An endowment plan is a life insurance plan that offers a life cover* and helps you grow your money. It provides returns that are fixed at the time of the purchase of the policy. It can be used to save for various goals like buying a house, your child’s education or marriage, starting a new venture and more.
Below is an understanding of what endowment insurance is and how it can help you.
How does an Endowment Plan Work?
Endowment plans provide you with life cover and also help you grow your money. The life cover secures your loved ones financially in case of an unfortunate event while the returns from the plan help you achieve your financial goals.
Endowment plans offer you the flexibility to choose the premiums you want to pay towards your plan. You may pay your premiums monthly, half-yearly, yearly or all at once depending on the type of plan you choose. The life cover offered by your endowment plan would be 10 times your annual premium.
Endowment plans provide you with a fixed amount called the maturity amount at the end of the tenure of the plan. This maturity amount is fixed at the time of the purchase of the plan itself and is free from any market fluctuations.
In case of an unfortunate event during the tenure of your plan, your loved ones will receive the life cover amount offered by your plan and any additional amount as specified in your plan.
For example, ICICI Pru Guaranteed Income For Tomorrow (Long-Term) is one such Endowment plan that offers life cover and guaranteed regular income^. The plan offers multiple options to choose from. Let’s say you choose to pay your premiums for 10 years and start receiving your income from the plan from 12th year onwards.
In this case, you will start receiving your income from the 12th year. In case of any unfortunate event after the 12th year, your loved ones will continue to receive the income from the plan till the end of the tenure of the plan.
In case of an unfortunate event any time after or during the first 10 years of your plan, the sum assured (10 times your annual premium) will be paid to your loved ones and your policy will end.
Who should consider buying an endowment plan?
An endowment plan can be ideal for creating an alternative source of income. It can offer you a lump sum income in the future. In addition, the plan provides your loved ones with financial protection in case of an unfortunate event. This type of life insurance can be suitable if you want to build savings at low risk while securing your loved ones financially.
ICICI Pru Guaranteed Income For Tomorrow (Long-Term) is one such Endowment plan that can help you achieve your financial goals.
Benefits of ICICI Pru Guaranteed Income For Tomorrow (Long-Term)
a) Life cover*
ICICI Pru Guaranteed Income For Tomorrow (Long-Term) provides life cover* that secures your loved ones financially in case of an unfortunate event
b) Guaranteed^ Income
The plan provides a guaranteed^ income for a period of up to 30 years. This enables you to fulfil your goals without any worries
c) Flexibility in paying premiums
You can choose to pay your premiums monthly, half-yearly or yearly, as per your convenience
d) Flexibility in receiving payouts
You can choose to receive your money from the plan monthly or yearly, as per your requirements
e) ‘Save the Date’ feature2
With this feature, you can choose the date on which you want receive your income. You can choose this date to coincide with special days, such as your anniversary, birthday of your loved ones, and more, or with the date of the payment of your dues, such as your loan EMIs, tuition fees of your child, and more.
f) Plan options
The plan provides the below two plan options to choose from as per your requirement:
i. Income – In this option, you receive your income for a duration chosen by you after you have paid all your premiums
ii. Income with 110% return of premium – In this option, you receive your income for a duration chosen by you after you have paid all your premiums. Additionally, you get back 110% of your total premium at the end of the policy term.
g) Tax benefits1
The tax benefits1 provided by the plan add to the overall returns from the plan. The plan provides the below tax benefits1 as per The Income Tax Act, 1961:
i. The premiums paid towards the plan are eligible for tax deduction1 of up to ₹ 1.5 lakh per annum under Section 80C
ii. The payouts received from the plan are also tax-free1 under Section 10(10D)
ICICI Pru Gold plan
1. Get Regular Income~ with a lump sum at maturity^ with three plan options:
- Immediate income
- Immediate income with booster
- Deferred income
2. Tax* deductions of up to Rs 46,800 p.a on premiums paid under Section 80C and the returns received are exempt as per the conditions under Section 10(10D) of the Income Tax Act, 1961.
3. Get 3% additional Survival benefit$ and Sum assured at maturity on purchasing the policy online.
Salient features of ICICI Pru Gold plan
ICICI Pru Gold is a protection and savings plan. This plan allows you to prepare for your financial goals, such as buying a house, your child’s education and marriage, your retirement and more. The plan offers moderate risk and helps you save tax* subject to conditions under The Income Tax Act, 1961.
Features and benefits of the ICICI Pru Gold plan:
- Choice of 3 customisable plan options~ - immediate income, immediate income with booster and deferred income
- Unique savings wallet$ that helps you pay your premiums, accumulate survival benefits$ and withdraw the balance in the wallet completely or partially as per your choice
- Tax*benefits on premiums paid and returns received
- Life cover1 for the entire policy term to secure your loved ones financially
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1Life Cover is the benefit payable on death of the life assured during the policy term
The Sum Assured on Maturity shall be the sum of Annualized Premium payable under the policy.
In all plan options, guarantee is in the form of ‘Guaranteed income’ as regular income and ‘Sum assured on maturity’ as a part of Maturity Benefit. Additionally, in ‘Immediate Income with booster’ plan option, the ‘Guaranteed booster’ also forms a part of guaranteed benefits. Guaranteed returns are payable subject to all due premiums being paid and survival of the life assured
*Tax benefits under the policy are subject to conditions under Sections 80C, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any will be charged extra as per applicable rates. Tax laws are subject to amendments from time to time. Please consult your tax advisor for more details
In ‘deferred Income’ plan option, you will receive regular income at the end of every year/month, starting from end of deferment period as chosen by you, provided the policy is in-force. You can start this income as early as 2nd policy year or as late as Premium Payment Term plus 1 year.
This regular income will comprise the following:
$Savings wallet: You have an option to accumulate the Survival Benefit, instead of taking the same as a periodic payment during the policy term. You need to opt in for this feature through explicit consent vide request submitted to Us, whereby the Survival Benefit when due will be transferred to the Savings Wallet. Upon crediting the Survival Benefit in the Savings Wallet on the due date, the Survival Benefit will be deemed to have been paid and any amount within the Savings Wallet will be non-participating in nature. This option can be opted for and opted out of at any time during the Income Term. The money within the wallet will be accumulated daily at an interest rate linked to the Reverse Repo Rate published by Reserve Bank of India (RBI). The interest rate used for accumulation under this feature will be reviewed twice every year on 1st of June and 1st of December, and will be set equal to Reverse Repo Rate published on RBI’s website as on the review date. The current Reverse Repo Rate as at June 1, 2022 is 3.35% p.a. In case the balance in the wallet is not withdrawn completely during the income term, such balance will be paid to the claimant in the event of death, surrender or maturity, whichever is earlier along with other benefit payments (if any). On payment of this benefit, the policy will terminate, and all rights, benefits and interests under the policy will stand extinguished. Please refer to the sales brochure for more details.
2You can choose to receive income on any one date succeeding the due date of first income to coincide with any special date. This is applicable only for annual mode of income.
ICICI Pru Guaranteed Income For Tomorrow (Long-Term) (non-linked non-participating individual life insurance savings plan) ) – UIN: 105N185V11
ICICI Pru Gold (Non-linked Participating Individual Life Insurance Savings plan) – UIN:105N190V01