LIC’s Nivesh Plus (849) – Authentic review with calculators and illustrations
LIC of India has introduced the single premium ULIP plan Nivesh Plus – Plan 849 with effect from 2nd March 2020. And naturally, along with its regular premium counterpart, SIIP – Plan 852, it provides an opportunity for the populace to monetize the investment opportunities of the share market. The interesting fact is that LIC has timed the introduction of the plan amidst the speculations of the proposed share market listing of the company.
Nivesh Plus 849 is a ‘Single Premium, Unit Linked, Individual life insurance plan’ which offers insurance cum investment opportunities during the term of the policy. The plan is available offline as well as online.
LIC's Nivesh Plus - Plan 849 - Key features
Single Premium ULIP Plan
Tax benefits and one-time payment facility make it a hassle-free investment option.
Eligiblity for Guaranteed Additions
Guaranteed additions shall be added and converted to units at pre-defined specific intervals.
Low charges compared to similar plans
Lower charges ensure better returns at the time of maturity.
Sum Assured Options
The proposer has the flexibility to chose the basic sum assured for the amount he is paying, at the time of inception. By selecting the 10 times the single premium option, the life assured can claim the section 80C benefit for the premium paid as well as section 10(10D) benefit on the maturity amount. So if you need income tax benefits it is better to go for ‘Option 2’ whereas if an investment is a prime motive, ‘Option 1’ can be selected.
| Nivesh Plus – Sum Assured options | |
| Option 1 | 1.25 times of the Single Premium |
| Option 2 | 10 times of the Single Premium |
| Option once selected cannot be altered | |
Nivesh plus - Policy term restrictions
| Option 1: If Basic Sum Assured is 1.25 times of Single Premium | Option 2: If Basic Sum Assured is 10 times of Single Premium | ||
| For age at Entry up to 25 Years | For Age at entry 26 to 30 Years | For age at entry 31 to 35 years | |
| 10 to 25 years | 10 to 25 Years | 10 to 20 Year | 10 Years |
Nivesh Plus (Plan 849) -Investment funds available
| Fund Type | Investment in Government/Government Guaranteed Securities/Corporate Debt | Short -term Investments such as money market instruments | Investment in listed equity shares | Objective | Risk Profile |
| Bond Fund | Not less than 60% | Not more than 40% | Nil | To provide relatively safe and less volatile investment option mainly through accumulation of income through investment in fixed income securities | Low risk |
| Secured Fund | Not less than 45% and not more than 85% | Not more than 40% | Not less than 15% and not more than 55% | To provide steady income through investment in both equities and fixed income securities | Lower to medium risk |
| Balanced Fund | Not less than 30% and not more than 70% | Not more than 40% | Not less than 30% and not more than 70% | To provide balanced income and growth through similar proportion investment in both equities and fixed income securities | Medium risk |
| Growth Fund | Not less than 20% and not more than 60% | Not more than 40% | Not less than 40% and not more than 80% | To provide long term capital growth through investment primarily in equities | High Risk |
Guaranteed Additions - Adding value to the plan
Guaranteed additions as a percentage of one annualized premium as mentioned in the table below shall be added to the Unit Fund on completion of specific durations of policy years shall be paid, provided, the policy is in force.
| End of policy year | Guaranteed additions (% of annualized premium) |
| 6 | 3% |
| 10 | 4% |
| 15 | 5% |
| 20 | 6% |
| 25 | 7% |
Switching of funds
The policyholder can switch between any fund types mentioned above during the policy term. On switching, the entire amount is switched to the new fund opted for. During a given policy year 4 switches will be allowed free of charge and subsequent switchings will have a fixed charge of Rs. 100 per switch.
Read more: Fund switching techniques for ULIP policies – Guide
Nivesh Plus (Plan 849) Premium and Benefit Calculator
The online calculator for Nivesh plus plan provided below can help you to understand the benefit pattern of the plan quickly and easily. Please note that the expected return rate has to be provided to get the likely return amount.
LIC's Nivesh Plus (849) - charges applicable
Premium Allocation Charge
This is the percentage of the premium appropriated towards charges from the premium received and the balance amount is used to purchase the units of the policy.
The premium Allocation charge is as below:
- For Offline sale: 3.30%
- For Online sale: 1.50%
Mortality Charges
Mortality charge is the cost of insurance cover and will be taken at the beginning of each policy month by canceling the appropriate number of units. Mortality charge will depend on the sum at risk, which is the difference between the basic sum assured and the unit fund value as on the date of deduction of charge.
| Example of Mortality Charges | |||
| Age | Charge | Age | Charge |
| 10 | 0.55 | 50 | 6.18 |
| 20 | 1.11 | 60 | 14.42 |
| 30 | 1.32 | 70 | 32.32 |
| 40 | 2.25 | 80 | 75.70 |
Fund management charges
| Fund Management Charge | |
| Fund | Charge applicable |
| Bond Fund, Secured Fund, Balanced Fund, Growth Fund | 1.35% of unit fund per year |
| Discontinued Policy Fund | 0.50% of unit fund per year |
This is the charge levied as a percentage of the value of assets for managing the funds under the policy. This charge is levied at the time of computation of NAV on a daily basis.
Discontinuance charges
This charge will be levied by canceling the appropriate number of units out of unit fund value as on the date of discontinuance of the policy.
| Year of discontinuation | Single premium(SP) up to Rs.3,00,000 | Single premium (SP) above Rs.3,00,000 |
| 1 | Lower of 2% of SP or FV subject to a maximum of Rs.3,000 | Lower of 1% of SP or FV subject to a maximum of Rs.6,000 |
| 2 | Lower of 1.5% of SP or FV subject to a maximum of Rs.2,000 | Lower of 0.7% of SP or FV subject to a maximum of Rs.5,000 |
| 3 | Lower of 1.00% of SP or FV subject to a maximum of Rs.1,500 | Lower of 0.5% of SP or FV subject to a maximum of Rs.4,000 |
| 4 | Lower of 0.5% of SP or FV subject to a maximum of Rs.1,000 | Lower of 0.35% of SP or FV subject to a maximum of Rs.2,000 |
| 5 and on wards | Nil | Nil |
Anish L J is a ‘Financial Planner’ and member of Chartered Insurance Institute(CII), London and Insurance Institute of India. He is also a finance, insurance and software consultant. He thoroughly follows the developments in finance, insurance, and other related sectors.
