LIC of India launched its latest ULIP offering, LIC Index Plus Plan (Plan No. 873), on 6th February 2024. This plan combines the power of equity market-linked returns with the security of life insurance, all under one comprehensive unit-linked insurance policy. It is a Regular Premium, Non-Participating, Unit Linked, Individual Life Insurance Plan designed to provide both insurance protection and wealth creation over the long term.
Let’s explore the plan in detail.
🔍 What is LIC Index Plus Plan 873?
LIC Index Plus is a market-linked life insurance plan that helps you grow your wealth by investing in top-performing stocks that are part of the NSE NIFTY 50 or NIFTY 100 indices. This plan also offers guaranteed additions, switching options, partial withdrawals, and life cover, making it a complete investment cum insurance product.
✅ Key Features of LIC Index Plus Plan 873
- Unit Linked Insurance Plan (ULIP): Provides market-linked returns along with life insurance protection.
- Fund Options: Choose between two fund types:
- Flexi Growth Fund (linked to NSE NIFTY 100)
- Flexi Smart Growth Fund (linked to NSE NIFTY 50)
- Guaranteed Additions: Offered at regular intervals starting from the 6th year.
- Life Cover: Sum Assured up to 10 times the annualized premium depending on age.
- Flexible Premium Payments: Pay monthly, quarterly, half-yearly, or annually.
- Switching Allowed: Up to 4 free switches between funds per year.
- Partial Withdrawals: Allowed after 5th policy year.
- Surrender Option: Available after 5 years of policy term.
- Rider Option: Accidental Death Benefit Rider available.
🎯 Eligibility Criteria & Parameters
| Feature | Details |
|---|---|
| Entry Age | 90 days to 65 years |
| Policy Term | 10 to 25 years |
| Minimum Premium | ₹2,500 (monthly – NACH), ₹7,500 (half-yearly), ₹15,000 (quarterly), ₹30,000 (annually) |
| Maximum Premium | No Limit |
| Minimum Maturity Age | 18 years |
| Maximum Maturity Age | 75 years (with 10x cover), 85 years (with 7x cover) |
| Sum Assured Options | 7 or 10 times the annualized premium |
| Lock-In Period | 5 years |
📈 Investment Fund Options
LIC Index Plus 873 offers 2 fund options based on different market indices:
1. Flexi Growth Fund
- Invests primarily in stocks of NSE NIFTY 100 Index
- Equity Allocation: 40% to 100%
- Debt/Short-Term Instruments: 0% to 40%
- Risk Level: Very High
2. Flexi Smart Growth Fund
- Invests primarily in stocks of NSE NIFTY 50 Index
- Equity Allocation: 40% to 100%
- Debt/Short-Term Instruments: 0% to 40%
- Risk Level: Very High
💰 Death & Maturity Benefits
Death Benefit
- Before commencement of risk: Fund Value will be paid.
- After commencement of risk: Higher of the following will be paid:
- Basic Sum Assured (minus partial withdrawals in last 2 years), OR
- Fund Value, OR
- 105% of total premiums paid (minus partial withdrawals in last 2 years)
Maturity Benefit
- On survival till policy maturity, the Fund Value is payable.
💵 Refund of Mortality Charges
If the policyholder survives the term, the total mortality charges deducted for life cover during the policy period will be refunded along with the maturity benefit.
Note: This refund is not applicable for discontinued or paid-up policies or if the policy is surrendered.
