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ICICI Prudential iProtect Smart : Term + Critical Illness Plan

ICICI Prudential Life Insurance company have recently launched ICICI Pru Life iProtect Smart -offers additional benefits along with basic life cover.

 

ICICI Pru iProtect Smart

 

Key features of ICICI Pru Life iProtect smart:

  1. Protection for family: through  pure life cover.
  2. Protection against disability : In case of permanent disability due to an accident, the policy continues without paying any further premiums.
  3. Benefits under ***Terminal illness: If  diagnosed with terminal illness, policy holder will receive complete sum assured.
  4. Protection against ***Critical illnesses (if opted ): Additional cover against 34 conditions of Critical  illnesses if opted.
  5. Accidental death benefit (If opted):In case of death due to an accident ,nominee will receive double the sum assured.
  6. Lumpsum or structured benefit payouts if death claim arises.
  7. Different premium payment options like – one time, Limited time premium payment or throughout life premium payment.
  8. One can increase life cover at different stages of life like marriage or birth of children.

 

Different plans and options:

ICICI PRU IPROTECT SMART

//please read “Accident Benefit” as “Accident Death Benefit” in Life Plus option.

 

***Terminal illness Vs. critical illness:

Terminal illness means likely death within 06 months of diagnosis.This opinion need to be confirmed by two specialist doctors having same area of specialization.

While critical illness is life threatening condition but death within certain period can not be predicted.E.g Patient with last stage kidney failure needs regular dialysis.It can be classified as critical illness not terminal illness as patient can live on dialysis.

 

Different scenarios if policy holder opted for All benefits:

  1. Policy holder dies within policy period:Death benefit (sum assured) payable to nominee and policy is closed.
  2. Policy holder diagnosed with Terminal illness: Benefit equivalent to death cover payable to policy holder and policy is closed.
  3. Permanent disability due to accident : Policy benefits continues without having to pay any future premiums.
  4. If policy holder dies in Accident: Nominee will receive DOUBLE the sum assured subject to max benefit of Rs.2 Crore.
  5. Policy holder diagnosed with listed Critical illness:Critical illness benefit will be paid out and policy continues with reduced life cover.If critical illness benefit is equal to death benefit then policy will be closed.
  6. If no claim arises : Then no survival or maturity benefits available.

 

Premium payable : For Basic life benefit,for 30 yr old, 30yr policy period , 1Cr death benefit, approximate annual premium payable will be around Rs.9000.If you are looking for additional benefits – accident death & critical illness cover then you can visit company website for quote or contact their representative.

 

Tax benefits : Tax benefits u/s 80C and 80d as applicable

 

Should you buy ICICI Pru iProtect smartDo not buy only for tax benefits – affordability is a key:

I would like to cover all risks which can have deep  impact on my or families financial life .But affordability is major factor.

If – one need to pay different EMIs,

– need to pay & plan for children’s education,

– need to plan for retirement,

– need to spend on holidays…

one  need to check first whether can I afford this additional cost or not & need to optimize them.

Pure term cover & pure mediclaim is essential but one can think about extra facilities if you can afford the premium….

Invest Once – From Bharti Axa Life Insurance

You may have seen advt of Bharti Axa – Invest Once where investor is looking for investment option.One suggest deposits, one gold and one stock market.As shown in advt, investor have some issue with either instrument.Interest income is taxable for deposits,Gold prices are bearish and one can’t predict about stock market.This plan is shown to overcome the limitations of these instruments.

What is Bharti Axa Invest Once :

  • As name Invest Once indicates,this is single premium plan.There won’t be any compulsion about future installments.
  • Traditional plan : so there won’t be any stock market exposure.
  • Policy Term : either 05 yrs or 10 yrs.
  • Death benefit: Death benefit of 125% of single premium (110% if age of policy holder is more than 45 yrs.).Sum assured can be enhanced up to 10 times of premium by paying some additional premium as per mortality table.
  • Maturity Benefits : Guaranteed additions @9% for 10 yr term & @7% for 05 yrs period.
  • Benefit u/s 80C for premium paid up to 10% of sum assured.So  complete premium will be  eligible u/s 80C, if sum assured is 10 times of premium paid.
  • Service tax @ rate of 3.09% of premium is payable.

