LIC has a variety of plans in its kitty. Each plan targets a specific customer group and fulfils a specific customer need. Traditional life insurance plans are meant to create guaranteed wealth while health plans aim to provide financial assistance in case of a medical emergency. Similarly, there are unit-linked plans which are different from guaranteed return plans as these plans invest in the capital market and don’t promise a guaranteed return. Let’s understand what unit-linked plans are all about.
Unit-linked insurance plans, or ULIPs as they are popularly called, are insurance plans which promise the dual benefit of investment return and insurance cover. The premiums paid towards ULIPs are invested in market-linked funds. The policyholder can choose any fund as per his risk appetite. Thereafter, as the fund grows, the invested premiums also grow and give returns. ULIPs are also flexible in nature as they allow partial withdrawals during the plan tenure. Moreover, policyholders can change the chosen investment funds through switching and also invest additional premiums through top-ups.
Unit-linked plans have the following salient features –
LIC, currently, offers only one Unit linked insurance plan which is called LIC’s New Endowment Plus Plan.
The features and benefits of the plan are as follows –
Individuals aged 90 days and above can buy LIC’s ULIP plan.
The premium payment term is equal to the policy tenure which can range from 10 years to 20 years
The plan offers four investment funds which are Bond Fund, Secured Fund, Balanced Fund and Growth Fund.
No, under LIC’s unit-linked plan, each partial withdrawal would be charged at INR 100.
The plan can be surrendered any time after the completion of the first five years.
Partial withdrawal is when the plan allow you to withdraw from the fund value during the term of the plan. This withdrawal is allowed partially and is a tax-free income in the hands of the policyholder.
Surrendering the plan means terminating the plan before the completion of the term. On surrender the available fund value is paid.
If the premiums are paid within the due date, an additional period is allowed for paying premiums. This period is called grace period. If premiums are not paid within the grace period also, the policy would lapse.
Yes, a lapsed policy can be revived within 2 years from the date of the first unpaid premium. To revive the policy the outstanding premiums are required to be paid along with interest charges.