With the help of Unit Linked Insurance Plan (ULIP), you can invest in the market as well as financially protect yourself and your family from the unforeseen future. The insurance sector had faced a revolutionary change after the introduction of ULIPs due to this dual benefit. The premiums paid in a ULIP is invested in a range of market securities, each with different growth and return rate. Per unit price or the Net Asset Value (NAV) is determined by dividing the market value of the investment by the number of securities purchased. To calculate the units availed, the number of premiums paid is divided by the NAV.
Inception of LIC
The LIC (Life Insurance Corporation of India) was established on 1st September 1956. The main objective was to provide insurance to eligible citizens of India, including those from rural areas LIC is known to be one of the oldest insurance companies in India. The Parliament of India formed this by implementing the Life Insurance Corporation Act. LIC was the solitary insurance provider till 2000. LIC offers an array of standard insurance policies as well as Unit Linked Insurance Plans (ULIPs). Today, LIC operates in 2,048 branch offices, 1,381 satellite, and corporate offices, 113 divisional offices and 8 zonal offices.
Types of LIC ULIP
At present, there is one LIC ULIP plan that offers both insurance coverage and high returns from market-linked investments.
LIC New Endowment Plus Plan
It is a non-participating unit-linked endowment assurance plan that offers dual benefits of insurance and investment during the policy term. You can create long-term savings along with availing financial protection for yourself as well as your family. LIC ULIP offers you the flexibility to choose from the four funding options based on your risk appetite.
|LIC New Endowment Plus Plan|
|Min Eligibility Age||3 months|
|Max Eligibility Age||50 years|
|Min Policy Tenure||10 years|
|Max Policy Tenure||20 years|
|Min Maturity Age||18 years|
|Max Maturity Age||60 years|
|Min Premium Amount|
|Max Premium Amount||No Limits|
|Basic Sum Assured||105% of total premiums paid|
|Premium Paying Mode||Monthly, quarterly, semi-annually, and annually|
|Free Look Period||15 days|
|Grace Period||30 days|
|Investment Options|| Four funds:|
|Accidental Death Benefit Rider||Available|
|Premium Payment Frequency||Flexible|
|Lock-In Period||5 years|
|Annual Interest Rate||4%|
|Surrender Value|| Before Lock-in Period:|
Benefits of LIC New Endowment Plus Plan
- Earlier premium allocation charges were above 30%. The LIC ULIP plan allocation charges are as low as 7.5%.
- If you surrender your policy after the lock-in period of 5 years, no discontinuation charges are applied.
- Partial withdrawals are permitted (Terms and conditions apply).
- You can opt to switch the policy to a paid-up policy, wherein the policy would remain in force, but you would not require to pay the premiums anymore. However, there is a high possibility that you may lose some of your benefits in the procedure.
- You can opt for the accidental death cover where in case the policyholder dies due to an accident; the complete fund value is payable.
Documents Required for the purchase of plan
You need to provide any of the documents from 10th mark sheet, 12th mark sheet, passport, voter ID, or driving license as a proof of your current age.
You can provide a passport, driving license, voter ID, PAN card, or Adhar card to prove your citizenship.
You must provide an electricity bill, ration card, telephone bill, passport, or driving license that clearly mentions your permanent living address.
You have to provide the proof that you are an earning individual to buy a policy with a salary slip of last few months.
Lastly, you need to provide your passport sized photograph for identity purposes.
How to Apply for LIC ULIPs?
You can either visit the Life Insurance Corporation of India branch in your city or fill up an online application form provided at the website.
How to Make LIC Death Claims?
The person who is legally designated for receiving the policy money needs to intimidate the policy provider about death.
Secondly, the person needs to submit Claim Form ‘A’ from Form No. 3783. If the policy has crossed three years from the date of risk, you must submit Form no. 3783A.
Lastly, the person needs to submit the original copies of the policy document and any additional documents as per the company’s requirement.
How to Receive Your Sum Insured Post Maturity?
The service center usually sends you maturity intimation two months prior to the date of maturity.
You need to submit the discharged receipt in Form no. 3825 along with the original policy document at least one month prior to the due date. By doing so, you will receive the maturity amount before the due date.
In any case, your intimation does not receive any response; you must immediately contact the service center of the LIC office at your place.
How to Surrender and Close your LIC ULIP Plan?
- You must assemble the documents mentioned below:
- Original LIC ULIP
- Original receipts of premium payment.
- Recent unit balance statement.
- Fill a surrender letter and take a print out (You can get the format from the website).
- Take a copy of S. V. Application as well as Form no. 3510/5074 from your nearest LIC office.
- Make copies of all the original documents.
- You need to submit all these documents at the LIC branch from where you had bought the policy.
- After you submit, personnel will verify your documents and provide you with a receipt for the same.
- After a few days, your check will be sent to you via post. You can deposit the check and collect your money from your bank.
Why Should You Choose LIC?
- LIC is known to be the most experienced insurance company in India.
- Although, the oldest, LIC has adapted to all the latest technologies like IVRS, WAN, EDMS, and LAN. This has allowed the company to provide 24/7 online assistance.
- The company has partnered with many other popular companies like LIC Mutual Funds, NCDEX, National Insurance Company, NSE among many others.
- LIC has established their branches internationally. At present, LIC holds branches in Saudi Arabia, Bahrain, Sri Lanka, Nepal, Australia, United States, and Canada.
LIC ULIP is a union of endowment and ULIP plan. It is a risk cover plus investment plan. The amount of the insurance cover is based on the premium amount. The policyholder can choose this premium amount. Within a 5-year lock-in period, if you surrender the policy, you will need to pay discontinuation charges. The discontinuation charges range from Rs 2,500 to Rs 25,000 based on your premium payments. The capital market dynamics is directly proportional to the ULIPs performance. With LIC ULIP plan you can avail best benefits with lower premiums and high returns.
Q1. What are the modes of payments available with LIC ULIPs?
There are six modes of premium payment offered by LIC, they are:
- Cash, Cheque, or Demand Draft
- Axis bank payment
- Online payment
- Debit card
- Credit card
- Net Banking
- Corporation bank payment
- MP online
- AP Online
- Suvidha Infoserve
- Offline bill payment
- Authorized service provider
- Retired LIC employee collection
- Phone banking
- Premium point of empowered agents
Q2. What is LIC ULIP’s policy renewal process?
- Firstly, you need to login by entering your client ID and your date of birth.
- Secondly, you must select the payment option.
- Lastly, you should save or print the premium deposit receipt after the successful payment. You can also opt to pay the money from the nearest LIC branch.
Q3. Can you get a refund of your premium if you are not satisfied with the policy?
Ans. If you are not content with the policy, you can claim for a refund of your premiums within 15 days of the receipt of the policy document. This period is known as the free look period.
Q4. How many premiums are used to purchase units?
Ans. The full premium paid is not dedicated to purchasing units. The company deducts various charges like manufacturing costs and invests the remaining amount to purchase units.
Q5. Can you invest additional contribution above the regular premiums?
Ans. Yes, you can invest an additional contribution over your regular premiums if your insurance provider offers the facility. This additional contribution is termed as top ups. With LIC you can take a top-up plan for accidental death benefits.
Q6. Can you switch between the fund options?
Ans. Yes, you can switch among the four funding options available with an LIC ULIP plan without any charge based on the market strategies.