Life Insurance Corporation of India (LIC), the largest life insurer in the country, has launched a new product called LIC Index Plus, a unit linked, regular premium, individual life insurance plan. The product is available for purchase from February 6, 2024, as per a BSE notification by LIC on February 5.
LIC’s Index Plus is a unit linked, non-participating, individual life insurance plan that offers life insurance cover cum savings throughout the term of the policy. Guaranteed additions as a percentage of annualized premium shall be added to the unit fund on completion of specific duration of policy years under an in-force policy and shall be utilized to purchase units.
Features of LIC’s Index Plus
- The minimum age for entry is 90 days (completed) and the maximum age at entry is 50 or 60 years (nearer birthday), depending on the basic sum insured.
- The minimum age at maturity is 18 years (completed) and the maximum age at maturity is 75 or 85 years (nearer birthday) depending on the basic sum assured.
- The basic sum assured ranges from 7 to 10 times the annualized premium for ages 90 days (completed) to 50 years (nearer birthday), and 7 times the annualized premium for ages 51 years to 60 years.
- The minimum policy term is 10 or 15 years, depending on the annualized premium, while the maximum term is 25 years.
- The minimum annualized premium is Rs. 20,000 and the maximum annualized premium is Rs. 1 crore.
- The product offers two unit fund options: Index Fund and Bond Fund. The index fund invests in Nifty 50 Index ETFs and money market instruments, while the bond fund invests in government securities, corporate bonds and money market instruments.
- The policyholder can switch between the two funds at any time during the policy term, subject to a maximum of four switches in a policy year free of charge.
- The policyholder can also opt for partial withdrawals after completion of five policy years, subject to certain conditions and limits.
- The policyholder can avail of a settlement option at maturity, where he or she can receive the maturity proceeds in installments over a period of five years.
- The policyholder can also avail of a loan facility after completion of three policy years, subject to certain conditions and limits.
Benefits of LIC’s Index Plus
- The product provides death benefit in case of unfortunate demise of the life assured during the policy term. The death benefit is higher of the basic sum assured or fund value or 105% of total premiums paid as on date of death.
- The product also provides maturity benefit in case of survival of the life assured till the end of the policy term. The maturity benefit is equal to the fund value as on date of maturity.
- The product also provides guaranteed additions as a percentage of annualized premium to enhance the fund value. The guaranteed additions are as follows:
| Policy Year | Guaranteed Additions |
|---|---|
| 6th | 3% |
| 10th | 4% |
| 15th | 5% |
| Every year thereafter | 6% |
The guaranteed additions are added to the unit fund at the end of each policy year and are utilized to purchase units at the prevailing NAV.
Eligibility Criteria for LIC’s Index Plus
The eligibility criteria for LIC’s Index Plus are as follows:
| Parameter | Minimum | Maximum |
|---|---|---|
| Age at entry | 90 days (completed) | 50 or 60 years (nearer birthday) |
| Age at maturity | 18 years (completed) | 75 or 85 years (nearer birthday) |
| Policy term | 10 or 15 years | 25 years |
| Annualized premium | Rs. 20,000 | Rs. 1 crore |
| Basic sum assured | 7 or 10 times annualized premium | Subject to underwriting |
How to Buy LIC’s Index Plus?
LIC’s Index Plus can be purchased online through LIC’s official website or offline through LIC’s agents or branches. The policyholder has to fill up an application form and submit the required documents such as identity proof, address proof, income proof, etc. The policyholder also has to undergo a medical examination, if required, and pay the premium amount. The policy will be issued after the underwriting process is completed.
Conclusion
LIC’s Index Plus is a new unit linked life insurance product that offers life insurance cover cum savings with guaranteed additions. The product is suitable for those who want to invest in a mix of equity and debt instruments and also enjoy the benefits of life insurance. The product also offers flexibility in terms of fund options, switches, partial withdrawals, settlement option and loan facility. The product is available for purchase from February 6, 2024.