ICICI Pru IProtect Smart Life Housing Review
ICICI Pru IProtect Smart Life Cover: – Term insurance is the simplest and cheapest way of life insurance. However, financial institutions are not always pleased with simplicity. And there is always this race to overcome the competition.
Therefore, insurance companies have started to provide term package life insurance plans, which provide a lot of auxiliary coverage. One such plan is ICICI Pru IProtect Smart Life Coverage Plan. ICICI is the aggressive marketing of this plan. Nothing wrong with that. Apart from the simple coverage of vanilla life, the plan offers coverage for terminal illness, accidental death, critical illness and permanent disability.
In this post, I will review ICICI Pru IProtect intelligent life coverage plan and discuss all riders and coverage in detail.
Review: ICICI Pru IProtect Smart Plan
ICICI Prudential IProtect Smart Term Plan is a term life insurance plan. There is no investment benefit. In addition to a regular life cover, it also offers a series of additional edges. Some of the benefits are incorporated into the plan while the others can be purchased for an additional premium.
Apart from the death benefit, terminal illnesses and the Permanent Disability Premium exemption are embodied options. You will opt for accidental death benefits and critical illness pilots if you need it. These riders have a cost.
ICICI Pru IProtect Smart Life Housing Review
Terminal Illness Benefit: If you are diagnosed with a terminal illness (which can lead to death), the insurance company can pay the insured sum to you. You’ll use the money however you want. The policy may expire when the payment of said benefit.
Waiver of premium on permanent disability: In the event that you remain permanently disabled due to an accident, all future premiums are waived by the insurance firm. Keep in mind that there is no payment from the insurance company. Only permanent disability due to an accident is covered. Disability due to natural causes such as paralysis is not covered.
Do not go through the product brochure or the formulation of policies for a better understanding.
Accidental death benefit Rider: In case of death due to an accident, the candidate obtains double the amount insured. Therefore, if your insured basic sum is Rs 1 crore, your candidate can Rs 2 crores (Rs 1 crore basic death benefit + Rs 1 crore accidental death benefit).
Benefit from Critical Illness Rider: If you choose for this benefit and are diagnosed with a life-threatening illness, the insurance company can pay your critical illness sum insured. Do not notice the critical amount of the insured illness should be chosen separately and it does not have to be equal to the Insured base sum. The maximum cover of critical illness under the plan is Rs 1 crore.
The pilot covers 34 critical illnesses.
The Critical Illness rider is an accelerated rider, meaning his Death Benefit decreases in the amount of Critical Illness benefit paid. It is assumed that the sum insured under your plan is Rs 1 crore and has added critical illness benefit of Rs 10 lacs.
In case you are diagnosed with a serious illness, the insurance company pays Rs 10 lacs and the sum insured (death benefit) is reduced to Rs 90 lacs. Critical Illness also covers itself over. Starting next year, you will be charged only for the coverage of the Rs 90 lacs term (there will be no additional charge for Critical Illness Rider).
There is a good illustration on this case in the product brochure. You can do it.
Death Benefit Payment Options
After the death of the policyholder, the candidate will obtain payment in 3 different ways. Consider the sum insured of Rs 1 crore.
Lump sum: In total Rs 1 crore are paid as lump sum.
Income option: 100% of the death benefit is paid each year, ie, the candidate can get Rs 83,300 per month for 10 years, that is, Rs 10 lacs each year for 10 years. Total payment of Rs 1 crore for 10 years.
Increase in income: 100% of the death benefit is paid in the first year. The payment will increase each year by 100% each year. Therefore, the candidate gets Rs 83,300 per month in the first year, Rs 91,667 per month in the second year (Rs 11 lacs in the second year), Rs 1 lac per month in the third year (Rs 12 lacs in the third year Year) And then on. Total yield of Rs 1.45 crores over 10 years.
In addition, at any time, the beneficiary has the option to convert all or part of the monthly income into a lump sum. The value of the lump sum, in such cases, comes to discounting the monthly payments in 4wd p.a.
Protection of the stage of life
Life insurance requirements continue to fluctuate during your lifetime. Certain life events like marriage or the birth of a child will increase your life insurance requirement. ICICI Pru IProtect smart plan allows you to increase your sum Insured by up to 500 at the time of the wedding (maximum Rs 50 lacs). In addition, you will improve your life coverage by 25 each (maximum Rs 25 lacs) at the time of the birth of each of your 2 children.
So, if you start with a deck of Rs 1 crore before the wedding, it will improve it to Rs 1.5 crores once the wedding, to Rs 1.75 crore when the 1st child’s birth and Rs 2 crore when The birth of second child.
Additional sum insured has a cost. You have to pay the additional premium for the increase in the sum insured.
Premium Comparison with Other Life Insurance Plans
|ICICI Pru IProtect Smart Life Housing Review|
You can see the premium income plan is that the lowest and also the income increase plan is the highest. With some calculations, you (30 year old male non-smoker) are paying Rs 5,668 per rider for accidental death benefit and Rs 4,168 for vital rider disease.
