ICICI Prudential Cash Advantage Plan is a traditional savings plan which provides monthly incomes after the premium payment term is over. The plan, thus, provides easy liquidity and availability of funds even during the plan tenure. It is a participating plan which means that bonuses are added to the plan benefits which increase the corpus payable.
Step 1 – the policyholder chooses the Sum Assured, the premium amount, the premium paying term and frequency and the cash benefit mode. Based on the insured’s age and the above factors, the Guaranteed Cash Benefit and the Guaranteed Maturity Benefit are calculated.
Step 2- after the premium paying term is over Guaranteed Cash Benefit is paid monthly or annually as chosen by the policyholder till the term is over. On maturity, the Guaranteed Maturity Benefit is paid with accrued bonuses.
Step 3 – if the insured dies during the plan tenure, the death benefit is paid irrespective of the Guaranteed Cash Benefits already paid.
Karim, a 35 year old male, buys the plan with a premium of Rs.50, 000. The tern selected is 15 years and premiums are paid for 5 years.
Option 1 – After the premium paying term is over Karim gets 1% of the Guaranteed Maturity Benefit for the remaining term of 10 years. On maturity, the Guaranteed Maturity Benefit is paid with accrued bonuses.
Option 2 – Karim dies in the 10th year of the policy. Irrespective of the cash benefits received for 5 years, the death benefit is paid along with bonuses.
|Age at entry (in completed years)||Policy term 15 years – 3 years
Policy term 17 years – 1 year
Policy term 20 years – 0 years
|Age at maturity (in completed years)||18 years||80 years|
|Term of the plan||15,17 or 20 years|
|Premium paying options||Limited pay|
|Premium Paying term||5,7,10 years|
|Premium amount||Policy term 15 years – Rs.30,000
Policy term 17 years – Rs.18,000
Policy term 20 years – Rs.12,000
|Guaranteed Maturity Benefit||Policy term 15 years – Rs.74,451
Policy term 17 years – Rs.65,364
Policy term 20 years – Rs.63,881
|Sum Assured on Death||Age less than 45 years – 10 times the annual premium
Age 45-54 years – 7 or 10 times the annual premium
Age more than 54 years – 7 times the annual premium
Below is a sample illustration showing the Guaranteed Cash Benefit, Guaranteed Maturity Benefit and Sum Assured under the plan for various combinations of premium amount and policy term. The premium payment term is 10 years less than the plan term.
The premium paying frequencies are annual, half-yearly and monthly.
The minimum Guaranteed Maturity Benefit is 100.1% of the total premiums paid during the plan term. However, any extra premium paid would be deducted from the total premium amount for computing the minimum Guaranteed Maturity Benefit.
The grace period is 15 days if monthly premium is paid otherwise the period is 30 days.
The plan might pay three types of bonuses. These are reversionary bonuses added every year and interim bonus and terminal bonus added on plan maturity or on earlier death during the plan term. Bonuses are added to a policy in which due premiums are regularly paid.
If the premium payment term is 5 years or 7 years, the plan acquires a Surrender Value only if the first 2 years’ premiums have been paid. However, if the plan tenure is 10 years, Surrender Value is available if premiums for the first 3 years have been paid.