What is LIC Nivesh Plus?
LIC Nivesh Plus is a non-participating, unit-linked, and single-premium individual life insurance plan. The policyholder needs to make a one-time single premium payment to avail of the dual benefits of investment and life cover. In simple terms, if the life assured dies during the policy term, then a lump sum amount is provided to the beneficiary. In case of survival, the policyholder secures a maturity amount, that too, with an advantage of good market returns. The plan levies lower charges and hence ensures better returns at the time of maturity. ULIP plans offered by LIC of India are available for online and offline purchases.
Highlights of LIC Nivesh Plus
Below mentioned are the key highlights of the LIC Nivesh Plus
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Plan type
Unit Linked Plan
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Policy Term
10 - 25 years
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Premium Paying Mode
Single Premium only
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Fund Type
Bond/ Secured/ Balanced/ Growth
Eligibility Criteria of LIC Nivesh Plus
The following are the eligibility criteria and restrictions of the LIC Nivesh Plus policy.
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Entry Age
90 days - 70 years
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Maturity Age
18 years - 85 years
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Basic Sum Assured
Under Option 1: 1.25 times of single premium
Under Option 2: 10 times of single premium -
Policy Term
Option 1: 10-25 years
Option 2:
For age at Entry up to 25 years: 10-25 years
For age at Entry 26 to 30 years: 10-20 years
For age at Entry 31 to 35 years: 10 years -
Premium Limit
Rs. 1 Lakh - No Limit
Benefits of LIC Nivesh Plus
We all need to strategically plan our financial goals to meet the skyrocketed needs of our current lifestyle. LIC Nivesh Plus benefits combine personal and financial aspects as a unit-linked plan. Let’s look into the details about the benefits of LIC Nivesh Plus below.
Death Benefit
In case the policyholder dies during the policy term, the amount is provided to the beneficiaries in the following conditions
On Death Before the Date of Commencement of Risk: The beneficiary receives an amount equal to the Fund Value.
On Death After the Date of Commencement of Risk: The beneficiary receives a higher of the following amount
- Basic Sum Assured after deducting the Partial Withdrawals (if any, made before two years of the date of death).
- Unit Fund Value.
Maturity Benefit
If the life assured survives the maturity date, the policyholder receives an amount equal to Unit Fund Value.
Optional Benefits Under LIC Nivesh Plus
Except for the inherent benefits of the plan, there are some optional benefits that a policyholder can take advantage of.
Rider Benefit
The policyholder can avail of the Accidental Death Benefit Rider at any policy anniversary, only if the outstanding policy term is at least 5 years but on or before the policy anniversary when the policyholder turns 65. If the rider is opted for and the life assured faces accidental death. In such cases, the beneficiaries receive the Accident Benefit Sum Assured in a lump sum along with the death benefit of the base plan.
Partial Withdrawals
In case of an emergency, the policyholder can partially withdraw a fixed amount or a fixed number of units only after the completion of five policy years. The maximum number of partial withdrawals is possible as follows.
| Policy Year | Percentage of Unit Fund |
|---|---|
| 6th to 10th | 15% |
| 11th to 15th | 20% |
| 16th to 20th | 25% |
| 21th to 25th | 30% |
* All the data has been provided from the official LIC of India sources.
For the two years following the date of the partial withdrawals made, the Basic Sum Assured will be reduced based on the amount withdrawn. The original Basic Sum Assured will be restored after the completion two years from the date of partial withdrawal.
Switching Between the Fund Types
The Life Insurance Corporation of India allows the policyholder to switch between the four fund types during the policy term. When a policyholder switches, the entire Fund Value transfers to the new Fund selected.
Settlement Option
The LIC Nivesh Plus Policy allows the life assured to choose an option to receive the death benefit in instalments. If the policyholder selects the option, the nominee can not make any changes.
Basic Sum Assured Option
You can choose from the two Basic Sum Assured options at the time of the inception of the policy. The Basic Sum Assured options under LIC Nivesh Plus are
Under Option 1: 1.25 times of Single Premium
Under Option 2: 10 times of Single Premium
Investment of Fund Under LIC Nivesh Plus
The Nivesh Plus of LIC of India allows the investment of funds as
Unit Fund
The four fund types are available under the policy. As per the fund option selected by the policyholder, the allocated premium is used to buy the units. The various types of fund and investment patterns are as follows.
| Fund Type | Investment in Government/ Government Guaranteed Securities/ Corporate Debts | Short-term investments such as money market instruments | Investment in Listed Equity Shares | Objective | Risk Profile |
|---|---|---|---|---|---|
| Bond Fund | 60% to 100% | 0% to 40% | NIL | To provide a relatively safe and less volatile investment option (investmenfixed-income securities)
|
Low Risk |
| Secured Fund | 45% to 85% | 0% to 40% | 15% to 55% | To provide steady income (investment in both equities and fixed-income securities) | Lower to Medium Risk |
| Balanced Fund | 30% to 70% | 0% to 40% | 30% to 70% | To provide balanced income and growth (similar proportion investment in equitiesfixed-income securities)
|
Medium Risk |
| Growth Fund | 20% to 60% | 0% to 40% | 40% to 80% | To provide long-term capital growth (investment primarily in equities) | High Risk |
* All the data has been provided from the official LIC sources.
