ICICI Prudential Invest Shield Cash Back: Review

Posted by Admin on 3

With the market is going down it is time for people to look for investment instrument which can offer a chance to earn high return but when it comes to risk the investment should at least guarantee their investment.

ICICI Prudential’s Invest Shield Cash Back is one of the ULIP plan which provides chance to earn high return but at the same time if your investment turns negative it promise you to pay at least what you have invested.

But because of this feature this plan has so many restrictions and most important only 1 fund which invest only in Debt and money market.

Let us look at the key feature of this plan.

Min/Max Entry Age

0/65 years

Min/Max Age of Maturity

19/75 years

Min/Max Term

10-30 years

Minimum Premium

Rs 8000 P/A

Min. Sum Assured

Annual Premium * Term/2

Premium Guarantee:

Total premium paid till date minus amount withdrawn partially is guaranteed on maturity.

This is called as Guaranteed Value.

Maturity Benefit: On completion of term of the policy, the higher of the fund value or guaranteed value is paid to the policyholder.

Death Benefit: Unlike many ULIP which offer higher of Sum Assured or Fund value. On death of the policyholder this policy offer Sum Assured plus higher of fund value or guaranteed value at the time of death will be paid out to the nominee of the life assured.

This is the most important feature of this plan as nominee would not only receive Sum Assured but also the Guaranteed Value or Fund value.

Partial Withdrawals: Unlike many ULIP plans which offer partial withdrawals after completion of 3rd year, this plan allow it from the 6th year onwards; one partial withdrawal per year is allowed, up to a maximum of 10% of your fund value till the end of the term.

Fund Options:

Only one fund option is available and which invest entire amount in to Debt and Money Market and hence the risk is very low but at the same time return will also be low.

There is no switching facility as only one fund option is available.

Cover Continuation:

Again there is restriction in term of Guaranteed Value.

If one chooses Cover continuation option, on maturity only the fund value is paid and not guaranteed value.

If premium is paid for at least three years and one wish to stop premium then one can opt for this feature, if opted the policy will remain in force and applicable charges will be deducted from the existing units.

Premium allocation charge:

It is very high compared to other ULIP.

1st year it is 55%.

2nd year it is 20%.

3rd year onwards 3%.

Policy admin. Charges: Rs. 40 per month.

Mortality charges: Monthly deduction as per age.

Fund Management charge: 1.25 % PA of fund value.

Surrender charges:

If premium payment is stopped before 3 years, one end up loosing lots of money while surrender as allocation charge it self is 55% in first and 20% in second year.

If premium is paid for less then a year surrender value is 0% of fund value.

If premium is paid for 1 year surrender value is 25% of fund value.

If premium is paid for 2 year surrender value is 40% of fund value.

So if you stop premium in the second year and suppose your fund value has not moved a single Rupee then you end up getting only 45% of your money because of allocation charges deducted.(this exclude other charges like mortality, fund management etc).

The story is similar for people who pays 3 years premium and want to surrender.

It charges from 50 % to 95 % for 3 years to 9 years period.

From 10th year onward there is no surrender charge (if one look at the minimum term which is also 10 years).

So strict restriction on surrendering of the policy in between the term.

No of years premium paid

Surrender value as % of unit value

3 years

50%

4 years

60%

5 years

70%

6 years

80%

7 years

85%

8 years

90%

9 years

95%

10 years onwards

100%

Conclusion:

The ultimate goal of this policy to Return the investment with a chance of high capital appreciation and policy features addresses them nicely.

No doubt that this policy has few cool as well as bold features like return of Guaranteed Value and Death benefit as Sum of Guaranteed value along with Sum Assured.

But at the same time this policy has so many restrictions on partial withdrawal and surrender.

Allocation charge in the initial years is also very high.

There are only one fund options which also offer very low return.

So until and unless you have specific reason, avoid this policy and instead buy ULIP policy which provide you multiple fund option and if you are more concerned about the Guaranteed return part then invest your money in that fund which has portfolio similar to this plan.

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3 comments:

Shella said...

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


Deborah

Term Life Insurance

Can you give any suggestion for this:

I am having ICICI Investshield cash back policy.Completed for 5 years.Now i would like to stop the policy.How much money i would like to get back

Admin said...

in case 5 years premium is paid, you will get 70% of fund value as surrender amount. For eg: if your fund value is Rs 100000. you will get Rs. 70000 as surrender value

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