LIC Index Plus Plan: LIC Index Plus Plan Review

LIC Index Plus Plan

LIC's Index Plus is a new unit-linked life insurance policy that was released this week by the Life Insurance Corporation of India (LIC). It is a regular-premium, non-participating, individual life insurance plan that provides savings on life insurance while the policy is in effect.

LIC Index Plus Plan Details:

There is life insurance coverage for as long as the LIC Index Plus policy is in effect. Here's what the policy brochure on the life website says: "Refund of mortality charges for life insurance cover, minus any extra amount chargeable under the policy due to underwriting decision and tax charges levied on the mortality charges on survival until maturity." At the end of certain policy terms, Guaranteed Additions equal to a certain percentage of the Annual Premium will be added to the Unit Fund and used to buy units.

The Minimum Premium Amount:

The premium payment method for a year is Rs 30000.

The premium payment method every six months is Rs 15000.

The premium payment method for a year is Rs 7500.

The premium payment method every month (NACH) is Rs 2500.

When Can You Make a Partial Withdrawal?

After the 5-year lock-in period ends from the date when the policy is first issued, the units can be partially withdrawn when the conditions listed below are met:

Only when the Life Assured is at least 18 years old will partial withdrawals be allowed for minors.

Fixed amounts or fixed numbers of units should be used for partial withdrawals.

In each policy year, the following is the maximum amount of a partial withdrawal, expressed as a percentage of the fund: Policy Year Percentage of Unit Fund from 6th to 10th- 20%, 25 percent from 11th to 15th, from 16th to 20th- 30% and 35% for the 21st through the 25th.

A partial withdrawal is allowed as long as there is at least a minimum balance of 4 annualized premiums for annual premiums less than Rs 48,000/- and 3 annualized premiums for all other accounts. Partial withdrawals that would lead to the end of a contract are not allowed.

How Will the Death Benefit be Given Out?

The death benefit can be paid out in one lump sum or over time. If the Settlement Option is chosen, it will be paid out in the way chosen by the Policyholder or Life Assured.

What Exactly is the Benefit of Maturity?

If Life Assured lives past the maturity date, they will get an amount equal to the Unit Fund Value on the maturity date.

When Do You Get Paid for Guaranteed Additions?

If the insurance is still in effect, which means that all premiums have been paid, sure-fire additions will be given. Guaranteed additions, equal to a certain percentage of the annualized premium, will be made to the unit fund at the end of certain policy years, as long as all premiums have been paid and the policy is still in effect.

What is the LIC Index Plus Policy's Death Benefit?

If the life assured dies before the maturity date, even during the grace period, and the policy is still in effect, then.

Death of the Life Assured before the Date of Commencement of Risk: The Unit Fund Value on the date of death notification will be paid out.

It's important to know that any death charges, accident benefit charges, policy administration charges, or tax charges that happened after the date of death will be added back to the Unit Fund Value that was available on the date of death notification and sent back to the nominee or beneficiary with the death benefit.

If the Life Assured dies after the start date of the risk:

Any of the following amounts will be paid out: the highest amount of the Basic Sum Assured minus any partial withdrawals made in the two years before the death; or

Value of the unit fund as of the date of death notification; or 105% of all premiums received up to the date of death, minus any partial withdrawals made in the two years before the date of death.

If you’re interested further in the LIC Index Plus Plan, let us know and we’d be happy to help!