LIC’s Nivesh Plus (849) – Authentic review with calculators and illustrations

March 1, 2020March 3, 2020 Anish L J 3446 Views ULIP

(Last Updated On: March 3, 2020)

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.

Table of Contents

LIC's Nivesh Plus - Plan 849 - Key features

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.

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