ICICI Pru Pinnacle is a unit linked insurance policy that offers the advantage of varying exposure to equities along with downside protection, so that your investments are protected in financially volatile times. It also offers a limited premium payment term while allowing you to enjoy insurance protection for a longer period.
ICICI Pru Pinnacle is similar to SBI Life's Smart ULIP, BSLI Platinum Plus and TATA AIG's Invest Assure apex.
All three plans guarantee the highest NAV on the maturity during the fixed term.
ICICI Pru Pinnacle guarantees highest NAV recorded on daily basis for the first seven years (from 24/10/09 to 24/10/16).
This policy has two distinct features.Addition of amount equal to 3% of fund value (not highest but prevailing NAV on maturity). This will enhance the return further.
Unlike other two plans (Smart ULIP and Invest Apex Assure), highest NAV is recorded on daily basis.
Features and benefits of ICICI Pru Pinnacle
Guaranteed NAV
With ICICI Pru Pinnacle, we guarantee the highest Net Asset Value (NAV) recorded on a daily basis, in the first 7 years of the fund, subject to a minimum of Rs.10. The guarantee will be applicable only at maturity. The period of 7 years starts from the date of launch of Pinnacle Fund and will end on the completion of 7 years (from 24/10/09 to 24/10/16).
At maturity, the higher of Fund Value (Units X NAV) and Guaranteed Value (Units X Guaranteed NAV) as on the maturity date shall be payable.
Scenario 1
Scenario 2
Number of Units at maturity (A)
50,000
50,000
Guaranteed NAV (B)
Rs.20
Rs.20
NAV on maturity date (C)
Rs.15
Rs.25
Guaranteed Value (A x B)
Rs 10.0 lacs
Rs 10.0 lacs
Fund Value (A x C)
Rs 7.5 lacs
Rs.12.5 lacs
Higher of (Guaranteed Value, Fund Value)
Rs. 10.0 lacs
Rs. 12.5 lacs
Not only this, ICICI Pru Pinnacle gives a boost of additional allocation amounting to 3% of Fund Value on the day of maturity (Guaranteed NAV will not be applicable to additional allocation)
Premium Payment Term
3 years
Minimum Premium
Rs.50,000 per annum
Modes of Premium Payment
Half yearly/Yearly
Minimum/Maximum Entry Age
8/ 65 years
Policy Term
10 years
Maximum Maturity Age
75 years
Minimum Sum Assured
5 x Annual Premium
Tax Benefit
Premium and any benefit amount received under this policy will be eligible for the tax benefit as per the prevailing Income Tax laws.
Guaranteed NAV: get the benefit of the highest NAV recorded on a daily basis, in the first 7 years of the fund, at maturity.
Limited premium payment term: pay premiums for only 3 policy years.
Additional allocation: added to your fund at maturity.
Death benefit: in the unfortunate event of death, the nominee receives higher of Sum Assured (reduced by partial withdrawals) and Fund Value.
Partial withdrawals: ensures liquidity from the 6th policy year onwards.
Tax benefits: avail tax benefits on the premiums paid and benefits received under the policy, as per the prevailing Income Tax laws.
A hawkish Reserve Bank of India (RBI), while staying away from hiking key rates like repo or reverse repo, hiked the statutory liquidity ratio (SLR) to 25% from 24%. The cash reserve ratio (CRR), the minimum amount banks need to park with the RBI, was also left unchanged.
Repo and reverse repo are rates at which the RBI lends to banks and vice versa while SLR is the minimum amount of cash, gold or bonds banks need to maintain with themselves.
By hiking the SLR, the RBI may be signalling its leaning towards tightening the accommodative monetary policy.
Late last year and during early 2009, the RBI and the government of India introduced various measures including cutting rates and releasing stimulus packages to boost lending and demand in the economy.
Inflation target upped
While the excess liquidity in the system may have succeeded in turning the economy back on the recovery track, it could be meet its first after-effect in the form of rising inflation soon. In fact, in the mid-term review, the RBI increased its March-end wholesale price index (WPI) inflation estimate to 6.5% with an upward bias, revised from its earlier target of 5%.
The estimate for FY10 gross domestic product (GDP) growth was left unchanged at 6.0% with an upward bias.
Also, the central bank cut its FY10 credit growth target to 18% from 20% that it had set in the July monetary policy review.
Stricter NPA norms
The RBI also asked banks to ensure that their total provisioning coverage ratio is not less than 70% and imposed a timeframe of September 2010 to achieve this target. The coverage ratio is a measure of the bank's ability to absorb potential losses for non-performing assets (NPAs) and is arrived at by calculating the loan loss reserve balance with the total non-performing loans.
Most banks will thus to significantly raise the coverage ratio.
Realty loans tighter
Among one of the discernible decisions that the RBI took in its review, it increased the provisioning requirement for advances to the commercial real estate sector classified as 'standard assets' from the present level of 0.40% to 1%, a move that makes lending to the sector tougher. "In view of large increase in credit to the commercial real estate sector over the last one year and the extent of restructured advances in this sector, it would be prudent to build cushion against likely non-performing assets," the RBI said.
RBI view
"There has been a discernible improvement in the global economic outlook since the First Quarter Review in July 2009," RBI Governor Duvvuri Subbarao said, in his review statement. "In India too, there are definitive indications of the economy reverting to the growth track. Accordingly, attention around the world, as also in India, has shifted from managing the crisis to managing the recovery."
Subbarao admitted that India faced a unique dilemma that developed nations did not face — that of inflation: "First, most of these countries do not face an immediate risk of inflation. Indeed, in several advanced economies, the concerns were about a possible deflation, which are just about waning. On the other hand, India is actively confronted with an upturn in inflation."
The governor said that, around the world, timing an exit from the stimulus packages was leading to an "active and animated" debate. "The 'exit' is a central issue in our policy matrix too. As the Reserve Bank has indicated in several public statements, our current monetary stance is not the steady state and we need to reverse the expansionary stance," he noted as he made cases for both beginning and deferring the monetary tightening.
Experts react
"We are very happy that the governor and the RBI have kept the main parameters of the policy intact. This is what we had hoped for," Finance Secretary Ashok Chawla said. "The composite number of inflation is expected to be about 6% by the end of March 2010. That is something, which will be kept in mind by the policymakers both here as well as the RBI as they have mentioned in their policy statement."
Reacting to the monetary policy, HDFC Bank's Chief Economist Abheek Barua said the hike in SLR would support the large borrowing programme of the Centre and states. "I see the RBI hiking the CRR in December 2009 or January 2010," he said.
The RBI upping the provision for lending to real estate will affect affordable housing, realty projects, HDIL said. "We will have to up prices to nullify the RBI hike," a clearly distraught HDIL said.
— With inputs from CNBC-TV18 and agencies Published on Tue, Oct 27, 2009 at 11:23 , Updated at Tue, Oct 27, 2009 at 20:15 Source : Moneycontrol.com
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