Life Insurance Corporation of India (LIC) launched a new unit-linked life insurance policy called LIC’s Index Plus this week. It is a non-participating, regular premium, individual life insurance plan which offers life insurance cover cum savings throughout the term of the policy.

LIC’s Index Plus details
Life insurance covers throughout the policy term of LIC Index Plus. Refund of mortality charges in respect of life insurance cover excluding any extra amount chargeable under the policy due to underwriting decision and tax charges levied on the mortality charges on survival till maturity, as per the policy brochure available on the life website. Guaranteed Additions as a percentage of Annual Premium shall be added to the Unit Fund at the end of specified policy durations and shall be utilized to purchase units.

Minimum premium
Yearly mode of premium payment is Rs 30000
Half yearly mode of premium payment is Rs 15,000.
Quarterly mode of premium payment is Rs 7,500/-
Monthly (NACH) mode of premium payment is 2,500/-

Benefits payable under the policy:

What is the death benefit under the policy?

On death of the Life Assured before the Date of Maturity (including during Grace Period), provided policy is in-force, then.
On death of Life Assured before the Date of Commencement of Risk: An amount equal to the Unit Fund Value as on date of intimation of death shall be payable.
On death of Life Assured after the Date of Commencement of Risk: An amount equal to the highest of the following shall be payable

♦ Basic Sum Assured reduced by Partial Withdrawals, if any, made during the two years period immediately preceding the date of death; or

♦ Unit Fund Value as on date of intimation of death; or 105% of the total premiums received up to the date of death reduced by Partial Withdrawals, if any, made during the two years period immediately preceding the date of death.

Note that mortality charges, Accident Benefit charges, Policy Administration charges, and Tax charges incurred subsequent to the date of death will be added back to the Unit Fund Value available on the date of death notification and paid back to the nominee or beneficiary along with the death benefit.

How will death benefit be paid?
The death benefit shall be paid either in lump sum or in instalments, if Settlement Option is opted for, it will be paid as per option exercised by the Policyholder/Life Assured.

What is the maturity benefit?
On Life Assured surviving the date of maturity, an amount equal to Unit Fund Value as on date of maturity will be payable.

When will Guaranteed Additions be paid?
Guaranteed additions are only payable if the insurance is in effect, which means that all due premiums have been paid. Guaranteed Additions as a percentage of one Annualised Premium, will be added to the Unit fund upon the completion of specific policy years, provided that all required premiums have been paid and the policy is in effect.

When is partial withdrawal allowed?
After the 5-year lock-in period (from the policy's start date), you can withdraw the units in part. The following conditions apply

♦ In case of minors, partial withdrawals shall be allowed only after Life Assured is aged 18 years or above.

♦ Partial withdrawals may be in the form of fixed amount or in the form of fixed number of units.

♦ Maximum amount of Partial Withdrawal as a percentage of fund during each policy year shall be as under: Policy Year Percent of Unit Fund 6th to 10th 20% 11th to 15th 25% 16th to 20th 30% 21st to 25th 35%.

♦ The above Partial withdrawal shall be allowed subject to minimum balance remaining after allowing for partial withdrawal is not less than 4 Annualized Premiums for Annual Premium less than Rs 48,000/- and in all other cases not less than 3 Annualized Premiums. The partial withdrawals which would result in termination of a contract shall not be allowed.