ICICI Pru Guaranteed Wealth Protector (ULIP)-Is it really win win plan?
Are you seeing ICICI Pru Life Guaranteed Wealth Protector – Win win plan on advertisement hoardings on the road side? FM Radio keeps buzzing about this plan several times in a day. Are you wondering what is this win-win plan advertisement appearing major financial websites? This ULIP plan is offered by ICICI Pru life named Guaranteed Wealth Protector indicates that it is win win to have equity linked returns and also capital protection. ULIP schemes issued earlier have been cheating investors by charging high allocation and agent commissions. Does this ICICI Pru life guaranteed wealth protector is different from earlier ULIP Plans? Is it really win win plan ?
About ICICI Pru Guaranteed Wealth Protector ULIP
This is a Unit Linked Insurance Plan (ULIP) indicates that it would protect capital and would provide your assured benefit of 101% of premiums paid. Generally, all ULIP’s fund value would get reduced to the extent of commissions paid to agents + premium allocation charges, etc., Hence ULIP holders fund value shows very less compared to what they invested for a moment ignore the returns. This plan indicates that it provides 101% of assured benefit and investors are getting tempted to invest in this.
Also Read: Top Term Insurance Plans in India
Important Highlights of ICICI Pru Guaranteed Wealth Protector plan
- It offers assured benefits
- Option to pay for a single premium or premiums for 5 years
- Loyalty additions and wealth booster features where a sum is added to your fund value
- Like any other regular insurance plan, you would get tax benefits.
Features of this ICICI Guaranteed Wealthy Protector plan
*Snapshot from Brochure
What are the objectives or strategy of this insurance plan?
Your money would be invested in life growth fund or life secure fund, which depends on your age
*Snapshot from Brochure
Benefits under this insurance plan
1) Maturity benefit: This would be maximum of
Fund value, including loyalty additions and wealth booster or
101% of single premium (one pay) or 101% of the sum of all premiums paid (5 pay)
2) Loyalty additions: Loyalty addition, units are added at the end of the policy year from the 6th year onwards. This would be 0.25% of average fund in last 8 quarters.
3) Wealth booster: Extra units would be added at the end of the 10th policy year which would be 1.50% in the case of one pay and 3.25% in case of 5 pay.
4) Dealth Benefit: On dealth of the insured, nominee would get Sum Assured as indicated in above table.
Coming to various deductions and allocation charges in this insurance plan
- Policy admin charges = 2.52% per annum during premium payment term and 1.20% after that. For One pay it is Rs 720 per annum for 5 years.
- Fund management charge of 1.35% per annum + 0.50% is adjusted in NAV for investment guarantee
- Mortality charges = Rs 1.52 to Rs 14 per every Rs 1,000 sum assured
Illustration with an example
- 35 years – Rs 100,000 single premium – One pay
- Sum Assured = 1.25 x premium = Rs 1.25 x 100,000 = Rs 125,000
- Assured benefit would be = 101% of premium = Rs 101,000
- Maturity amount @ 4% returns – Rs 113,853 and 8% = Rs 167,243
- Loyalty addition = 0.25% from 6th year to 10th year = 1.25% in total. This would depend on fund value
- Wealth booster – 1.50% at the end of the 10th year.
- Total additions would be 2.75% (approx)
Positive factors of ICICI Guaranteed Wealthy Protector plan
- Provides assured benefit of 101% of premiums paid.
- Loyalty additions of 0.25% of average fund value every year from 6th year onwards
- Wealth booster package which adds 1.50% (single pay) or 3.5% (5 pay) of fund value at the end of the policy term
Also Read: Best Mediclaim Plan to buy in India
Some of the Negative factors of ICICI Guaranteed Wealthy Protector plan
- You cannot surrender the policy within 5 year policy term. If you want to surrender the policy within 5 years, the fund value would go to discontinued fund account and you would get amount after 5 years completion. During such discontinuance period you would get 4% annualized interest.
- Additions from loyalty additions and wealth booster would get offset to some extent of deductions. Net summary is deductions are higher than additions.
- Like any other ULIP, even this has several deductions like mortality charges, allocation charges, fund management fees etc., which are high and makes this plan unattractive.
Download Brochure of ICICI Pru life guaranteed wealth protector plan
Conclusion: ICICI Pru life guaranteed Capital Protector ULIP win win plan is not a win win in reality. Though it offers several benefits all such benefits are adjusted with the charges which this plan deducts. However, considering earlier ULIP plans where your investment amount is being reduced, this plan at least protects to that extent where it offers 101% assured benefit. But I do not see any reason why I need to invest my money and think of protection of the money. Rather, I consider the term insurance plan and invest balance money in bank FD and sit and relax rather investing in this and worrying about it.
Readers, have you got tempted and invested in this plan ? What do you say about this plan. I would love to hear your views on this.
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Suresh
ICICI Pru Guaranteed Wealth Protector (ULIP)
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Hello Suresh, we had invested in ICICI Prudential Lifestage Pension Policy in sept 2009. one lakh each for 3 years. Now I have entered the 6th year where the surrender charge is 2%. Yesterday when I checked the value to my account is only 352000/-. I was thinking of surrendering rom this plan and opening a wealth protector plan with them for 13% assured return when i happened across this blog.
what is your opinion?
Nisha, Just ignore all ULIP plans. Invest in bank FD if you do not take risk. If you can take some risk, you can look to invest in mutual funds. However consider term plan as first step
Hi Suresh,
I feel very bad as i have just started investing in this plan yesterday i.e., 08/09/2014. After reading your review i am really furious on the ICICI employees who suggested me this plan. In our discussion they never mentioned me about the charges and the deductions that you have mentioned. They explained me all the benefits.
What should i do now and please also let me know what will be the charges if the exit this plan.
Hi
I want to invest my money. I have no knowlegde about how to invest. I was convienced by ICICI prudential guys for "gauranteed weath protector". After reading this article, I am feeling like I made a mistake. What should i do now?
Hi Asmita, Nothing is late. You can re-look such scheme and come out and invest your funds atleast in bank FD or RD where you can grow your money.
Dear Suresh,
As mentioned by you that return on ICICI Guaranteed Wealth Protector scheme on an average is 5 -6% Does this excludes hidden charges like allocation,mortality,fund management or includes them bcz if it includes them then it is a great loss, bcz these agents were telling that there is 12-16% return/annum in this scheme so plz guide wether it is worth investing or not.
Sudeep, Returns I indicated is indicative and after considering all charges. If someone is promising 12% to 13%, ask them to give in writing from ICICI team. Do not invest in such ULIP schemes.
Dear suresh,
I have taken Max life -Guaranteed monthly income plan for 11 years,Premium 33030 p.a Now i am feeling this plan is not good. Please advice if i discontinue ?
Hi Sangeetha, There are several people like you, who have been cheated by insurance agents who get 35% commission in 1st year of your premium. My suggestion, consider term plan and then exit this.