LIC's Money plus-I: An Analysis

Posted by Admin on 2

LIC (Life Insurance Corporation of India)’s Money plus-I ULIP plan contains all the basic features that a typical ULIP plan requires.

Starting from different fund options to switching facility, death benefit to riders it contains most of the features that a good ULIP plan requires.

Let us do a quick review on its features:

Following id the basic eligibility criteria of this plan.

Min/Max Entry Age

0/65 years

Min/Max Age of Maturity

18/75 years

Min/Max Term

5-30 years

Minimum Premium

Rs 5000 P/A

Min. Sum Assured

5 times yearly premium

Max. Sum Assured

30 times yearly premium if entry age is below 45 years, 20 times if between 46 to 60 years else 10 times

Death Benefit:
Higher of Sum assured or the Policyholder’s Fund Value shall be available as death benefit.
For the Life Assured of age less than 12 years before the commencement of risk, the Policyholder’s Fund Value shall be paid in case of death.

Maturity Benefit:

Amount equal to fund value of units.

Riders:

Accident and critical illness.

Accident rider is available for person above 18 year and critical illness rider is available for person between 18 to 50 years.

Fund types and Switches:

4 types of funds are available and one can choose them depending on risk taking capacity.

4 switches in a year is free and thereafter Rs. 100 per switch.

Allocation charges:

Depending on the yearly premium you are paying a fixed amount is deducted as allocation charge and rest is get invested.

It charges bit higher allocation charge of 26.50% and out of Rs. 100 invested only 73.50 is invested.

Following table describes allocation charge.

Yearly premium

1st year

2 – 3 years

4th year onward

5,000 to 75,000

26.50%

5%

2.5%

75,001 to 1,50,000

25.50%

5%

2%

1,50,001 to 3,00,000

24%

5%

2%

3,00,001 and above

23%

5%

2%

Mortality and rider Charges:

Depending on your age it gets deducted every month.

Policy admin. Charges:

Rs. 60 pm in first year, Rs. 20 pm in second year and from 3rd year onward Rs, 20 pm but escalating at 3% pa.

Fund management charge:

It ranges between 0.60% to 1.20% pa. It is deducted as a percentage of value of units.

Surrender charge:

One of the good feature of this policy is there is no surrender charge.

Most of the ULIP of Private insurers come with the surrender charge even after 3 policy years but this policy stands out with no surrender charge.

One can surrender policy after 3 years.

If one wants to surrender policy before 3 years, then its fund value converts to a monetary terms. No charges will be deducted then and the monetary amount is paid after completion of 3 years.

If one dies in such cases then monitory value is paid to nominee.

Unlike other ULIP policies this policy has very light surrender rules and most important no surrender charges.

Premium Discontinuation:

If one wants to discontinue the premium payment there are lots of option available to him

1) You can surrender the policy based on above conditions.

2) Continue the life and other rider. In this case charges will be deducted from your existing fund balance till

a) Total balance reaches to annualized premium amount or

b) two years from the due date of first unpaid premium, or

c) Till the date of maturity

Whichever is earlier.

Partial Withdrawals.

It is allowed after 3 years.

In case of minors, Partial withdrawals are allowed only after they complete 18 years.

For 2 years period from the date of withdrawal, the sum assured under the basic plan shall be reduced to the extent of the amount of partial withdrawals made.

Settlement Option.

After maturity one can opt to receive money in installment and during that period there will be no life cover also value of balance unit are subject to change as per their NAV.

Conclusion:

Positives

· No surrender charge.

· No Partial withdrawal charge.

· Low Fund management charge.

Negatives

· High allocation charge.

· Only four funds.

A good feature rich policy with a little higher allocation charge. If you are ok with a bit less return(As LIC always play safe in term of investment) and want to stay with LIC then this might be the good ULIP plan to invest; If you want high return and comfortable with good private insurer stay away from this policy.

Tagged as: ,
About the Author

Write admin description here..

Get Updates

Subscribe to our e-mail newsletter to receive updates.

Share This Post

Related posts

2 comments:

sudha said...

CAN ANYBODY TELL ME ABOUT THE TERM POLICIES AVAILABLE IN MARKET WITH RETURN OF PREMIUM FACILITY.I AM SEARCHING FOR THE SAME BUT UNABLE TO LOCATE THEM.

Bhargav said...

Hi Sudha,

LIC's New Bima Gold is similar product which return the premium. However the premium rates are much high compared to term plan however less than money back and endowment plans.

At the same it must be noted that it is always profitable to go for term plan and put premium difference(which u can save if opt for term plan rather then premium return plan) to be invest in mutual fund or any other instrument

Blogger templates. Proudly Powered by Blogger.
back to top