Khota Paisa

Review : ICICI Pru ACE Plan

Posted in Reviews by khotapaisa on May 9, 2010

I must admit that I was introduced to this plan by one of the blog readers. And once I went thru the details of the plan, it really surprised me. This plan has some really attractive terms making it a relatively cheap ULIP. Though there is nothing sunstancially new in this plan, what makes it more attractive is that it doesn’t have many too many fine-prints for the investor to worry about, making it simpler.

The plan has no premium allocation charge. The policy administration charges are 720/- per annum while the fund management charge (for equity fund) is low at 1.35%. By comparison, most of the equity mutual funds charge you 2-2.25% for fund management. Overall these charges result in you getting a higher net return over long term. The fund offers two investment strategies namely Trigger Portfolio & Fixed Portfolio Strategy. In Trigger Portfolio Strategy, the equity-to-debt ratio is always mentained at 3:1 while in Fixed Portfolio Strategy, the asset allocation is the resposibilty of the investor. Since it makes sense to invest 100% in equity during early years of investment, you make like to opt for Fixed Portfolio giving you the flexibilty to manage your equity exposure. Though for the layman, the Trigger Portfolio offers a simpler investment strategy. The plan also offers 2% loyalty bonus from the 6th years of policy.

On the downside, the fund charges 1% load on top-up premium, though it is not a big issue. Infact people using the top-up mechanism frequently would prefer it as there seems to be no upper limit to the top-up. Another limitation can be stated as the low free switches available every year, though in practice it shouldn’t effect the investor much. Some of the policy terms encourage you to invest regularly & for long, which is good for the investor.

Overall, it a comparatively low cost ULIP. So if you are looking for a plain, low-cost ULIP, you may like to consider this plan.