maturity Benefit for a paid-up policy would be GMB + the accrued Guaranteed Additions.

ICICI Pru Assured Saving Plan Revival

If your plan is discontinued due to payment of premiums, it may be revived to the underwriting company conditions which are as follows:

  1. The application for revival should be made within 5 years from the due date of the first unpaid premium and before the termination date of the policy. Your policy revival will be based on the prevailing board’s approval.
  2. You need to furnish your own expenses, satisfactory evidence of the health as required by the Company.
  3. The due premiums together with an interest of 7.28% p.a. need to be paid. The interest rate is compounded semi-annually and may subject to change from time to time.

The revival of the policy may differ from those terms which were applicable to the policy before it was discontinued. For example, extra mortality premiums or charges may be applicable if it is mentioned in the policy documents. It may take effect only if it is specifically communicated by the company to the policyholder.

On the revival of a paid-up policy, the paid-up Sum Assured and paid-up GMB are restored to the Sum Assured and GMB applicable at the time of premium discontinuance. The full Guaranteed Additions that would have accrued to the policy at that time will be added to the policy and the reduced Guaranteed Additions will be reversed.

How to Apply for Loan Using ICICI Pru Assured Saving Plan

You can use your life insurance plan to meet your financial emergency. To help you deal with such a situation better, ICICI Prudential Life Insurance Co. Ltd. allows the assured to borrow a loan against the policy’s surrender value.

So, it’s clear that a loan is available only when your policy acquires a Surrender Value. The loan amount can be up to 80% of the policy Surrender Value. The insurer will be entitled to call for repayment of the loan with all the due interest by giving a three months notice to the insured, if the due loan amount is greater than the policy surrender value or if the policy is in a paid-up state.

When the assured is unable to repay his/her policy loan dues, the policy will be foreclosed, the policy will terminate and all rights, benefits and interests under the policy will get forfeited.

The applicable interest rate on policy loans is equal to 150 basis points in addition to the prevailing yield on a10 year Government Security. The applicable policy loan interest rate as per the date of July 2020 is 7.28% per annum which is compounded semi-annually by the insurer. The policy loan interest rate basis is reviewed from time to time and may get revised subject to the prior approval of the Insurance Regulatory Development Authority of India (IRDAI).

ICICI Pru Assured Saving Plan Suicide Clause

There is an exclusion in the ICICI Pru Assured Saving Plan that you should know about before buying it. If the life assured is sane or insane and commits suicide within 12 months from the date of policy commencement or the date of policy revival, the policy will get void and no benefits will be given.

ICICI Pru Assured Saving Plan Free Look Period

The company will give you 15 or 30 days to review the policy terms and conditions and return the policy document if you are not satisfied with the insurance plan. The period will start from the date you received the policy.

  1. If your policy is not purchased through Distance Marketing, you have a Free Look period of 15 days
  2. Otherwise, if your policy is purchased through Distance Marketing, the Free Look period would be of 30 days

If you return the policy during the free look period, the insurer will return the paid premium, which is subject to the deduction of:

  1. Stamp duty charges
  2. Expenses borne by the company if there is any medical examination

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

How Should I Know Whether I Bought the ICICI Pru Assured Saving Plan from Distance Marketing or Not?

If you buy this policy from Distance Marketing, the procedure may include every activity of solicitation (plus lead generation) and the sale of insurance products via the below modes:

  1. Voice mode (Includes telephone-calling)
  2. Short Messaging Service (SMS)
  3. Electronic modes like e-mail, internet, and interactive television (DTH)
  4. Physical modes such as direct postal mail and newspaper and magazine inserts
  5. Solicitation via any means of communication other than in-person

Tax Benefits From ICICI Pru Assured Saving Plan

If you have paid the policy premium during the policy term, you are eligible for a deduction under section 80C of the Income Tax Act. You can claim the tax deduction under section 80C on the paid premium, but it should not exceed 10% of your sum assured. You can also get an exemption under section 10(10D) of the Income Tax Act when you receive the policy maturity amount.

  1. If the policy paid premium doesn’t exceed 10% of the sum assured ( if it is issued after 1 April 2012)
  2. And 20% of the sum assured ( if it is issued before 1 April 2012)

The amount you receive on the policy maturity is fully exempt from Income Tax under Section 10(10D).

Note: No exemption from income tax on the maturity is provided where the paid premium amount is more than 10% of the sum assured. Any amount which you will receive from the insurer where the premium is more than 10% or 20% of the sum assured is fully taxable.

ICICI Pru Assured Saving Plan Nomination Facility

As per Section 39 of the Insurance Act, a nomination is allowed in a life insurance policy. In this, the assured, at any time before the maturity or termination of the policy, can nominate a recipient to receive the payment by the policy in the event of his/her death.

If your policy nominee is a minor, you might need to appoint an appointee who is a person that receives the money on the behalf of the nominee. Any change of nomination, which is in effect before termination, shall be communicated to the company. The insurer does not express any opinion on the validity of, nor does it accept any responsibility of nomination.

ICICI Pru Assured Saving Plan Terms and Conditions

Section 41 Clause

Under Section 41 of the Insurance Act, 1938, no person will allow or offer to allow an inducement to any person to take, renew, or continue the insurance in respect of any kind of risk pertaining to lives or property. Any rebate of the whole or part of the payable policy commission or any rebate of the policy premium will not get accepted unless rebate is allowed by the published prospectuses or tables of the insurer. Any person failing to comply with the provisions of this policy section is punishable with a fine of up to INR 10 lakh.

Section 45 Clause

Under Section 45 of the Insurance Act, 1938, any fraud or misrepresentation if being established by the Company, the policy will be canceled immediately and the insurer will pay the surrender value.

Section 38 Clause

Under Section 38 of the Insurance Act, an assignment is allowed by the insurer.  An assignment of this policy is made by an endorsement upon the policy itself or by a separate instrument signed by the assignor specifically stating the fact of the assignment. The first assignment is made by the policyholder only. This assignment will be effective, as against the company, from and upon the service of a written notice upon the company and the company recordings of the assignment.

In this policy, an assignment will not be allowed if the policy is sourced under the Married Women’s Property Act, 1874.

Key Features of ICICI Pru Assured Saving Plan

  1. You can choose the premium payment term and policy term as per your need
  2. You will get a life cover for the entire policy term
  3. If the policies are sourced through POS Channel, there will be no medical examination

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