ICICI Pru Signature Pension Calculator

ICICI Pru Signature Pension Calculator

ICICI Pru Signature Pension (UIN: 105L194V03) is a unit-linked, non-participating pension plan. Instead of promising a fixed guaranteed corpus, it invests your premiums (net of charges) into market-linked funds, and lets that Fund Value grow over your chosen deferment period until you retire ("vest"). This calculator projects your Fund Value, the plan's signature Pension Booster benefit, your tax-free commutation, and the annual pension you could expect to start drawing.

How the plan works

• Premiums build a fund. Each year (or each installment, if you pay half-yearly/quarterly/monthly), your premium is reduced by a premium allocation charge and the rest is invested as fund units.
• Charges are deducted from the fund. A policy administration charge and a mortality charge (for the small life cover carried during deferment) are deducted from the fund each year before the year's market-linked growth is applied.
• The fund grows with the market. Because returns aren't guaranteed, ULIP illustrations are conventionally shown at two benchmark rates set by IRDAI norms: 4% p.a. (conservative) and 8% p.a. (optimistic).
• Pension Booster. At vesting, ICICI Prudential adds back a Pension Booster equal to the sum of every premium allocation, administration, and mortality charge deducted over the whole term (excluding taxes) - effectively refunding the plan's charges on top of the Fund Value.
• Vesting Benefit = Fund Value + Pension Booster.
• Commutation. You may take up to 60% of the Vesting Benefit as a tax-free lump sum. The remaining balance must be used to purchase an annuity (from ICICI Prudential or another insurer via the open market option) that pays you a regular pension.

The formula

For each policy year y from 1 to the Term to Vesting N:

$$NetPremium_y = Premium_y \times (1 - AllocationRate_y)$$ $$FundValue_y = (FundValue_{y-1} + NetPremium_y - AdminCharge_y - MortalityCharge_y) \times (1 + GrowthRate)$$

At vesting:

$$PensionBooster = \sum_{y=1}^{N} (AllocationCharge_y + AdminCharge_y + MortalityCharge_y)$$ $$VestingBenefit = FundValue_N + PensionBooster$$ $$CommutedLumpSum = VestingBenefit \times \frac{Commutation\%}{100}$$ $$AnnualPension = (VestingBenefit - CommutedLumpSum) \times AnnuityRate$$

Worked example

Suppose you enter at age 35, choose a Vesting Age of 60 (a 25-year term), pay an Annualized Premium of ₹1,00,000 for a 10-year Premium Payment Term, assume the 8% p.a. optimistic growth scenario, and commute 60% at vesting.

Over the 25 years, your ₹10,00,000 in total premiums (net of allocation charges) compounds inside the fund at 8% p.a., while admin and mortality charges are deducted annually. At vesting, ICICI Prudential adds back the Pension Booster (all charges deducted over 25 years) on top of the resulting Fund Value. You then commute 60% of that Vesting Benefit tax-free, and the remaining 40% is used to purchase an annuity - the calculator estimates your resulting annual pension using an illustrative age-based annuity rate.

How to use this calculator

1. Enter your Age at Entry and the Vesting Age at which you want your pension to start - the difference is your Term to Vesting.
2. Enter your Annualized Premium and choose a Premium Payment Term (5, 7, 10 years, or Regular Pay until vesting) and Payment Mode.
3. Pick an Assumed Fund Growth Rate - try both 4% and 8% to see the range of outcomes.
4. Set the Commutation percentage you'd take as a tax-free lump sum at vesting (up to 60%).
5. Review the Fund Value schedule, Pension Booster, Vesting Benefit, commuted lump sum, and estimated annual pension.

All charge rates, mortality rates, and annuity rates used here are illustrative and modeled on the general shape of ULIP pension plans - not ICICI Prudential's official rate card. Always refer to the official benefit illustration and policy document before purchasing.