New LIC Endowment Plus ULIP Plan – What are its hidden factors?
Couple of weeks back, LIC has introduced new ULIP Plan called LIC Endowment Plus ULIP Plan. It is a combination of Endowment and ULIP Plan. LIC Endowment Plus ULIP Plan No.835 has several unique features. Premium allocation charges also reduced to maximum of 7.5%. What are the unique features of new LIC Endowment Plus ULIP Plan? What are the positive factors of this plan? Are there are hidden factors in this LIC new Endowment Plus ULIP Plan?
Features of LIC Endowment Plus ULIP Plan
- This is a endowment and ULIP Plan.
- It is basically Insurance with investment plan
- Amount of insurance cover would be based on premium amount which can be chosen by policy holder.
- ULIP allocation charges are 7.5% for 1st year, 5% for 2-5 years and 3% for > 5 years. Earlier ULIP plans had come with huge premium allocation charges which are reduced now.These charges would be deducted from your total premiums and balance would be invested. ULIP units would be allocated based on NAV as on that premium date after deducting allocation charges.
- Policy holder can choose any of the 4 funds indicated in the policy document.
- This ULIP Plan has lock-in period of 5 years. Means you can surrender / discontinue after 5 years.
- Discontinuance charges are limited to Rs 2,500 for anualised premiums upto Rs 25,000 and Rs 6,000 charges for annualized premiums above Rs 25,000. This is applicable in case you would discontinue paying premiums before lock-in period.
Eligibility of LIC Endowment Plus ULIP Plan
What is date of commencement of risk in this policy?
If the life insured age is less then 8 years, than the risk will commence after 2 years from the date of commencement of policy. In case the age at entry of Life Assured is 8 years or more, risk will commence immediately
Benefits of this LIC Endowment Plus ULIP Plan
a) Death Benefit
If life insured dies before the maturity date, death benefit would be as follows:
- If death occurs before commencement of risk, an amount equal to fund value of life insured would be paid to nominee.
- If death occurs after the commencement of risk, highest of Basic Sum Assured or life insured fund value would be paid.
b) Maturity benefits
- If policy holder survives, then entire fund value is paid. However one can take entire fund value or amount in 20 equal installments.
What are the 4 funds where policy holder can choose?
Positive features of LIC Endowment Plus ULIP Plan
- This ULIP plan comes with premium allocation charges at maximum of 7.5%. Earlier ULIP Plans came with more than 30% premium allocation charges, hence comparing to that it is low.
- No discontinuance charges if you surrender policy after 5 years of lock-in period.
- Partial withdrawals are allowed after 5 years subject to certain conditions.
- You can convert this into paid-up policy. In such case no further premiums are payable. Policy would remain in force, however your benefits would reduce.
- You can add accident benefit option where equal amount of sum assured would be paid in case life insured dies in accident. This benefit available only for individuals age of 18+ years.
Should you invest in LIC’s New Endowment Plus ULIP Plan?
No doubt this LIC Endowment Plus ULIP Plan is better than the earlier ULIP Plans issued by LIC. This has less premium allocation charges compared to earlier plans. However, I am not that excited about this plan. It has 7.5% premium allocation charges for 1st year and later at 5% and 3%. There are several new ULIP plans coming now which has less than 3% premium allocation charges or even almost zero allocation charges except for management fees. If you just trust LIC only, go and consider this ULIP Plan, otherwise, you can look for other ULIP plans which are coming with less charges.
Readers, what is your view on this new LIC’s Endowment Plus ULIP Plan?
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New LIC Endowment Plus ULIP Plan – What are its hidden factors