Recently, the Life Insurance Corporation of India (LIC) introduced a new investment plan called the LIC Index Plus Plan. This plan is for individuals and involves regular premium payments. According to LIC, the plan provides both life insurance coverage and savings for the entire policy term.
After the initial five-year lock-in period, policyholders have the option to partially withdraw units under certain conditions. Additionally, LIC stated that guaranteed additions, calculated as a percentage of the annualized premium, will be added to the unit fund after specific policy years for policies in force.
To qualify for the insurance plan, individuals must be at least 90 days old and can be up to either 50 or 60 years old, depending on the basic Sum Assured, as of their nearest birthday.
For individuals between 90 days (completed) and 50 years old (nearer birthday) entering the plan, the Basic Sum Assured is set between 7 and 10 times the Annualized premium. The Basic Sum Assured for individuals entering the age category ranging from 51 to 60 (nearer birthdate) is set at seven times the Annualised premium.
The plan specifies that individuals must be at least 18 years old (completed) but no older than 75 or 85 years old (nearer birthday) at the time of maturity, depending on the chosen Basic Sum Assured. These age limits are intended to offer flexibility and cater to the varied needs of policyholders.
The insurance plan provides a maximum term of 25 years and a minimum policy duration of 10 or 15 years, depending on the annualised premium. The policy term corresponds with the premium payment term.
The minimum premium varies depending on the chosen payment frequency. It is set at Rs 30,000 for Yearly payments, Rs 15,000 for Half-Yearly payments, Rs 7,500 for Quarterly payments, and Rs 2,500 for Monthly payments through NACH. There is no maximum amount you can pay for the premium, but this depends on the decision made during the underwriting process. This gives policyholders the freedom to choose the duration and how often they want to make payments, based on what works best for their finances and needs.
Policyholders have the option to choose between two funds for investing premiums: the Flexi Growth Fund and the Flexi Smart Growth Fund. These funds primarily invest in selected stocks that are part of either the NSE NIFTY 100 index or the NSE NIFTY50 index. Policyholders can select one of these funds initially and switch between them as needed.
This non-participating plan offers several features to meet the varied needs of policyholders. It allows for partial withdrawals, subject to certain conditions.
If the life assured survives until the date of maturity, an amount equal to the unit fund value as of that date is paid out. The payout in case of the life assured’s death depends on whether the death occurs before or after the date of commencement of risk.
Policyholders may receive a refund of mortality charges based on the policy’s terms and conditions. They can also opt for LIC’s Linked Accidental Death Benefit rider for additional protection. Additionally, after completing a 5-year lock-in period, policyholders can partially withdraw units, subject to specific conditions.
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