The Hindu Business Line : ICICI Prudential Life Stage RP

As market-linked insurance products are more in demand, insurance companies are fine-tuning their products to offer them as investment solutions.The latest offering from ICICI Prudential Life stable, ‘Life Stage RP’, is one such product. Some of the product’s features are listed below:

The product offers the option to choose from two unique portfolio strategies—Lifecycle-based portfolio strategy and fixed portfolio strategy.

Lifecycle based portfolio strategy takes into consideration the dynamics of different life stages of an individual. Its investment approach changes with each life stage.

Under the lifecycle based portfolio strategy, your investment will be distributed between two funds—Flexi Growth IV and Protector IV—in a proportion that depends on your age (automatic asset allocation).

Age-based portfolio management: At policy inception, your investments will be distributed between two funds. As you move from one age band to other, the fund will redistribute your investments.

Quarterly rebalancing: The fund resets asset allocation to the prescribed limits, based on quarterly review of how the portfolio has performed. This will help the plan maintain a steady allocation, despite market movements.

Capital preservation at maturity: Nearing maturity, in order to preserve the capital from the short-term market volatility, your investments in Flexi Growth IV will be systematically transferred to Protector IV in 10 instalments spread over the last 10 quarters of your policy.

Illustration: If you, at the age of 26, take a policy for 20 years, under the Lifecycle based strategy, 75 per cent of your funds will be allocated to Flexi Growth IV and balance 25 per cent to Protector IV. Once you turn 36, the asset allocation will be redistributed to reflect a 65:35 per cent mix.

When you turn 43, the policy will enter the last ten quarters of its term; hereonwardsthe equity component will be transferred in ten equal instalments to Protector IV. Hence, the Flexi Growth IV allocation will reduce from 65 per cent to nil.

Fixed portfolio strategy: If you prefer to allocate your investments in different assets classes based on your personal judgement, you can opt for the fixed portfolio strategy.

Under this strategy, you can choose to invest fully in any one fund or allocate your premia among various funds, in a proportion that suits your investment needs, from the menu of six funds.

Under this strategy, you have the option to switch among the six-fund options as and when you choose, depending on your financial priorities.

Change in portfolio strategy: You can change your chosen portfolio strategy up to 4 times during policy term free of cost.

Additional allocation of units: There will be an additional allocation of units accounting for 12 per cent of annual premium every 5 years of the policy term.

Additional allocation of units will be made only to the policy that is in force and the premiums have been paid till date.

Partial withdrawal benefit: After completion of three policy years, from 4th year onwards, one partial withdrawal is allowed—subject to 20 per cent of the fund value.

Death benefit: In the event of death during the term of the policy, the nominee will receive the sum assured or fund value.

Settlement options: On maturity of this policy, you can choose to take the fund value as structured benefit. With this facility, policyholders can opt to get payments on yearly, half yearly, quarterly or monthly (through ECS) basis, fo r a period of 1-5 years.

At anytime during settlement period, you can have the option to withdraw the entire amount.

Note: In any insurance product, insurance takes priority over the investment aspect.

Therefore, investors opting for ULIPs in the early part of their life may benefit from availing the maximum risk cover available at the time of investment.

In ULIPs, as the policy moves closer to maturity, the risk cover declines as the fund value climbs.

An example: At the age of 30, if you prefer to have a Rs 20-lakh cover, the premium for pure risk will be Rs 2,920 per annum, going up to Rs 4,960 at the age of 40.

At 50, the premium for the same cover will be Rs 11,820.

(This column is intended to acquaint investors with features of new insurance products and is not a recommendation to invest. Investors are advised to compare each product with similar ones already available before making a decision.)

More Stories on : Life Insurance | Investments | Stock Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page