🎁 Guaranteed Additions
Guaranteed Additions (GAs) are added to the Fund Value at specific milestones. They depend on the annualized premium.
| Policy Year | GA (% of Annual Premium)<br>Less than ₹48,000 | GA (% of Annual Premium)<br>₹48,000 or more |
|---|---|---|
| 6th Year | 3% | 5% |
| 10th Year | 6% | 10% |
| 15th Year | 12% | 20% |
| 20th Year | 15% | 25% |
| 25th Year | 18% | 30% |
📊 LIC Index Plus Plan 873 – Example Illustration
Let’s understand the returns and benefits through a detailed example:
Assumptions
- Age: 34 years
- Policy Term: 21 years
- Annual Premium: ₹1,00,000
- Sum Assured: 10 times of premium = ₹10,00,000
- Fund Option Chosen: Flexi Growth Fund
- Policy Start Year: 2024
Policy Performance Table (Indicative)
| Policy Year | NAV | Premium Paid | Fund Value | Surrender Value | Death Benefit |
|---|---|---|---|---|---|
| 1 | ₹10 | ₹1,00,000 | ₹1,00,000 | ₹0 | ₹10,00,000 |
| 2 | ₹11 | ₹2,00,000 | ₹2,00,000 | ₹0 | ₹10,00,000 |
| 3 | ₹12.1 | ₹3,00,000 | ₹3,00,000 | ₹0 | ₹10,00,000 |
| 4 | ₹13.3 | ₹4,00,000 | ₹4,00,000 | ₹0 | ₹10,00,000 |
| 5 | ₹14.6 | ₹5,00,000 | ₹5,00,000 | ₹0 | ₹10,00,000 |
| 6 | ₹16.1 | ₹6,00,000 | ₹7,21,791 | ₹7,21,791 | ₹10,00,000 |
| 10 | ₹23.5 | ₹10,00,000 | ₹15,13,487 | ₹15,13,487 | ₹15,13,487 |
| 15 | ₹34.5 | ₹15,00,000 | ₹26,79,459 | ₹26,79,459 | ₹26,79,459 |
| 21 | ₹67.25 | ₹21,00,000 | ₹61,85,851 | ₹61,85,851 | ₹61,85,851 |
Maturity Amount: ₹61,85,851 (Fund Value at 21st year)
📉 Charges & Fees
1. Premium Allocation Charges
| Year | Offline Sale | Online Sale |
|---|---|---|
| 1st Year | 8.00% | 3.00% |
| 2nd to 5th Year | 5.50% | 2.00% |
| 6th Year onward | 4.00% | 1.50% |
2. Fund Management Charges (FMC)
- 1.35% p.a. for active fund types
- 0.50% p.a. for Discontinued Policy Fund
3. Discontinuance Charges
| Policy Year | Up to ₹50,000 Premium | Above ₹50,000 Premium |
|---|---|---|
| 1 | 20% or max ₹3,000 | 6% or max ₹6,000 |
| 2 | 15% or max ₹2,000 | 4% or max ₹5,000 |
| 3 | 10% or max ₹1,500 | 3% or max ₹4,000 |
| 4 | 5% or max ₹1,000 | 2% or max ₹2,000 |
| 5 onwards | NIL | NIL |
🔄 Switching & Partial Withdrawal
- Switching: 4 free switches allowed in a year, after which ₹100 per switch is charged.
- Partial Withdrawals: Allowed after 5 years of policy.
- Age Condition: Life Assured must be at least 18 years
- Maximum Limit:
- 6th–10th year: 15% of fund value
- 11th–15th year: 20%
- 16th–20th year: 25%
- 21st–25th year: 30%
🔓 Surrender & Lock-In
- Lock-In Period: 5 years
- Before 5 years: Fund Value (after deduction) will be transferred to Discontinued Policy Fund
- After 5 years: Full Fund Value will be paid without any deductions
❌ Exclusions
- Suicide Clause: If the Life Assured dies due to suicide within 12 months, only the Fund Value will be paid. No other claims shall be entertained.
📌 Important Notes
- No loan facility is available under this plan.
- Top-up premiums are not allowed.
- In case of insufficient balance in the Unit Fund after 5 years, policy will be compulsorily terminated.
📝 Final Thoughts
LIC Index Plus Plan 873 is an excellent choice for those who are looking for:
- Market-linked returns via NIFTY-indexed funds,
- Long-term wealth creation,
- Life insurance protection,
- Tax benefits under Section 80C and 10(10D).
It’s best suited for young investors with a long-term horizon who can bear market fluctuations and want the dual benefit of growth + insurance.
