There is a new plan “ICICI Pru Health Saver” in market. This is being called as ULIP and which boast of availing tax benefits u/s 80D for the entire amount invested.
Being a ULIP, Because of benefits u/s 80D It looks attractive.
Please analyze this plan and give your expert opinion about it.
Many Thanks for your time.
Dear Vivek, earlier the combo of Health Plan & ULIP was available from LIC as well as Reliance but in both these policies, the 80D benefit was not available on investment part. So ICICI Prudential Life Ins. cos. has moved with this cleverly drafted policy. Here the investment part of ur prem. or in other words fund value can only be redeemed against medical treatment/expenses. This policy is a combo of usual mediclaim policy & ULIP. Just dig deep into the skin of this policy & u `l come to know the real truth.
First understand what this policy offers?
apart from a normal mediclaim benefit, due to investment component from 3rd policy years onwards u can claim more than ur standard Sum assured with a ceiling set by company. Say ur original SA is 3L Rs, after completing 3 policy years u can claim a normal claim of 3L rs. under mediclaim benefit & another 20% of ur accumulated fund value. In other words u can redeem ur fund upto 20% value of fund. This fund value ceiling `ll increase with the years pass & after 10 policy years u can claim 100% of fund value.
As per the product brochure of this plan, This policy can be taken as individual plan as well as family floater plan.
For individual Plan – Min. entry age is 25 years completed & max. age is 55 years.
For family floater Plan – Min. entry age is 90 days & max. age is 55 years.
In each of the above policy the maturity age is common i.e. 75 years.
Here r the negative aspects of this plan.
1. High Prem. allocation charges – 20% for 1st year, 2 & 3 year 9%, 4-10 years 2% & Nil from 11 year onwards.
2. In case of family floater option, in case of death of primary insured (the eldest member of family), the policy `ll be terminated immediately.
3. Regular prem. pmt. is compulsory for first 5 years for cover continuance option i.e if u don`t want to pay prem. in future to keep policy in force u `ll have to pay prem. for first 5 years.
4. No surrender of policy is allowed except the first 15 day free look period window.
5. Ins. charges for general mediclaim policy as well as policy admin charges `ll be recovered by cancellation of UNITs which `ll impact u severely in prolong bearish phases like the current one.
6. For individual plan option the mly. policy admin charge is 60 Rs. where as for family floater option the same is 90 Rs.
7. A long list of exclusion, which i can`t post here in this limited space of MMB.
8. Actually the health saving option of this policy is similar to our general practice of dipping into our savings to sat off the medical bills.
9. Plz. note the prem. for general mediclaim benefit (known as Hospital insurance benefit in this policy) `ll be charged on ur actual age every month by cancellation of ur UNITs. this is not the case in normal mediclaim policies of Gen. ins. cos. where u pay prem. as per age band of say 31-35, 36-40…… Again this monthly cancellation of UNITs `l impact more in case of bear phases as more UNITs `ll be cancelled to pay insurance prem. per month.
In my view –
The same effect of mediclaim & saving can be achieved by purchasing a cheaper mediclaim policy as well as investing the surplus amount as per our comfort level in Eq. or Debt funds or anywhere else. So this policy should be avoided.