LIC Index Plus Policy: The Life Insurance Corporation of India (LIC) introduced a novel unit-linked life insurance plan known as LIC’s Index Plus.
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This plan, a nonparticipating, regular premium, individual life insurance scheme, integrates life coverage with savings benefits over the policy’s duration. According to the policy brochure on LIC’s website, LIC’s Index Plus ensures life insurance coverage throughout its term, offering a refund of mortality charges (excluding extra charges due to underwriting decisions and taxes on those charges) upon surviving till the policy matures. Additionally, the policy features Guaranteed Additions, calculated as a percentage of the Annual Premium, which are credited to the Unit Fund at specified intervals, further enhancing the policy’s value by purchasing additional units.
The policy’s premium structure is designed to accommodate various payment schedules, with the minimum annual premium set at Rs 30,000. For semi-annual payments, the minimum is Rs 15,000; for quarterly payments, Rs 7,500; and for monthly payments (NACH mode), Rs 2,500.
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Regarding benefits, the policy delineates clear guidelines for death benefits, depending on the timing relative to the policy’s maturity and commencement of risk coverage. Before risk commencement, the Unit Fund Value at the time of death notification is payable. After risk commencement, the payout is the highest of: the Basic Sum Assured (minus any partial withdrawals within the two years prior to death), the Unit Fund Value at death notification, or 105% of total premiums received (again, minus any partial withdrawals in the two years before death). Additional charges incurred after death are reimbursed to the nominee or beneficiary alongside the death benefit, which can be received as a lump sum or in installments if the Settlement Option was chosen.
At maturity, the Life Assured receives an amount equal to the Unit Fund Value on the maturity date. Guaranteed Additions are awarded upon reaching specific policy anniversaries, conditional on all premiums being paid and the policy remaining active.
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Partial withdrawals are permitted post the initial five-year lock-in, subject to conditions ensuring the Life Assured’s age and maintaining a minimum balance in the fund. The allowed withdrawal percentage varies with the policy year, ensuring flexibility while maintaining the policy’s integrity and ongoing benefits.
