By The LIC Index Plus Life Insurance remains effective throughout the policy term, with guaranteed additions as a percentage of the annual premium added to the unit fund at the specified term’s conclusion, as detailed in the policy brochure on the LIC website. It is also utilized for purchasing units. Against this backdrop, experts advise exercising caution when opting for the LIC index policy. Life Insurance Corporation of India has recently introduced the Index Plus, a non-participating, regular premium, individual life insurance plan that offers both savings and life insurance coverage throughout the policy term. In light of these considerations, let’s delve into further details about the index policy.
Advantages of Index LIC Policy
A policy remains active in the event of the life assured’s death before the maturity date (including the grace period). The insurance is applicable in case of the life assured’s demise before the risk commencement date, with an amount equivalent to the unit fund value on the date of death notification being paid. For death occurring after the risk commencement date, the payment will be the higher of the basic sum assured reduced by any partial withdrawals within two years before death, the unit fund value on the date of death notification, or 105% of the total premiums received up to the date of death, minus partial withdrawals.
Charges incurred post-death, such as death charges, accident benefit charges, policy administration charges, and tax charges, are reinstated to the available unit fund value as of the death notification date and reimbursed to the nominee or beneficiary. The death benefit, paid either in a lump sum or installments, follows the option chosen by the policyholder or life assured if the settlement option is exercised.
The life assured, upon surviving the maturity date, receives an amount equivalent to the unit fund value as on the maturity date. Assured additions, payable only if the insurance remains in force, are added to the unit fund after completing specified policy years. However, these additions are disbursed solely when all required premiums are paid, and the policy remains active. Partial withdrawals of units are permitted after a specified lock-in period. Such withdrawals are only allowed when the life assured is 18 years or older, in the case of minors. The withdrawals can take the form of a fixed amount or a fixed number of units, with a maximum limit of one percent of the fund in each policy year.