Discontinued Policy Fund
The investment pattern of the Discontinued Policy Fund is categorised as
For Market Instruments: 0% to 40%
For Government Securities: 60% to 100%
How Does LIC Nivesh Plus Policy Work?
After getting to know the available fund options and investment patterns, you must learn the working procedure of the Nivesh Plus policy. We are going to make it simpler for you with a sample example.
Rishabh is 30 years old married man. He is planning to start his family and attain financial security in the coming years. To achieve his goals, he wants to start investing and wants life security against any uncertain event. His friend suggests choosing a ULIP plan from the Life Insurance Corporation of India. After reviewing the different policies available, he decides to invest in Nivesh Plus. He invests a lump sum amount of Rs. 1 Lakh for a policy of 20 years. The plan allows him to get the death benefit from the following.
Option 1: Basic Sum Assured is 1.25 times of Single Premium
Option 2: Basic Sum Assured is 10 times of Single Premium
The benefits for both options will be calculated in the following way.
Case 1: When Rishabh plans to invest in Option 1: The following benefits are available under the plan
| End of Policy Duration (in years) | Rate of Return | Fund Value before Guaranteed Additions | Guaranteed Additions | Fund Value after Guaranteed Additions | Sum Assured | Death Benefit Payable |
|---|---|---|---|---|---|---|
| 6 | @4% | Rs. 1,10,338 | Rs. 3,000 | Rs. 1,13,338 | Rs. 1,25,000 | Rs. 1,25,000 |
| @8% | Rs. 1,38,538 | Rs. 3,000 | Rs. 1,41,538 | Rs. 1,25,000 | Rs. 1,41,538 | |
| 15 | @4% | Rs. 1,44,310 | Rs. 5,000 | Rs. 1,49,310 | Rs. 1,25,000 | Rs. 1,49,310 |
| @8% | Rs. 2,50,768 | Rs. 5,000 | Rs. 2,55,768 | Rs. 1,25,000 | Rs. 4,55,768 | |
| 20 | @4% | Rs. 1,67,824 | Rs. 6,000 | Rs. 1,73,824 | Rs. 1,25,000 | Rs. 1,73,824 |
| @8% | Rs. 3,47,186 | Rs. 6,000 | Rs. 3,53,186 | Rs. 1,25,000 | Rs. 3,53,186 |
* All the data has been provided from the official LIC sources.
This way, Rishabh gets the following maturity benefit on the maturity date
Rs. 1,73,824 at Rate of Investment @4% p.a.
Rs. 3,53,186 at Rate of Investment @8% p.a.
Comprehensively, Rishabh gets a net 6.79% of benefit at the rate of investment of @8% p.a.
Case 2: When Rishabh plans to invest in Option 2: The following benefits are available under the plan
| End of Policy Duration (in years) | Rate of Return | Fund Value before Guaranteed Additions | Guaranteed Additions | Fund Value after Guaranteed Additions | Sum Assured | Death Benefit Payable |
|---|---|---|---|---|---|---|
| 6 | @4% | Rs. 1,00,728 | Rs. 3,000 | Rs. 1,03,728 | Rs. 10,00,000 | Rs. 10,00,000 |
| @8% | Rs. 1,27,772 | Rs. 3,000 | Rs. 1,30,772 | Rs. 10,00,000 | Rs. 10,00,000 | |
| 15 | @4% | Rs. 1,08,084 | Rs. 5,000 | Rs. 1,13,084 | Rs. 10,00,000 | Rs. 10,00,000 |
| @8% | Rs. 2,05,285 | Rs. 5,000 | Rs. 2,10,285 | Rs. 10,00,000 | Rs. 10,00,000 | |
| 20 | @4% | Rs. 1,02,010 | Rs. 6,000 | Rs. 1,08,010 | Rs. 10,00,000 | Rs. 10,00,000 |
| @8% | Rs. 2,61,893 | Rs. 6,000 | Rs. 2,67,893 | Rs. 10,00,000 | Rs. 10,00,000 |
* All the data has been provided from the official LIC sources.
This way, Rishabh gets the following maturity benefit on the maturity date
Rs. 1,08,010 at Rate of Investment @4% p.a.
Rs. 2,67,893 at Rate of Investment @8% p.a.
Hence, Rishabh gets a net 6.79% of benefit at the rate of investment of @8% p.a.
To calculate the expected maturity and death benefits, you can use the LIC Nivesh Plus maturity calculator online, only from the official Life Insurance Corporation of India website.
