Why is ICICI Pru Easy Retirement SP special?

You can enjoy the opportunity to get potentially better returns and grow your money by investing in a mix of equity and debt. This combination helps you beat inflation while protecting your investments.

How does a mix of equity and debt beat inflation?

Inflation is the rate at which the price of goods and services increases over a period of time. For example, the average price of petrol has increased from `40 in 2005 to `62 in 2015.

To gain from your investments, your savings should grow at a rate higher than the inflation rate.

In order to get better returns in the long run, it is advisable to have equity exposure. Equity markets are subject to short-term market volatility. However, the effect of market volatility is negligible in the long term.

Below is an example of how investing in a mix of equity and debt can help in building your savings,

If 60% of your money was invested in the equity market and 40% in debt market## in the last 10 years, your investment would have grown by around 12% on an annualized basis. This growth would have helped you stay ahead of the inflation rate of about 6%# in the same period.

*As per the IOCL Petrol Prices in Delhi
#
Source: Bloomberg - WPI inflation average of 10 years (from March 2005 to March 2015)
##
Equity market: BSE 100; Debt market: CRISIL Composite Bond Index (from March 2005 to March 2015)

Along with the potential to give you higher returns, this plan also protects your money. It does this by offering capital guarantee on the money that you invest. On vesting, i.e. maturity, you will be entitled to the Assured Benefit^ or Fund Value, whichever is higher.

How much Assured Benefit will I get?

In case your Fund Value* at maturity is less than the sum of premiums paid by you, the Assured Benefit ensures that you receive 101% of all the sum of premiums paid by you and top ups, if any.
You can utilise this benefit amount only as per the available options. There are two options available with this plan:

  • You can commute up to one-third of the benefit amount available on the termination of the policy, or to the extent allowed under the Income Tax Act. The balance amount can be used to purchase an immediate annuity plan offered by ICICI Prudential

  • Purchase a single premium deferred pension product offered by ICICI Prudential with the entire amount.

Alternatively, you can choose to postpone your vesting or maturity date. This means you can change the date from which you want your regular income to start. You can postpone the vesting date as many times as you want, provided your age is below 55.

As a result, your money is protected as the company returns your invested money regardless of market ups and downs.

For example, if you invest `1,00,000 every year for 5 years, the company guarantees to return a minimum sum of `5,05,000.

^The Assured Benefit amount shown assumes all due premiums as per the premium payment term shown above are paid. On maturity, you will receive higher of Assured Benefit or fund value. Assured Benefit will be 101% of total premium paid which is applicable only on maturity of the policy and does not apply on death or surrender.
*Fund Value is the total value of the money.

ICICI Pru Easy Retirement SP allows you the choice of two fund options. You can switch between these funds using our switch option.

Which funds can I invest in with ICICI Pru Easy Retirement SP?

  • Easy Retirement SP Balanced Fund (SFIN: ULIF 136 25/03/13 ERSPBF 105) – Here, your money is invested in a mix of equity and debt to ensure balanced returns.

  • Easy Retirement Secure Fund (SFIN: ULIF 133 02/11/12 ERSF 105) – Your money is invested in a mix of debt, money market and cash investments to achieve a balance between protection and returns, to guard it from any unforeseen market falls, thereby adding to your savings.^

*Four free switches are allowed every policy year. Subsequent switches would be charged `100 per switch.
For more information on these funds, please refer the product brochure.

The company adds Pension Boosters to your retirement savings. Thus, it helps your savings grow.

How much Pension Booster will I receive?

On completion of the tenth policy year, the Pension Boosters will be added for every subsequent fifth policy year provided at least five years’ premiums have been paid. It will be equal to 2% of the average daily total Fund Value of the previous 12 months.

Loyalty Additions

Loyalty Additions will be allocated as extra units at the end of every policy year starting from the end of the sixth policy year provided monies are not in the PDP Fund. Each Loyalty Addition will be a percentage of the average of daily Fund Values, including Top up Fund Value, if any, in that same policy year as per the table below:

Policy Year Loyalty Addition
6 onwards 0.25%

Loyalty Additions will be allocated between the two funds in the same proportion as the values of total units held in each fund at the time of allocation. The allocation of Loyalty Additions is guaranteed and shall not be revoked by the Company under any circumstances.

Choose from the following multiple options to receive your money:

  • Regular Income option – Portions of your Fund Value* are given to you as regular income either monthly, quarterly or yearly

  • Lump sum + Regular Income – Flexibility to withdraw 1/3rd of your Fund Value as a lump sum and use the remaining to receive regular income

  • Postpone your retirement date – Convenience to postpone your pay-outs and schedule them after a few years provided you are below 55 years of age

  • Single Premium Deferred Pension Product – Choice to invest your Fund Value in a new pension plan to get regular pay-outs at a later stage

Which of the above payment options will suit me the best?

  • Regular Income: This option lets you receive your money regularly. You can choose from five annuity options to receive your regular income. It is suitable if you need the money immediately.

  • Lump sum + Regular Income: You receive up to 1/3rd commutation of your premium amount as a lump sum completely tax-free subject to conditions as per section 10(10A). The remaining amount can be used to purchase an annuity plan to get regular income. Also, you can avail tax benefit on your retirement income as the amount received at the policy maturity is completely tax-free. You can choose from five annuity options to receive your regular income.

