Term Insurance 6261 views July 20, 2019

ICICI Pru iProtect Smart Term Insurance Plan

Many people refrain from buying term insurance fearing the complexities involved. The complicated jargons and insurance terminologies only add to the difficulty of customers in understanding the plan’s benefits. However, ICICI Prudential life insurance company understands the everyday dilemma that their customers face and, hence, decided to keep it simple. The end result is this plan that customers, of every age group, identify with and include it in their investment portfolio.

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This term insurance plan aims to protect more than just secure. Identified as one of the top life insurance plans sold in India, this plan not only secures against sudden, unforeseen death of the insured but also enables an added health cover against 34 critical disorders. The inclusion of 34 chronic disorders that a major percentage of India are diagnosed with at some point in their lives ensures a financial backbone to the policyholders, if and when required. Accident death cover can go up to Rs 2 crore if opted for.

Features of ICICI Pru iProtect Smart Term Insurance Plan

Some essential features of this plan that explain its growing reputation include:-

Online Availability

This plan is available online only. One may consider buying this plan either by logging on to the insurance company website or submit details at an insurance web aggregator’s portal before making the payment for this plan.

Four Protection Options

This plan is available in four variants, viz., Life, Life Plus, Life and Health, All in One.

Complete Coverage Available

This plan does not secure against death alone. In addition to securing against sudden death of the insured, this plan contains in-built benefits to ensure a comprehensive coverage against terminal illness or permanent disability due to accident or disease.

Female Lives Matter

Female customers buying this plan can avail special discounts on premium charges.

Four Payout Options

Four kinds of death payout options are available depending on the possible future needs of the nominees. This means that the insured while buying the policy can ensure complete financial security to their loved ones by choosing the payout option accordingly.

Extended Cover to Females

An in-built extensive cover for females ensures timely financial coverage in case they are diagnosed with diseases like breast cancer and cervical cancer.

The Choice to Increase the Sum Assured

The amount of death benefits chosen at the time of policy inception may not be enough to financially support your loved ones later. This plan allows you to increase the amount of sum assured during the important milestones in life including marriage, the birth of a child / legal adoption, etc.

Quantum of increase in sum assured at the various milestones include:-

  1. Marriage: Additional death benefit up to 50 percent of the original sum assured subject to the maximum limit being Rs 50,00,000
  2. Birth/Legal adoption of 1st child: The additional benefit to the tune of 25 percent on the original sum assured subject to a maximum limit of Rs 25,00,000
  3. Birth/Legal adoption of the 2nd child: Another additional benefit to the tune of 25 percent on the original sum assured subject to a maximum limit of Rs 25,00,000.

Surrender Option Available

Some policyholders opt to pay a single premium only to realize later that the term insurance plan they had bought may not serve the requisite purpose later. They may then choose to surrender the single-premium plan in lieu of which the insurance company credits the surrender value to their account.

Tax Benefits Available

Tax benefits on premium charges under Section 80C are available. Availing the critical illness benefits ensures a tax exemption under Section 80D while the entire sum assured or death benefit handed over to the nominee is exempt under Section 10(10D) of the Income Tax Act 1961.

Options With ICICI Pru iProtect Smart Term Insurance Plan in India

The ICICI Pru iProtect Smart Term Insurance plan is available in four options. These include:-

Life Option

As per this option, the insurance company is liable to hand over the sum assured in the event of death to the nominee or in the event of terminal illness to the policyholder. In addition, in the event of the insured becoming permanently disabled due to illness or accident, the insurer waives off the remaining premium charges to be paid for the rest of the policy period.

Life Plus Option

This option is not different from the “Life” option. Over and above the benefits available in the above option, the insured can also consider paying for an additional death benefit cover of up to Rs 2 crores.

Life & Health Option

This option contains features in addition to the “Life” option. In addition, policyholders can opt for an additional rider called the “Critical Illness Benefit” cover of up to Rs 1 crore. However, this benefit can be availed only during the policy term. Also, it is important that the insured is diagnosed with any of the chronic disorders included in the list of 34 critical illnesses mentioned in the policy proposal. Post the critical illness payment, the term insurance plan will continue to stay active, albeit with reduced premium charges coupled with the sum assured reduced by the amount of critical illness benefit paid to the insured.

All in One

Choosing this option means that the insured avails all the options included in the above three options.

Benefits of Buying ICICI Pru iProtect Smart Term Insurance Plan

Available online, this plan continues to be one of the most sought after plans since its inception. Before we proceed to discuss how buying this plan can help, let us go through the key benefits that this plan offers. Some of them include:-

Affordable Premiums

Inflation has always made its effect felt on the prices of products and services including the ones that we use in our everyday lives. Daily operational expenses in addition to the innumerable loans that we pay for each month can be back-breaking. However, you cannot ignore the importance of having a term plan in place to ensure that your loved ones continue to enjoy the same lifestyle even in your absence. ICICI Pru iProtect Smart term insurance plan comes at affordable rates, which means that you avail your choice of life cover in lieu of nominal premium charges.

