ICICI Prudential Life QROPS Schemes

ICICI Prudential Life Insurance is one of the largest private Life Insurers in India and a popular provider of QROPS schemes in India. It is a joint venture between ICICI Bank Ltd., one of India’s largest private sector banks and Prudential Holdings Ltd., a leading international financial services provider in the world.

Three Plans offered by ICICI Prudential are recognized by Her Majesty’s Revenue and Customs (HMRC) as QROPS Schemes in India.

  1. ICICI Prudential Easy Retirement Plan
  2. ICICI Prudential Easy Retirement Single Premium(SP)
  3. ICICI Prudential Immediate Annuity

 A. ICICI Prudential Easy Retirement Plan

This is a Unit Linked Plan with a capital guarantee, offered by ICICI Prudential under QROPS Schemes in India. This is an accumulation plan, designed for those who are looking to contribute regularly to their retirement corpus. Since this Indian QROPS scheme is a market-linked plan, the returns vary according to the market performance in India.

Eligibility:

Minimum and Maximum Entry Age: 35-70 years

Minimum and Maximum Vesting Age: 55 years is the minimum age for vesting under Indian QROPS and maximum age is 80 years.

Premium Payments:

The premiums can be paid annually, bi-annually or monthly and single premium purchase is not allowed. The minimum premium payment term specified is either 5 years, 10 years or the policy term.

Top Ups – This policy allows the policyholder to invest any amount as Top-Up Premiums, 5 years before the vesting date, provided all the premiums due have been paid.

Policy Term:

The terms specified is 10,15,20,25 and 30 years.

The noteworthy feature of this plan is that the premium paying term can be less than the policy term. If this Indian QROPS scheme is purchased, the minimum premium payment term will be 5 years and minimum policy term will be 10 years or the policyholder attaining 55 years of age, whichever is later. This also provides the flexibility of increasing or decreasing the premium paying term, provided the minimum number of premiums have been already paid.

This Plan offers a choice of two Investment Options:

  1. Easy Retirement Balanced Fund – This Fund has Moderate risk profile and has exposure to Equities, Debt and Money Market Instruments.
  1. Easy Retirement Secure Fund – The risk profile of this Fund is Low and has exposure only to Debt and Money Market Instruments.

The policyholder has the option to invest in these funds in any proportion. The policy also provides Switch option, which enables the policyholder to switch between these funds, anytime during the policy term. There is a provision for Premium Redirection, which enables the policyholder to divert the future premiums to a different Fund than the one chosen at the time of purchase.

Vesting Benefits:

On vesting, the policyholder is entitled to an amount which is higher of the Fund Value or the Assured Benefit. The Assured Benefit of this policy is 101% of the sum of all the premiums paid and Top-ups if any.

Pension Boosters:

On completion of the tenth policy year and every fifth year thereafter, Pension Booster of 5% of the average daily total Fund Value over the preceding 12 months will be issued.

Death Benefit:

On the death of the policyholder, the nominee will receive the total Fund Value or Guaranteed Death Benefit of 105% of the sum of the single premium and Top-ups, if any, whichever is higher.

Charges:

The various charges applicable for this policy are listed below:

  1. Premium Allocation Charge – This charge will be deducted from the premium amount at the time of payment and varies between 0-3% of the premium amount in the first three years of the policy term, depending on the Premium Amount and the Premium Frequency. However, all the Top ups are subjected to a flat charge of 2%.
  1. Fund Management Charge – This charge will be 1.35% of Fund Value for both Easy Retirement Balanced Fund and Easy Retirement Secure Fund annually.
  1. Policy Administration Charge – This charge will be levied every month for the first 10 years of the policy, subject to a maximum charge of 6000 INR per annum. It varies from 0.6%-3% annually, depending on the Premium Amount and the Premium Frequency.
  1. Switching Charge – Fund switches, above four per year will be charged at INR 100 per switch.

The above charges are only for Purchase and Continuity of the policy. Additional charges may be levied for transfer of UK pension to QROPS in India.

Options on Vesting:

The Vesting Benefit should be used compulsorily to buy an Annuity Plan according to the Income Tax Act in India. The policyholder has the choice to either buy an annuity for the entire vested corpus or commute 1/3rd of the total corpus and utilize the rest to buy an annuity. The vesting year can be postponed subject to a maximum age of 80 years without any premium contributions.

Suitability:

For NRIs looking to transfer their UK pension to Indian QROPS Schemes, this plan is suitable if they are below 55 years, can make regular contributions for at least 5 years and need pension income starting 10 years later or when they attain 55 years of age.

B. ICICI Prudential Easy Retirement Single Premium(SP)

This is a Single Premium Unit Linked Plan with a capital guarantee, offered by ICICI Prudential under QROPS Schemes in India. This can be purchased only with a single Premium and specifically designed for those who have a lump sum to invest for retirement purpose. The returns on this plan vary according to the market performance in India.

Eligibility:

Minimum and Maximum Entry Age: 35-80 years

Minimum and Maximum Vesting Age: 55 years is the minimum age for vesting under Indian QROPS and maximum age is 90 years.

