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LIC Nivesh Plus Plan: Should You Invest in this ULIP?

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LIC Nivesh Plus is a single Premium unit-linked policy that offers the ability to increase your money and to have life cover. LIC is a powerhouse in conventional life insurance policies and has not been very involved in the unit-linked product area. The output of the funds in which you invest the money will decide the total return on your investment. This plan gives you the option of selecting the sort of Sum Insured at the start, as well as investing the premium in one of four different types of investment funds. After deducting the Premium Allocation Fee, a single premium can buy units of the Fund category selected. The Unit Fund is subject to a variety of payments, and the value of units rises or falls in response to changes in Net Asset Value (NAV).

Key Features of LIC Nivesh Plus Plan
 

Key Features of LIC Nivesh Plus Plan

Death Benefit

On death before the Date of Commencement of Risk:

An amount equal to the Unit Fund Value shall be payable.

On death after the Date of Commencement of Risk:

Basic Sum Assured, less any partial withdrawals made in the two years leading up to the date of death or Unit Fund Value.

Depending on the settlement Option is selected, the death benefit will be paid in either a lump sum as described above or in instalments.

Maturity Benefit

If the life assured survives the maturity date, a payment equal to the Unit Fund Value will be made.

Guaranteed Additions

Guaranteed Additions as a percentage of Single Premium, as shown in the table below, will be added to the Unit Fund at the end of the policy years specified in the table below:

End of Policy Year 6 - 3% Guaranteed Additions

End of Policy Year 10 - 4% Guaranteed Additions

End of Policy Year 15 - 5% Guaranteed Additions

End of Policy Year 20 - 6% Guaranteed Additions

End of Policy Year 25 - 7% Guaranteed Additions

The allocated Guaranteed Addition will be converted to units and attributed to the Unit Fund based on the NAV of the underlying Fund form as of the date of such addition.

What is the Basic Sum Assured?

What is the Basic Sum Assured?

You have the flexibility to choose Basic Sum Assured at the inception. The option once selected cannot be altered. The Sum Assured options are:

Option 1: 1.25 times of Single Premium

Option 2: 10 times of Single Premium

The funds available in this plan are as follows:-

  • Bond Fund
  • Secured Fund
  • Balanced Fund
  • Growth Fund

There is a free-look period provided by the company after which the policy can be returned to the company.

Fund Composition

Fund Name Government Guaranteed Securities Short Term Investments Listed Equity Shares Risk Profile
Growth 20% to 60% 0% to 40% 40% to 80% High
Balanced 30% to 70% 0% to 40% 30% to 70% Medium
Secured 45% to 85% 0% to 40% 15% to 55% Low-Medium
Bond Fund 0% to 60% 0% to 40% Nil Low
What are the Charges under LIC Nivesh Plus Plan?
 

What are the Charges under LIC Nivesh Plus Plan?

Premium Allocation Charge

This is the portion of the premium that is allocated to charges from the total premium paid. The following are the charges for allocation: • 3.30 percent for offline sales • 1.50 percent for online sales.

Mortality Charge

The Mortality Charge is the cost of life insurance coverage that is age-specific, and it will be deducted from the Unit Fund Value at the start of each policy month. Monthly Mortality Charges would be a twelfth of annual Mortality Charges.

Fund Management Fee

This is a charge that is calculated as a percentage of asset value and is adjusted by changing the Net Asset Value. Bond Fund, Secured Fund, Balanced Fund, and Growth Fund all have a unit fund yield of 1.35 percent per year.

• 0.50 percent of Unit Fund is set aside each year for the "Discontinued Policy Fund."

This is a fee that will be charged at the time of NAV calculation, which will be performed on a regular basis. The declared NAV will be net of FMC.

Switching Charge

This is a fee imposed when money is transferred from one segregated fund to another within the product. If there is a fee per switch, it must be paid at the time the switch is made. A total of four switches will be allowed free of charge during a policy year. A Switching Charge of Rs. 100 per switch would be applied to subsequent switches in that year.

Partial Withdrawal Charge

This is a fee imposed on the Unit Fund when it is partially withdrawn during the contract duration. On the date of partial withdrawal, a flat sum of Rs. 100/- will be deducted by cancelling the required number of units from the Unit Fund.

Discontinuance Charge

This Charge would be withdrawn by cancelling an appropriate number of units from the Unit Fund Value as of the Policy's termination date.

How LIC Nivesh Plus Works?

How LIC Nivesh Plus Works?

The Nivesh Plus plan from LIC is a single premium plan. As a result, you must pay a one-time payment that will be invested in the funds of your preference. You can then choose between 10 and 25 years for the policy's duration. You have two options when it comes to the amount of coverage you want. The amount of coverage determines whether or not you can receive tax benefits from this package, so choose carefully. The money you pay is invested in the funds of your choosing, from which you have four options. You will be assigned Units of these funds based on your investment amount and fund selection. This plan is available both online and offline.

Should you invest?

Should you invest?

Unit Linked Life Insurance premiums are subject to investments in stock market risks, and the NAVs of the companies can increase or decrease, depending on the performance of the funds and factors that influence the equity market.

The policy is terminated if the policy has been in force for a minimum of five years and the unit fund balance is not adequate for the recovery of the applicable costs, and, where applicable, the balance of the unit fund is repaid to the policyholder.

It is always advised that you keep your insurance and investment products apart. It is better to buy a term plan and invest in pure investment items such as PPF, mutual funds, etc.

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