A Longer Cover

It is advisable to buy term insurance early in life considering the low premiums involved. However, many people prefer to opt for an increased life cover to ensure that their nominees receive the death benefits. This plan allows you to be covered till the age of 85 years. However, there is a provision to opt for a whole life cover too, i.e., you are covered till you turn 99 years old.

A Financial Backup When Critically Ill

Lifestyle habits, pollution, genetic disorders, etc. have resulted in many people being diagnosed with chronic disorders. Hospitalization and subsequent medical treatment may cause a dent in our pockets, which explains the need to have a financial cover in place that takes care of the treatment expenses.

Opting for an additional rider called the Critical Illness Benefit while buying ICICI Pru iProtect Smart ensures that you have an added health insurance cover for 34 critical illnesses. A unique benefit of this rider is that the insurance company hands over the claim payout immediately as the insured is diagnosed with any of the covered 34 critical illnesses. A copy of the diagnosis report is sufficient to make the claim as opposed to most other insurance plans that require the patients to submit test reports or associated hospital bills. The amount of claim payout is determined during the policy purchase and can go up to as high as Rs 1 crore.

Multiple Payout Options

Your loved ones may not be adept at handling a large sum of money at one go. Moreover, their needs may vary. Your family may need a lump sum amount to pay off for your children’s education and marriage or a monthly income that allows them to repay loans in addition to paying for daily operational expenses. This plan comes with four different payout options. They are:-

Lump sum payment: Preferred as the most common payout, the insurance company hands over the sum assured in a lump sum to the nominees in the event of the sudden death of the policyholders. This means that if the predetermined amount of life cover as included in the policy document is Rs 1 crore, the nominee(s) of the insured would receive the entire sum assured in one go.

Monthly income payout: Day-to-day expenses mandate a monthly income in place. This explains why this term insurance plan allows its policyholders to choose the income payout option that avails the nominees of a regular monthly income. Equal monthly instalments equivalent to 0.83333 percent of the total sum assured will be handed over to the dependents. This implies that for a life cover amounting to Rs 1 crore, the monthly payout will be Rs. 83,333. The nominee may also choose to receive the first year’s income equivalent to Rs 10 lakhs in a lump sum. The rest of the sum assured amount will be disbursed over a span of nine years at the rate of 0.80 percent of the total benefit amount, i.e., Rs. 80,000 every month.

Increasing monthly income: It is difficult to beat the effect of inflation with constant income levels. This explains the need to have an increasing income level each month. Choosing this option ensures that your nominee gets 45 percent increased life cover. This means that if the life cover was chosen is Rs 1 crore, then the nominee will receive Rs 10 lakhs in the first year, Rs 11 lakhs in the second year, Rs 12 lakhs in the third year and so on. By the end of the 10th year, the total life cover received would be equal to Rs 1.45 crores. The nominees of the insured keep getting a regular monthly income for 10 years with the income amount going up by 10 percent simple interest each year.

Lump sum plus income: This payout option is relatively new compared to the other payout options. Choosing this option means that the insurance company disburses the life cover to the nominee into two parts as mentioned in the policy document. For example, if the sum assured is Rs 1 crore, then the insurance company will hand over Rs 50 lakhs in a lump sum while the rest of the available death benefits will be paid out in equal monthly installments over the next 120 months at 0.83333 per month. This amounts to an approximate payout of Rs 41,667 every month.

Terminal Illness Cover (including AIDS)

Sexually transmitted diseases like AIDS can not only wreak havoc on one’s life but result in acute financial distress too. An in-built benefit like a terminal illness cover inclusive of diseases like AIDS means that the insurance company hands over the entire death benefits to the insured before death, thus, allowing enough money in hand to seek the necessary treatment.

Choice of Accident Cover

Most plans require you to make the choice of the add-on riders during policy purchase. This plan, however, allows you to choose an add-on rider like the Accidental Death Benefit later at any time during the policy period. Choosing this rider cover means that the nominee is entitled to an additional amount in the event of accidental death of the insured. This can be explained with the help of an example. For example, if the policyholder buys the term plan with a life cover worth Rs 1 crores and an accidental death benefit equal to Rs 50 lakhs. This means that in case of accidental death of the insured, the nominee will be entitled to a total amount of Rs 1.5 crores.

Keeping Your Wife Protected

Disputes in a family are common, especially, if it involves a large amount of money. The fact that your wife and children are cheated of the insurance company is a possibility if necessary legal measures are not taken on time. To ensure that your relatives or creditors do not cheat your wife and children of the insurance claim amount, you may opt to buy the ICICI Pru iSmart plan under the Married Women’s Property Act (MWP Act). Buying this term insurance plan in line with the MWP Act ensures that your wife and children receive the full amount of the insurance claim amount.

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