Few important points to remember:

  1. For Tax Free maturity, policy holder need to avail sum assured at least 10 times of premium to make maturity eligible for section 10 (10d).Tax Free maturity is essential if policy holder is expected to be in 20-30% tax bracket.
  2. 9% Guaranteed additions is not same as 9% Deposit rates:

Flow of Guaranteed Additions Vs.Deposit Interest

  • Flow of Guaranteed additions:
Base premium considered : Rs.5 Lakh

Cumulative Guaranteed Additions (G.A.)@ 9% For 10yrs Term

G.A. After 1st Yr : 45,000
After 2nd Yr 90,000
After 3rd Yr 135,000
After 4th Yr 180,000
After 5th Yr 225,000
After 6th Yr 270,000
After 7th Yr 315,000
After 8th Yr 360,000
After 9th Yr 405,000
Last Yr 450,000
Maturity :Base premium + total Guaranteed Additions: 500000 + 450000   9,50,000
  • Deposit Interest Cash Flow
Deposit : Rs.5 Lakh

Deposit Rate: 9% compounded Quarterly

Flow of cumulative  Interest received

After 1st Yr : 46,541
After 2nd Yr 97,415
After 3rd Yr 1,53,025
After 4th Yr 2,13,810
After 5th Yr 2,80,255
After 6th Yr 3,52,883
After 7th Yr 4,32,273
After 8th Yr 5,19,052
After 9th Yr 6,13,908
Last Yr 7,17,595
Maturity :Base deposit + total interest received: 500000 + 717595   12,17,595

One can see  compounding effect is missing from guaranteed additions from insurance plans.

But deposit interest rate will subject to 10% tax deducted at source and interest is completely taxable as per investors tax slab while maturity amount of insurance policy will be tax free if conditions of section 10 10(d) are met.

Buy “invest once” Or not:

This plan is convenient for:

  • Risk averse investors.
  • who falls in high tax bracket.
  • Current deposit rates for 10 yrs period are around 7-7.5%.Rates are still expected to fall further.For high tax bracket (20-30%) individual net interest will be too low around 4-5%.

After considering service tax, premium payable for 10 times sum assured ,this plan will offer you Tax Free,net return ( in terms of compounding) around 6% with additional death insurance for period of 10 yrs.Buy if you are agree with it.

Invest-Once Brochure To view more details

Details of Edelweiss Tokio Criticare+ :Critical Illness Insurance Plan

Edelweiss Tokio Life recently launched Critical Illness insurance product : Edelweiss Tokio Life Criticare+.As name indicates it will provide a insurance cover against 17 mentioned critical illnesses.If policy holder is diagnosed with any mentioned critical illness then lumpsum benefits are payable immediately on diagnosis and if policy holder is survived for 28 days after diagnosis.Please remember that this is not Mediclaim product and so benefit will payable on diagnosis unlike to mediclaim products where hospitalization is needed for claim.

Edelweiss Tokio Life CritiCare+

Details of Edelweiss Tokio Criticare+ are as follows:

Cover will be against 17 major critical illnesses :

  1. Open Chest CABG -Coronery Artery Bypass Graft
  2. First Heart attack of Specified Severity.
  3. Open heart replacement or Repair of Heart valves.
  4. Kidney failure which need Regular dialysis.
  5. Major Organ transplants – like Kidney,Heart
  6. Stroke resulting in permanent symptoms
  7. Arota surgery
  8. Permanent paralysis of limbs
  9. Coma of specific severity
  10. Severe burns
  11. Total blindness
  12. Aplastic anaemia
  13. Cancer of specific severity
  14. Benign brain tumor
  15. Major organ transplant – Bone marrow,Liver,lung,pancreas
  16. Motor neuron disease with permanent symptoms
  17. Multiple sclerosis.

Please take medical help to understand the meaning of illnesses mentioned above or Refer to broucher Here

Multiclaim Option: This policy have added multiclaim option.Company have categorized illnesses in 03 different groups and one illness  under different groups can be claimed .But this facility will come with added premium rate.

Premium of Edelweiss Tokio Criticare+:

Premium rates depends on sum insured, Age and policy term.Premium rates will be higher for more term, age and sum insured.E.g for Sum insured of Rs. 5Lakh individual with age 35 yrs and policy term of 30 yrs premium will be Rs 2575 + Service Tax and surcharges & for individual of 40 yrs , premium will be Rs.3600 + S.T and Surcharge.

Limitations of this plan:

  1. This is critical insurance plan so claim will be payable only if severity of illness is life threatening.E.g there are certain cases of cancers which are not life threatening .
  2. Premium rates are fixed for 05 yrs and can be revised thereafter as per experience of company so policy holder need to pay premiums at revised rates to continue the plan.
  3. Claim payable only if policy holder survives for at least 28 days after diagnosis.
  4. Max term is available for 30 yrs so for individual of 35 yrs cover will be available up to age of 65 yrs which may not be sufficient.
  5. As this is pure critical illness plan , there won’t be any survival , maturity or surrender benefits.

Tax benefits:Tax benefits U/S 80d are available for premium paid towards this policy.

Its true that Critical illness may lead to severe loss of income and put pressure on family due to heavy expenses towards such illnesses.But after considering limitations of this plan one can purchase only if he/ she affords to buy after having sufficient exposure towards own retirement corpus and other necessary expenses.

Disclaimer : Author not related to any insurance company

 

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Information provided on this blog is for general purpose only & not investment advice.Please take advice of SEBI Registered Investment Advisors before taking any investment decision.
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