ICICI Prudential Life Insurance’s new unit-linked insurance plan (ULIP) with a systematic investment plan (SIP) option can be a viable choice for investors seeking a combination of life insurance and investment.

The key benefits of this ULIP with SIP option include:

  1. Disciplined Investing: The SIP option allows investors to invest a fixed amount of money at regular intervals, promoting disciplined investing and helping to reduce the impact of market volatility.
  2. Flexibility: Policyholders can choose from a range of investment funds, allowing them to allocate their investments according to their risk tolerance and financial goals.
  3. Life Insurance Coverage: The plan provides a life insurance component, which offers a death benefit to the policyholder’s nominees in the event of their demise.
  4. Tax Benefits: Investments in ULIPs are eligible for tax deductions under Section 80C of the Income Tax Act, and the maturity proceeds are tax-free under Section 10(10D).
  5. Liquidity: The SIP option can be paused or resumed, and partial withdrawals are allowed after the completion of the lock-in period, providing liquidity in case of emergencies.

However, it’s essential to consider the following factors before investing:

  1. Charges and Fees: ULIPs come with various charges, including premium allocation charges, administration charges, and fund management charges, which can eat into the investment returns.
  2. Market Risks: As the investments are linked to the market, there is a risk of losing capital if the market performs poorly.
  3. Lock-in Period: ULIPs typically have a lock-in period of 5 years, during which the policyholder cannot withdraw the entire amount.
  4. Surrender Charges: If the policyholder surrenders the policy before the completion of the lock-in period, they may be subject to surrender charges.

To determine whether ICICI Prudential Life Insurance’s new ULIP with SIP option is worth investing in, consider the following:

  1. Assess Your Financial Goals: Determine whether the plan aligns with your financial goals, risk tolerance, and investment horizon.
  2. Evaluate the Charges: Calculate the total charges and fees associated with the plan and assess whether they are reasonable.
  3. Review the Investment Options: Assess the range of investment funds offered and whether they align with your investment objectives.
  4. Consider Alternative Options: Compare the ULIP with other investment options, such as mutual funds or traditional life insurance plans, to determine which one is more suitable for your needs.

Ultimately, whether ICICI Prudential Life Insurance’s new ULIP with SIP option is worth investing in depends on individual circumstances and financial goals. It’s recommended to consult with a financial advisor to determine the suitability of this investment option.

by | Oct 12, 2025 | ICICI Prudential Life, Insurance

ICICI Prudential Life has introduced a new ULIP policy called Smart Insurance Plan Plus, which offers a SIP+ smart insurance plan option. The policy is targeted at young investors and allows them to invest in multiple funds across equity, debt, and hybrid categories. The policy has two variants: Wealth and Assure, with different premium payment terms and policy terms. The minimum premium is ₹12,000 per annum for those aged 35 or less and ₹1.2 lakh a year for those above 35.

The policy offers 25 fund options, and investors can choose from four different investment strategies, including fixed portfolio, target asset allocation, trigger portfolio strategy, and lifecycle-based portfolio strategy. The policy also allows unlimited switching between funds without charges. The charges associated with the policy are relatively low, with no policy administration and premium allocation charges levied. The only charge is a fund management fee of 1.35% per annum.

The performance of ICICI Pru Life’s funds is impressive, with 75% of the funds rated 3, 4, or 5-star by Morningstar. The top 10-15 funds have given annualized returns of 20-22% over the past five years and 11-12% over the past 10 years. However, it’s essential to note that the net returns for ULIP policyholders would be lower due to mortality charges.

While the policy has some attractive features, it’s essential to keep insurance and investment separate for healthy financial planning. A term insurance policy with adequate sum assured is sufficient for covering risk, and mutual funds are ideal for investments, especially for young investors. However, if you have a surplus after exhausting all your regular investment options, you can consider parking tiny sums in the ULIP, provided you have separate term and medical policies and don’t depend on the ULIP for risk cover.

In conclusion, the ICICI Pru Smart Insurance Plan Plus has some interesting features, but it’s crucial to weigh the pros and cons before investing. It’s essential to prioritize separate term insurance and medical policies for risk cover and consider mutual funds for investments. The ULIP can be considered as a supplementary investment option, but only after exhausting all other regular investment options.