Life Insurance Corporation of India (LIC) has introduced a new scheme. Its name is Index Plus Policy. This is a non-participating unit-linked insurance plan (ULIP). This scheme, along with providing life insurance cover, also gives you an opportunity to get stock market related returns. It has a lock-in period of 5 years.
Life Insurance Corporation of India (LIC) has launched a new scheme. This is a Unit-Linked Insurance Plan (ULIP). Its name is Index Plus. This is a non-participating, regular premium and individual insurance plan. This plan offers you savings along with insurance cover during the policy term. Non-participating policies are those in which no share is given in the profits of the insurance company. This means that you will not get any bonuses or dividends with the policy.
What is there in LIC Index Plus?
LIC Index Plus provides life insurance cover for the entire policy term. According to the policy brochure, if the policyholder dies during the policy term, the sum assured is paid to the nominee. Maturity benefit is also available in the policy. If the policyholder survives the policy term, he is paid the funds collected at the end of the policy. In this scheme your fund is invested in units which will be linked to the performance of the stock market. You get guaranteed returns in the scheme, which is subject to the terms and conditions of the policy. The policy has a lock-in period of 5 years. Only after this you can take out the units in parts.
Some benefits of Index Plus policy
– Low Premium: The premium of this plan is lower than other ULIP schemes.
– Guaranteed Returns: You get guaranteed returns in this scheme, which gives you a source of fixed income.
-Stock market related returns: You also get a chance to get stock market related returns in this scheme.
Some disadvantages of index policy
Market Risk: In this scheme you have to face market risk. The reason is that the performance of your fund is linked to the performance of the stock market.
Low Returns: If the stock market does not perform well then you may get low returns.
Pre-decided benefits: The benefits you receive are pre-decided and do not depend on the performance of the stock market.
Should you invest?
Whether an Index Plus policy is right for you depends on your needs and preferences. If you want a ULIP policy with low premium and the opportunity to get guaranteed benefits and stock market linked returns, then Index Plus policy can be a good option for you.