  • Postpone your retirement date: If your age is below 55 years, you can delay your retirement date and allow your hard-earned money some more time to grow.

  • Invest in a Single Premium deferred pension plan: A Single Premium deferred pension plan invests your money further to give you an opportunity to get potentially higher returns. This option is ideal in case you don’t the need the money immediately.

What is meant by annuity and what are the annuity options available to me?

Through a lump sum investment, you start getting a regular income, also called the annuity. The actual amount of annuity chosen by you will depend upon the annuity rate applicable at the time of purchase and pay-out option. These rates are guaranteed throughout your life.

You can choose from the following five annuity options of the Immediate Annuity plan:

  • Life Annuity: You will receive pay-outs for life under this option.

  • Life Annuity with Return of Purchase Price: You will receive pay-outs for life in this option. In your absence, the purchase price of this plan will be returned to your nominee*.

  • Joint Life, Last Survivor without Return of Purchase Price: Similar to the Life Annuity option, the company gives you the pay-outs for life first. In your absence, your spouse will continue to receive the same pay-out amount as pension.

  • Joint Life, Last Survivor with Return of Purchase Price: In this option, you will receive the pay-out amount. In case of an unfortunate event, your spouse will continue to receive the same amount as pension. In the absence of both you and your spouse, the purchase price of this plan will be returned to the nominee chosen by you.

  • Life Annuity guaranteed for 5/10/15 years and thereafter: In this pay-out option, the regular pay-outs will be provided (to you or your wife) for a chosen term (i.e. 5, 10 or 15 years), in both, your presence of absence. If you complete this term, the pay-outs will still continue for the rest of your life. However, your spouse will not receive any pay-outs in your absence after the completion of your chosen term.

*Nominee is the person you appoint at the time of purchase for receiving the benefits of your insurance policy in your absence.

In case of an unfortunate event during the policy term, your nominee receives a Guaranteed Death Benefit or the Fund Value, whichever is higher.

What is the Guaranteed Death Benefit?

Your family will receive the Guaranteed Death Benefit or the Fund Value, whichever is higher, in your absence. The Guaranteed Death Benefit is equal to 105% of the total premiums paid and Top-ups**, if any.

**Top-up is any extra amount over and above your premium that you can add to your Fund Value.

With this plan, you can reduce your taxable income by investing up to ` 1.5 lakh under Section 80CCC. This will help you save tax. What’s more, even shifting your money from equity to debt or debt to equity is completely tax-free*. The money you get on commutation is also tax-free*.

*Tax benefits under the policy are subject to conditions under Section 80CCC, 10(10A) and other provisions of the Income Tax Act, 1961. Service tax and applicable cesses will be charged extra as per prevailing rates. Tax laws are subject to amendments from time to time.

Product Snapshot

Finding the right solution for your retirement planning can be a tedious process and a long-term commitment. Presenting ICICI Pru Easy Retirement SP – a Unit Linked Insurance Plan that not only offers your money the needed market exposure but also gives the safety net of capital guarantee. This allows you to enjoy potential for higher returns without risking all that you have saved.

Product at a Glance - ICICI Pru Easy Retirement SP

How much premium can I pay?

You can pay a minimum of `48,000. There is no upper limit on the premium that you can pay.

At what age can I start this plan?

You can start this plan from the age of 35. The maximum age should not be more than 80 years

When will my pension start?

Your pension, also called the regular pay-out, can start from the minimum age of 45 years. But, the maximum age should not exceed 90 years.

How many years do I have to pay premiums for?

You have to pay the premium only once, at inception, for this policy.

How long does the policy last?

You can choose your policy to last either 10, 15, 20, 25 or 30 years.

How much premium can I pay?

You can pay a minimum of `48,000. There is no upper limit on the premium that you can pay.

At what age can I start this plan?

You can start this plan from the age of 35. The maximum age should not be more than 80 years

When will my pension start?

Your pension, also called the regular pay-out, can start from the minimum age of 45 years. But, the maximum age should not exceed 90 years.

How many years do I have to pay premiums for?

You have to pay the premium only once, at inception, for this policy.

How long does the policy last?

You can choose your policy to last either 10, 15, 20, 25 or 30 years.

 

*ARR stands for Assumed Rate of Return.

*The annuity amounts have been calculated for a Life Annuity with Return of Purchase Price annuity option, using illustrative annuity rates. The illustrative annuity rates used for these calculations are based on rates of interest of 4% and 8% p.a. Annuity rates are subject to change from time to time. Please contact us or visit our website for details.

 

This illustration is for a male life. The above are illustrative values, net of all charges, service tax and applicable cesses. Since your policy offers variable returns, the given illustration shows two different rates (4% & 8% p.a. as per the IRDAI circular, Ref: IRDAI/ACT/GDL/LIF/248/11/2011) of assumed future investment returns. The returns shown in the illustration are not guaranteed and they are not the upper or lower limits of what you might get back, as the value of your policy depends on a number of factors including future investment performance.

Food for Thought

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ICICI Pru Easy Retirement (UIN: 105L138V02)

Unlike traditional products, Unit Linked insurance products are subject to market risk, which affect the Net Asset Values & the customer shall be responsible for his/her decision. The names of the Company, Product names or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns.

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