Premium Payments:

This policy can be purchased only by one-time lump sum payment, also known as Single Premium.

Top Ups – This policy allows any amount to be invested as Top-Up Premiums, provided they are paid 5 years before the vesting date.

For NRIs looking to transfer their UK pension to Indian QROPS, this Plan is suitable if they are looking only to grow their accumulated pension corpus, without making any regular contributions.

Policy Term:

The terms specified is 10,15,20,25 and 30 years.

The invested lump sum will be locked in for a period of 10 years. For an Indian QROPS scheme, the minimum policy term will be 10 years or until the policyholder attains 55 years of age, whichever is later.

This Plan offers a choice of two Investment Options:

  1. Easy Retirement Balanced Fund – This Fund has Moderate risk profile and has exposure to Equities, Debt and Money Market Instruments.
  1. Easy Retirement Secure Fund – The risk profile of this Fund is Low and has exposure only to Debt and Money Market Instruments.

The policyholder has the option to choose to invest in these funds in any proportion. The policy also provides Switch option, which enables the policyholder to switch between these funds, anytime during the policy term.

Vesting Benefits:

On vesting, the policyholder is entitled to an amount which is higher of the Fund Value or the Assured Benefit. The Assured Benefit of this policy is 101% of the sum of the single premium paid and top ups, if any.

Pension Boosters:

On completion of the tenth policy year and every fifth year thereafter, a guaranteed Pension Booster of 2% of the average daily total Fund Value over the preceding 12 months will be issued.

Loyalty Additions:

Guaranteed Loyalty Addition of 0.25% of the average daily total Fund Value over the previous 12 months, will be added on the completion of the sixth policy year and every year thereafter.

Death Benefit:

On the death of the policyholder, the nominee will receive the total Fund Value or Guaranteed Death Benefit of 105% of the sum of the single premium and Top-ups, if any, whichever is higher.

Charges:

The various charges applicable are listed below:

  1. Premium Allocation Charge – Nil. However, all the Top ups are subjected to a flat charge of 2%.
  1. Fund Management Charge – The annual Fund Management Charge will be 1.35% of Fund Value for both Easy Retirement Balanced Fund and Easy Retirement Secure Fund.
  1. Policy Administration Charge – This charge will be levied every month for the first 5 years of the policy, subject to a maximum charge of 6000 INR per annum. It varies from 0%-1.68% annually, depending on the Premium Amount.
  1. Switching Charge – Fund switches, above four per year will be charged at INR 100 per switch.

The above charges are only for Purchase and Continuity of the policy. Additional charges may be levied for transfer of UK pension to QROPS in India.

Options on Vesting:

The Vesting Benefit of this Plan should be used compulsorily to buy an Annuity Plan according to the Income Tax Act in India. The policyholder can either buy an annuity for the entire vested corpus or commute 1/3rd of the total corpus and utilize the rest to buy an annuity.

The policyholder also has the benefit of postponing the vesting year subject to a maximum age of 90 years.

Suitability:

For NRIs looking to transfer their UK pension to Indian QROPS Schemes, this is suitable if they are below 55 years, wish to add growth to their pension corpus and need pension income 0 years later or when they attain 55 years of age.

C. ICICI Prudential Immediate Annuity

ICICI Prudential offers this Immediate Annuity Plan to draw pension income under the recognized QROPS Schemes in India. This plan makes regular payments at the chosen frequency until the end of life of the annuitant or the survivor, as opted. This is designed only to hand out pension income to the annuitants and not for the growth of the pension corpus. There is no option for draw-down as the invested amount becomes inaccessible.

Eligibility:

Minimum Age for Entry – 55 years for QROPS schemes in India

Maximum Age for Entry is 100 years.

Premium Payment:

There is no minimum purchase price. However, the purchase amount should yield a minimum pension of 100 INR annually, for the option chosen.

Payout Modes:

The annuitant can receive the payments either annually, bi-annually, quarterly or monthly.

Annuity Options:

  • Life Annuity: Annuity will be paid only until the death of the annuitant.
  • Life Annuity with Return of Premium: Annuity will be paid until the death of the annuitant, after which the nominee will receive 100% of the purchase price.
  • Joint Life Last Survivor: Annuity will be paid until the end of life of the last survivor of the joint annuity.
  • Joint Life Last Survivor with Return of Purchase Price: Annuity will be paid until the end of life of the last survivor of the joint annuity. On the death of the last survivor, the nominee will receive 100% of the purchase price.
  • Annuity guaranteed for 5,10,15 years and payable for life thereafter: Annuity will be paid compulsorily for the guaranteed period, irrespective of the annuitant’s survival and continues until the death of the annuitant.

Under Indian Income Tax Act, income received from and annuity plan is taxable under “Income from Other Sources” according to the slab rates.

Suitability:

This immediate annuity plan, a recognized QROPS scheme in India, is suitable for those who have accumulated UK pension corpus and looking to draw from their pension corpus immediately.

For further information about QROPS click below to download your FREE QROPS Guide.