Disclaimer: The above premium rates apply to non-smoker males/females for a policy purchased offline when LIC’s Accidental Death Benefit is not opted for. The premiums are indicative and are subject to change as managed by the LIC of India.
Charges Under LIC Nivesh Plus
LIC Nivesh Plus levies some charges for managing the funds and opting for any additional benefits on the policy. The charges are as follows
Premium Allocation Charge
A percentage of the premium received is allocated to collect the charge. This part is known as the allocation rate and is used to purchase the units for the policy. These allocation charges are as follows
For offline sale: 3.30%
For online sale: 1.50%
Mortality Charge
A mortality charge is the cost of securing life insurance cover. These charges vary according to age and sum at risk and are levied at the beginning of each policy month by deducting an appropriate number of units from the Unit Fund Value.
Accident Benefit Rider Charges
An accidental Benefit Charge is applicable if a policyholder opts for Accidental Death Benefit Rider. The charge is recovered at the beginning of each month by cancelling an appropriate number of units from the Unit Fund Value during the policy term.
Right to Revise Charges
The corporation has the right to revise all the charges occasionally except the Mortality Charge and Accident Benefit Charge.
Other Charges
The following charges are applicable during the policy term.
| Charge | Applicability | Applicable As |
|---|---|---|
| Fund Management Charge | Management of funds at the time of computation of NAV | • 1.35% p.a. Unit Fund (for all four Unit Funds available) • 0.50% p.a. of Unit Fund for ‘Discontinued Policy Fund’ |
| Switching Charge | Switching of funds from one fund to another at the time of the switch | • 4 switches within a policy year are free of cost • Subsequent switches in that year are charged Rs. 100 per switch |
| Partial Withdrawal Charge | At the time of partial withdrawal | A flat charge of amount Rs. 100 by deducting the appropriate number of Units fromUnit Fund Value
|
| Discontinuance Charge | On the date of discontinuance of the policy | Charges vary as per the policy year and single premium amount invested. |
* All the data has been provided from the official LIC sources.
Additional Features of LIC Nivesh Plus
The following features make LIC Nivesh Plus 849 a suitable investment option to offer expanded flexibility and gain a profitable return.
Guaranteed Additions
Guaranteed additions are made as a percentage of Single Premium after the completion of specific policy years.
| End of the Year | Guaranteed Additions (as a % of Single Premium) |
|---|---|
| 6 | 3% |
| 10 | 4% |
| 15 | 5% |
| 20 | 6% |
| 25 | 7% |
* All the data has been provided from the official LIC sources.
Surrender
The policyholder is allowed to surrender the policy anytime during the policy term. Reinstatement of the surrender policy is not allowed. The surrender value is applicable as under
If the policy is surrendered during the 5 years Lock-in period: The Unit Fund Value after deducting the Discontinuance Charge is converted into a monetary amount. This monetary amount is then transferred to the Discontinued Fund Policy in the form of Units. The proceeds of the Discontinued Policy Fund are payable to the life assured after the completion of 5 years lock-in period.
In case of death of the life assured after the surrender but before the completion of the lock-in period, the proceeds of the Discontinued Policy Fund are payable to the nominee.
If the policy is surrendered after the 5 years Lock-in period: The Unit Fund Value at the date of surrender is payable. No discontinuance Charge is applicable in such a condition.
Compulsory Termination
When the policy runs and duly paid for at least 5 years, but the balance of the unit fund is insufficient to recover the applicable charges, the policy shall compulsorily terminate. The balance amount in Unit Fund is refunded to the policyholder.
Free Look Period
A free look period of 15 days (in case of offline sale) and 30 days (in case of online sale) is provided from the date of receipt of the policy. During that period, if you are not satisfied with the ‘Terms and Conditions’ of the policy, you can return the policy to the LIC of India, stating the reasons for objections. The corporation shall cancel the policy and return the amount applicable for a refund.
Exclusions Under LIC Nivesh Plus
By now, you are well aware of all the features and flexibilities of the LIC Nivesh Plan, but you need to know the exclusions under this plan. Let’s look into it.
Suppose the policyholder commits suicide within 12 months of the commencement of the policy; the nominee will receive the Unit Fund Value available on the day of intimation of death. It is mandatory to submit the death certificate.
Any charges other than Fund Management Charges recovered after the date of death shall be added back to the Unit Fund Value. Any guaranteed additions made after the date of the death shall be recovered from the Unit Fund. The corporation will entertain no further claims under the plan.
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Final Words
LIC Nivesh Plus is a unit-linked insurance plan that provides secured life cover and investment. This single premium paying plan offers several inbuilt benefits and optional benefits that make the plan suitable to invest in. You can also buy this plan for your child anytime after the completion of 90 days. To make the plan more accessible for an expanded audience base, it is available for online and offline purchases. You can simply connect with an agent, visit the nearest LIC branch, or go through the official LIC of India website.
If you face any difficulties at any step, RenewBuy POSP advisors can assist you with the process. Connect with us on our official website.