Comparing Smart Kid(ICICI Pru.) and Child Fortune Plus(LIC)

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We have already discussed Smart Kid ULIP of ICICI Prudential Life insurance and Child Fortune Plus of Life Insurance Corporation of India (LIC).

Let us compare both the popular plans based on the features.

For detail on this plans click my previous posts

· ICICI Prudential Smart Kid New Unit Linked

· LIC's Child Fortune Plus ULIP plan

Allocation Charges:

Child Fortune plus: Regular premium

Premium

1st year

2nd and 3rd

4th onward

10,000 to 1,00,000

29.0%

5%

2.50%

1,00,001 to 1,50,000

28.50%

5%

2.50%

1,50,001 to 2,00,000

28.00%

5%

2.50%

2,00,001 & above

27.50%

5%

2.50%

Smart Kid: Regular Premium

Amount

1st year

2 – 5 years

6 – 10 year

From 11 years

12,000 – 19,000

20%

5%

2%

1%

20,000 – 49,999

19%

5%

2%

1%

50,000 -

18%

5%

2%

1%

Let us calculate allocation charge with an example for a 15 years term.

Child Fortune Plus

Smart Kid

Prem.

Invest

charge

Invest

charge

1st year

10000

7100

2900

8000

2000

2nd year

10000

9500

500

9500

500

3rd year

10000

9500

500

9500

500

4th year

10000

9750

250

9500

500

5th year

10000

9750

250

9500

500

6th year

10000

9750

250

9800

200

7th year

10000

9750

250

9800

200

8th year

10000

9750

250

9800

200

9th year

10000

9750

250

9800

200

10th year

10000

9750

250

9800

200

11th year

10000

9750

250

9900

100

12th year

10000

9750

250

9900

100

13th year

10000

9750

250

9900

100

14th year

10000

9750

250

9900

100

15th year

10000

9750

250

9900

100

Total

150000

143100

6900

144500

5500

Smart Kid scores over LIC in term of allocation charge as overall charge is less in longer run.

Single Premium:

LIC has a very reasonable allocation charges from 4% to 4.25% however Smart kid has a very high charge from 8% for low premium bracket and 2% for high premium bracket.

Child Fortune Plus

Smart Kid

25,.000 – 49,000

4.25%

8%

25,.000 – 49,000

4.25%

8%

25,.000 – 49,000

4.25%

8%

50,000 – 99,999

4.25%

6%

1,00000 – 4,99,999

4.25%

4%

5,00,000 – 10 Lac

4.25%

2%

Above 10 Lac

4.00%

2%


Fund Management charges:

In case of Child Fortune plus it ranges from 1.20 % and 0.60 % for High growth to secured fund respectively.

Smart Kid also has similar charge structure and it range from 1.50% and 0.75 for high growth to secured fund respectively.

Riders:

Both the policy provides riders like Accident benefit and Critical illness benefit riders.

However Smart Kid has riders like Income benefit rider which is unique to it.

Maturity and Death benefits:

Both the policy has same feature here.

On maturity fund value is paid and on death nominee will receive SA and no future premium required to be paid and it will taken care by company. All the benefit of the policy continues.

In the similar way both policies provide settlement options.

Surrender charges:

Both the policy can be surrendered after 3 completed years however Smart Kid has a very strict rules as well as high surrender charges compared to LIC’s Child Fortune Plus.

In case of Smart Kid full amount is paid only after completion of 5 years.

Partial Withdrawal:

Both policies allow partial withdrawal facility. However Smart Kid allow it after 5 years while LIC allow it after 3 years.

Fund type and switches:

Smart Kid allows the choice of 7 funds while in Child Fortune Plus there are only 4 fund options available.

Both the policies allow 4 switches in a year.

Conclusion:

Both the policy has most of the features similar like maturity and death benefit, settlement options, rider facility and it is more like you prefer ICICI prudential or LIC of India. As far as return on these policies is concerned ICICI is always aggressive in investment compared to LIC, above comparison is purely based on features of both the policy.

Smart Kid clearly scores at allocation charge in regular premium mode, fund options.

LIC scores in term of liquidity as there is no surrender charge as well as partial withdrawal are allowed after 3rd year. Single premium allocation charge is also less and fund management charge is very attractive. In case of regular premium Child fortune plus allow minimum Rs. 10,000

Premium compared to Rs. 12,000 of Smart Kid.

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3 comments:

Himanshu said...

Nice Article

Himanshu said...

Informative Article.

Anonymous said...

very informative. Could you also compare the SBI Scholar II and Birla Sun Life Child dream plans.

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