As far as the basic plan (life) is concerned, you will find a good number of plans in the range of Rs 8,000-10,000 each year. Therefore, the premium for the base plan (Life) is on the higher side, but you have to understand that there are 2 riders built into the base plan.
I have previously expressed your reservations against an Accidental Death Rider. I do not see much value during this rider. If you are well with the cost, you will.
When you get to the critical illness benefit, you want to compare the plan with the autonomous critical illness plans. You will compare critical illness plans based on 3 parameters namely. Cost, no. Of the diseases covered and the period of survival.
This pilot covers 34 diseases, which is on the upper side. Generally, critical illness plans have a survival period. Therefore, it is necessary to survive for a fixed number of days before the insurance company makes the payment. If you do not survive the period, the insurance company does not pay. I’m still at the loss why you would have such a rule. The good part about the rider is that there is no survival period (I could not find in the policy formulations), which is a great positive.
On the cost, autonomous critical illness is cheaper in the initial years however it can get more costly in the later years. With this rider, you will always pay the same cost (as long as the deck is not exhausted). What is cheaper?
Points to consider: –
The death benefit is quite objective. The insurance company pays once the policyholder dies. However, with other characteristics, you must establish that the insured event has happened. To establish the terminal illness, the policy holder must be, in the opinion of 2 specialist doctors, it is unlikely that they will survive for more than 6 months.
Permanent disability is defined as the inability to perform 3 of the 6 activities mentioned in daily life. The activities mentioned are mobility, bending, climbing, lifting, writing and blindness. There is severity attached. For example, mobility is defined as the ability to walk a distance of 200 meters on flat ground. The disability must be verified by a medical empaneled company. You know what it means.
Coming to vital diseases, there is severity associated with each critical illness. Therefore, you may think you had a heart attack in real life however it will not be heart attack according to the insurance policy. Such things leave much subjectivity in the matter.
Keep in mind that this happens with all critical illness plans or personal accident covers. Insurance firms need to put things in writing to avoid undue litigation. Therefore, this problem is not specific to ICICI Pru IProtect Smart Forward plan.
I suggest you read the terms of the policy for a better understanding of the plan.
Premium paid for life insurance (the basic sum insured and accidental death benefit is eligible for the tax deduction under Section 80. Severely paid premium Rider benefit is eligible for tax benefit under Section 80D.
What do I prefer about ICICI Pru IProtect Smart?
It provides you with several payment options (sunshine, income, or income increase). I could have preferred an additional explicit option wherever you take part amount as a lump sum and remaining as a monthly payment.
It provides you with an option to increase the coverage of life in various stages of life such as the wedding and the birth of a child. Although you always buy an additional cover, however it is good to have an option to improve coverage within the same plan. This option is only available in Life
What I do not like / care in ICICI Pru IProtect Smart?
Permanent Disability Premium Exemption: Although exemption from the permanent disability premium is a good feature, you want a personal accident coverage and not just the premium waiver. Only in case of permanent disability, not only do they face problems in paying life insurance premium. You need cash to make up for lost income as well.
Rider is an accelerated driver.
The insurance firm has named one of the options “Life and Health“, which could be a bit misleading. There is no health coverage, but only critical illness coverage. Do not take critical risk rider is not an alternative to a comprehensive health plan.
Accidental Death Benefit Rider: You should always have adequate life coverage. The cause of death is immaterial. Simply because someone dies due to an accident does not mean that the person has a higher life insurance requirement. I agree that accidental death is sudden however so is death due to a heart attack.
It is difficult to look for defects after talking about a long-term plan. It’s good to have options. ICICI Pru IProtect smart plan exactly that. Some of the features do not add much value however it is still acceptable.
In my opinion, the benefit of terminal illness and exemption from the premium on permanent disability does not really add much value. Unfortunately, these are part of the base plan and can not be eliminated.
I would not suggest an accidental death benefit rider. So Discard Life Plus and All-in-One options.
ICICI Pru IProtect smart plan is as good (or as bad) as any other long-term plan. There is nothing special about it. Therefore, if you are planning to buy a long term plan and feel comfortable with ICICI prudent life insurance, you will consider life plan. It’s a bit pricey than other plans though, personally I’m fine with that. You will also improve your coverage under this plan at the time of the wedding and the birth of the children.
Critical Illness Benefit Rider looks good and reasonably priced. If you plan to purchase a critical illness cover and a term life plan, you will consider Life & Health plan.
Please understand that I am not saying that you need a critical illness cover. All I’m saying is if you think you need one; ICICI Pru IProtect smart plan offers a good choice.
Just keep one thing in mind. If you are opting for serious illness benefits, you might suggest that you choose for a higher sum insured. As an example, if your life insurance requirement is Rs 75 lacquers and you choose to cover the critical illness of Rs 10 lacs, go for the insured sum of Rs 85 lacs. This can ensure that it is adequately covered even if the critical illness benefit is exhausted.
Disability rider, in the table above, is different from the Permanent Disability premium exemption.