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A joint venture between ICICI Bank and Prudential Private Limited Company, ICICI Prudential Life is the leading private sector life insurance company. They began operations in December 2000 after approval was given by the Insurance Regulatory Development Authority of India (IRDAI).
For more than 20 years, ICICI Prudential has been providing high-quality products and superior services consistently. They offer term plans, savings, investment plans, and child plans. You can opt for conventional plans or ULIPs with regard to savings and investment plans. They have a wide range of products for all types of people.
ICICI Prudential Pension plans are designed for providing regular income for individuals on a monthly basis. The biggest concern for those who are retired is a regular cash flow as expenses continue to grow, and with customized pension plans, ICICI Prudential takes care of your cash flows post-retirement so that you can meet your expenses comfortably.
Here are the features of pension plans.
There are two types of pension plans offered by ICICI Prudential to take care of their income needs during retirement. Let us determine the features of both plans.
This is a Unit Linked Insurance Plan or ULIP. This is a market-linked product, and hence, returns vary according to the market movements. Here are the features of this plan.
|Entry Age||35 years||70 years|
|Vesting Age||45 years|
|Policy Term||10 years||30 years|
|Annual Premium||Rs. 48,000||30 years|
|Premium Payment Term||Same as the policy term or limited pay of 5/10 years||No limit|
Here is an example which explains how the policy works:
If you are 40 years old and paying an annual premium of Rs. 50,000 for a 20-year policy with a premium paying term of 5 years, your returns will be calculated as follows:
|Premium Amount||Rs. 50,000|
|Assured benefit||Rs. 2,52,000|
|Accumulated savings @ 4%||Rs. 3,65,007|
|Pension Booster Return @ 4%||Rs. 17,250|
|Expected annual annuity payout @ 4%||Rs. 20,916|
|Accumulated savings @8%||Rs. 7,21,620|
|Pension Booster Returns @ 8%||Rs. 33,549|
|Expected Annuity Payout @ 8%||Rs. 65,092|
This is an immediate annuity plan where you start receiving annuity payments immediately after payment of a one-time premium. Here are the features of the plan.
|Entry Age||100 years|
|Annuity||Rs. 1000 per month Rs. 12,000 per annum||No limit|
|Frequency of annual payout||Monthly, quarterly, half-yearly, or yearly.||No limit|
The reason why buying ICICI Prudential Pension Plans is a great decision is their claim settlement ratio of 98.6% (Financial Year 2018-2019). This is an assurance for you that when required, your claim will be admitted. When buying a pension policy, this is the most important thing to keep in mind.
Claim settlement is also easy and can be done in three simple steps.
The assets under management or AUM as on 31st March 2019, was Rs. 160000 crores. These are investments made by the pension plans into various equity and debt products. The products are cost-effective, customer-centric, and come with superior customer service. The funds have performed consistently and provided value for the customers.
Not only is ICICI Prudential Life, the first private sector insurance company, but they are also the first insurance company to be listed on the BSE and the NSE.
The company has crossed the 5-million policy mark in the year 2008. The total premium also crossed the Rs. 10000 crore mark.
Retirement can be the best phase of your life, provided you plan for it. You need to account for inflation and also factor in the costs related to higher medical expenses due to the possibilities of illnesses.
ICICI Prudential Pension Plans will help you achieve your retirement corpus. You need to start planning and investing early. Determine the present costs, which will continue after retirement and also add possible costs for medical expenses. When you are in the early phase of your career, you can choose the ULIP where there are two funds to invest in. The policy term of 30 years ensures that you will benefit from the power of equity. As you get closer to retirement, switch to the debt fund. This will ensure that you will reach your goal of retirement corpus. On retirement, you can commute 1/3 of the maturity amount in cash and use the rest to buy an annuity.
If you have already reached retirement age and have received a lump sum amount as superannuation benefit, you can use it for purchasing the immediate annuity plan. The annuity will be paid immediately on the nearest frequency, and you can enjoy a stable monthly income for the rest of your retired life.
So, choose wisely and invest in the pension plan that suits your needs. Enjoy the golden years of your life without compromising your standard of living.
Why Should I Buy ICICI Prudential Pension Plan?
Retirement is something you need to plan for. You would require regular income to meet your expenses when you retire. Due to inflation, the cost of living will go up when you retire. The best way to be prepared for retirement is to buy a suitable pension plan.
ICICI Prudential's Pension plans can be customized to your income requirements so that you have the required cash flow post-retirement. With their ULIP or immediate annuity plan, you can plan a comfortable retirement. You can maintain the same standard of living that you had when you were in active service.
What Is the Accumulation Phase of ICICI Prudential Pension Plan?
There are two phases in ICICI Prudential Pension Plan, one is the accumulation phase, and the other is the payout phase. The period in which you pay the premium for the chosen plan to create the retirement corpus is known as the accumulation phase. The retirement corpus created by the premiums you pay is then used to make the annuity payments. In the case of a ULIP plan, the premium payment period is up to a maximum of 30 years, and this is the accumulation phase. For the immediate annuity plan, the accumulation phase is the least as you start getting annuities after payment of the single premium.
How Do I Compute My Retirement Corpus for ICICI Prudential Pension Plan?
It is quite simple to calculate your retirement corpus for ICICI Prudential Pension plan with the online retirement calculator given on the company's website.
There are certain details that you will have to enter in the calculator to get the goal retirement corpus:
What Is the Vesting Age of ICICI Prudential Pension Plan?
The vesting age for ICICI Prudential Pension Plan is the age at which you start getting your pension. The vesting age for both ICICI Pru Easy Retirement Plan and ICICI Pru Immediate Annuity Plan are 30 years. The higher the vesting age, the higher the annuity payout.
What Are the Different Options to Pay Premium of My ICICI Prudential Pension Plan?
When it comes to options for payment of your ICICI Prudential Pension Plan premium, you can pay them monthly, quarterly, half-yearly or yearly. If you pay the premiums monthly, then the amount is low, and it is convenient to monitor. As far as the mode of payment is concerned, you can pay through:
Why Should I Buy ICICI Prudential Pension Plan When I Already Have a Provident Fund (Pf) Account?
You should buy ICICI Prudential Pension Plan, even if you have an Employee Provident Fund Account because the amount that you receive from your Provident Fund Account alone on retirement may not be sufficient due to inflation.
ICICI has a Unit Linked Insurance Plan, which is market-linked and will provide superior returns over the long term as equity has given the highest returns in the long term in the past.
On the other hand, the Provident Fund Account essentially invests in debt products, and the average interest declared by it is 8.5%. Even though the returns are assured and tax-free, the final corpus won't be sufficient to meet the expenses post-retirement.
To meet your post-retirement expenses, you will require the amount you receive from your company as provident fund and along with that a regular monthly income from a pension plan. Apart from your regular monthly expenses, you will have increased expenses on account of medical problems in terms of checkups, medicines, and hospitalizations. To be able to make provisions for these costs, your pension plan from ICICI Prudential will supplement your Provident Fund amount to ensure that you can retire comfortably.