ICICI Prudential Future Perfect (ICICI Prudential Future Perfect) is a traditional life insurance plan. This is an endowment plan.
A part of the maturity benefit is guaranteed. This means you know that you will get this money. The second part depends on the bonus you get.
Let us know in detail about ICICI Future Perfect.
ICICI Prudential Future Perfect
- Limited premium payment plan
- There are many options for the policy term.
- Note that this plan is not a ULIP.
- Every year some Guaranteed Additions and Bonuses are added to the policy.
- Terminal bonus can also be received at the time of policy maturity or in the year of death.
ICICI Prudential Future Perfect: Death Benefit
In case of death during the policy term, at least 10 times of the annual premium will be received. You can also get more than 10 times the amount.
This ensures that you do not have to pay any tax on the maturity amount. Section 80 on investing in this planc Tax benefit will also be available.
death benefit , Higher of (Sum Assured, Guaranteed Maturity Benefit (GMB)) , Earned Guaranteed Additions (Guaranteed Additions, GA), Reversionary Bonus , Terminal Bonus
ICICI Prudential Future Perfect: Maturity Benefit
maturity benefit = Guaranteed Maturity Benefit (GMB) + Earned Guaranteed Additions (GA) + Reversionary Bonus + Terminal Bonus
Guaranteed Maturity Benefit (GB) You come to know only at the time of buying the policy. It depends on your age, policy term, premium paying term and gender. Note that GMB can be less than Sum Assured. GMB increases with annual premium and premium paying term and decreases with age.
Guaranteed Additions (GA) Adds to your policy every year, At the time of taking the policy, you know how much you will get in the policy every year. GA Will get You already know the rate of GA. This rate is applicable on your annual premium. During the Premium Paying Term (PPT), GA will be available on the premium paid. GA will be available at the beginning of the policy year, after the premium paying term is over.
Reversionary Bonus is declared every year but you get this amount only at the time of policy maturity. This bonus only keeps on adding to the policy. Note that there is no guarantee of this bonus. In this policy you get compound bonus. This means that you get the bonus (GMB + all the old bonuses received so far) on top of it.
The declaration of terminal bonus is applicable in the year of maturity or death. Since this is a new plan, the terminal bonus is yet to be announced in this plan (as of FY2019). Note Terminal Bonus will be applicable to you only once. So a lot also depends on your luck. You will get the bonus declared for the year in which the policy matures (or the holder dies). Terminal bonus will not affect you in other years.
How much will be the return?
This is an endowment plan, so don’t expect good returns.
Let us understand with the help of an example.
A 30 year old male opts for a premium of Rs 50,000 per annum. The premium paying term is 20 years and the policy term is 30 years.
Sum Assured will be Rs 5 lakh.
The premium for the first year after GST will be Rs 52,251 and for subsequent years the premium will be Rs 51,126.
The GMB as per ICICI website will be Rs 8.72 lakh. GA will be Rs 2.27 lakh.Therefore, at the time of your maturity, you will get at least Rs 10.99 lakh (GMB + GA).
Apart from this, there are two more parts of maturity benefit. Reversionary Bonus and Terminal Bonus.
For estimating reversionary bonus, we old declared bonus can see ICICI had announced a bonus of 2% in 2017 and 2.25% in 2018 and 2019. Let us assume that a bonus of 2.25% will be available for the entire policy term.
The last part is the terminal bonus. Till now terminal bonus has not been announced in this policy. That’s why it would be difficult to guess. But keep in mind that terminal bonus will largely depend on your luck as well. In the above example terminal bonus of Rs 13.12 lakh was shown on ICICI website. Let’s assume that terminal bonus cannot be more than this.
I have compared the returns by showing 3 values of terminal bonus.
You can see that the return is 5.53% even after the higher number of terminal bonuses. If a good terminal bonus is not available, then the returns can also be between 3-4%.
According to me the return of 5.53% is not sufficient for a long term investment.
You can also get more life insurance and better returns by combining PPF and term life insurance.
For more information about this plan, you can visit this link.
ICICI Prudential Future Perfect page on ICICI Pru website
ICICI Prudential Future Perfect Policy Wordings
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