Term insurance coverICICI Pru iProtect Smart is a term insurance plan, which, according to the company, has become a top-selling plan online of ICICI Prudential Life Insurance ever since it was launched. This term plan offers protection for your family and critical illness cover for you. One of the striking features of this product is the up to 99-years coverage. RupeeIQ reviews the product and tells you how good is it.

Term insurance basics

In India, life insurance, thanks to LIC agents, is often looked at as an investment. Over the past few decades, this insurance cum investment angle has been successfully pitched by agents to get customers. But, people are beginning to realise that as an investment, insurance products (unless they are unit linked insurance plans) are not that great in terms of returns. This is why term insurance has come to the fore.

For those who don’t know, term life insurance plans provide a high cover at an affordable price. These are very cheap plans that promise you a comparatively large sum of money to be given to your dear family/nominee if, unfortunately, you die during the coverage period. For instance, a 30-year old can get Rs 1 crore life cover for a policy tenure of 69 years at an annual premium of Rs 28,175. The same for a 35-year old would be about Rs 31,888 for a tenure of 64 years.

Term covers do not have any maturity value, which means if you survive the policy period you/nominee will get back nothing. But smart people know that they do not really need anything from a term cover. This is because term insurance is all about protecting your dependents from financial risks in a scenario you are no longer alive. A good sum of money would help your dependents. If you survive, there are high chances you would have already taken care of them. (However, there is a term insurance plan – Tata AIA Sampoorna Raksha Plus – which gives your premium back. We have covered it here.)

The policy features

As a term policy, ICICI Pru iProtect Smart is aimed at young people. It also has an option to provide health cover against 34 critical illnesses. The claim for this protection is paid on first diagnosis itself without any hospital bills. The policy also has an option to provide accidental death cover up to Rs 2 crore. You have to be minimum 18 years of age to buy this policy. You cant buy this policy if you are above 65 years of age.

Here are the major benefits of the policy:

1. Affordable premiums – ICICI Pru iProtect Smart offers term cover at ‘affordable’ premiums. It does offer one of the cheapest premiums.


2. Cover up to 99 years – The best time to buy a term cover is when you are young because you pay low premium. ICICI Pru iProtect Smart has the provision to get you covered till the age of 85 and you also have the option to get whole life cover till age 99. The cover till 99 years means if you are 25 years of age now, you can get cover for the next 74 years.

Of course, ICICI Pru iProtect Smart is not the only term policy to provide longer covers. Peers like HDFC Life 3D Plus Life Long Protection option, Aegon Life iTerm, Tata AIA Life Sampoorna Raksha and PNB Mera Term Plan also provide quite longer covers.

Do note that it is advisable that you take term life cover for your earning years. This means your term cover tenure should be maximum till 60-65 years of your age. If you survive that long, you would have repaid all your loans, built a good corpus for dependents and provided the financial security your family deserves. As you grow old, the premium becomes higher. A 60-year old person opting for a Rs 1 crore cover would have to pay more than Rs 1 lakh a year in premium.

3. Critical illness option benefit

Term life insurance is for your family’s security. But what happens when a critical illness strikes and your life hangs in balance? To avoid this situation, life insurers these days offer a critical illness fixed benefit cover. ICICI Pru iProtect Smart offers optional health insurance cover for 34 critical illnesses. It gives claim payout on the first diagnosis of any of the covered 34 critical illnesses. So, no hospital bills required for claims. Only a photocopy of your diagnosis report is enough in most cases.

Let us understand more about this critical illness optional cover. Which are the 34 critical illnesses covered? The ICICI Pru iProtect Smart covers cancer of specified severity (diagnosis must be supported by histological evidence of malignancy, angioplasty (maximum benefit payable under a policy is restricted to Rs 5 lakh), first heart attack – of specified severity etc.

It also covers open heart replacement or repair of heart valves, surgery to aorta heart and artery benefit, cardiomyopathy, primary pulmonary hypertension, open chest CABG, blindness, chronic lung disease, chronic liver disease major organ benefit, kidney failure requiring regular dialysis, major organ/ bone marrow transplant, apallic syndrome, benign brain tumour, brain surgery, and coma of specified severity.

Also, covered are major head trauma, permanent paralysis of limbs, stroke resulting in permanent symptoms brain and nervous system benefit, Alzheimer’s disease, motor neurone disease with permanent symptoms, multiple sclerosis with persisting symptoms, muscular dystrophy, Parkinson’s disease, poliomyelitis, loss of independent existence, loss of limbs, deafness, loss of speech (others), medullary cystic disease, systematic lupus eryth with renal involvement, major burns and aplastic anaemia. Please read the brochure elaborately to understand the nature of the critical illness and what is excluded.

Do note that the critical illness benefit is an accelerated benefit and the death benefit will be reduced by the critical illness cover paid to the policyholder. The future premiums payable for the residual critical illness benefit will reduce proportionately. In case the critical illness benefit is equal to the death benefit, the policy will terminate on payment of the critical illness benefit.

The critical illness benefit comes at an extra cost. In case of iProtect Smart option, the cover against 34 critical illnesses for a 30 year seeking cover till 60 years of age comes for Rs 352 per month. Other policies provide the same. For instance, HDFC Life 3D Plus Life option offers cover against 19 critical illnesses for Rs 255. Max Life Online Term Plus offers cover against 40 critical illnesses for Rs 281. Tata AIA Life Sampoorna Raksha provides cover against 59 critical illnesses for Rs 241. Kotak Life e-Term Plan offers cover against 37 critical illness for Rs 441.

4. Multiple payout options – Term policies pay out money in the event of policyholder’s death. That is the plain-vanilla way of giving money. But needs of dependents can vary. So, iProtect Smart offers payout in either of 4 ways.

a. Lumpsum – This is the most preferred option. Many families, struck by the unfortunate death of the main breadwinner, seek refuge in lump sum money.

b. Monthly income – In this option, the claim amount is paid out in form of a monthly salary/income. It helps take care of monthly financial needs.

As much as 10% of the benefit amount is payable every year for 10 years. This will be paid in equal monthly installments in advance at the rate of 0.8333% of total benefit amount. The beneficiary can also advance the first year’s income as lump sum. The monthly income will start from the subsequent month for nine years at the rate of 0.80% of the total benefit amount.

c. Increasing income – In this payment option, the claim/benefit amount is payable in monthly installments for 10 years starting with 10% of the benefit amount per annum in the first year. The income amount will be increased by 10% per annum simple interest every year thereafter.

d. Lumpsum + income – This is a new option. Here you have the flexibility to split the life cover amount that you want your nominee to receive as a lump sum and the remaining life cover will be paid in equal monthly payments for 10 years.

5. Terminal illness payment – ICICI Pru iProtect Smart works in case the policyholder is down with terminal illnesses. The terminal illnesses cover in the newly launched ICICI Pru iProtect Smart now covers AIDS too. In this benefit, if the life assured is diagnosed with a terminal illness like AIDS, full/ entire life cover will be paid to the nominee/legal heir immediately. The money can be used to repay any liability etc.

6. Add accidental cover anytime – Accidents happen all the time. Insurance can’t stop them, but it can mitigate the financial effects. ICICI Pru iProtect Smart lets you add an accidental cover of your choice during purchase or, even after purchase. For example, if you buy life cover of Rs 1 crore with accident benefit of Rs 50 lakh, your nominee will get Rs 1.5 crore in case of death due to an accident. Maximum accident cover available with this benefit is Rs 2 crore.

7. Protect policy from financial creditors – What if the sum assured in your term plan is not given to your near ones, like to your wife or children? Yes, this can happen if relatives /creditors wrongfully claim the insurance amount. ICICI Pru iProtect Smart gives you the option to protect it by buying it under the Married Women’s Protection Act (MWP Act). This will help in the payment of full life insurance claim amount to your wife and/or children.

Do note that getting a policy assigned under MWP Act is easy. All the proposer has to do is fill up an MWP addendum along with the life insurance proposal form. That’s it. You can now avail MWP act in life insurance. The MWP addendum form is available with the insurance agent or can be downloaded from the insurance company’s website. Remember beneficiaries once stated in the form cannot be changed later. You can get an insurance policy of any life insurance company under the MWP Act.

RupeeIQ take – The ICICI Pru iProtect smart plan seems a comprehensive offering packed with all the protection elements you would need from a term cover. The company has a good financial rating and is well-equipped to pay the claim amount when required. It also has a high claim settlement ratio, which can act as an assurance that a genuine claim will be paid. You can pay the premium under single pay, limited pay and regular pay options, which gives added flexibility

Disclaimer – Please note that investors are requested to consult their financial, tax and other advisors before taking any decision.

Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. He can be contacted on kumarsroy@rupeeiq.com