LIC Index Plus Plan No. 873

Building Wealth with Market-Linked Growth and Life Protection

If you are looking for an "LIC Agent Near Me" to help you navigate market-linked insurance products, you have come to the right place. Welcome to Ashuram Insurance Expert. Serving since 1990, we are your trusted local advisor located near Ambedkar Chowk on the Main Bus Stand Road in Bhadra (335501). Today, we are taking a deep, educational dive into a highly dynamic Unit Linked Insurance Plan (ULIP): the LIC Index Plus Plan No. 873.

Read on to understand exactly how this plan works, the specific charges involved, the strict 5-year lock-in period, and how to decide if this market-linked plan aligns with your long-term financial goals.

What is LIC Index Plus Plan 873?

LIC's Index Plus is a Non-Participating, Linked, Regular Premium, Individual Life Insurance plan. It offers a combination of life insurance cover and savings throughout the term of the policy.

To break down these terms:

• Non-Par (Non-Participating): This policy does not share in the traditional yearly profits or bonuses of the corporation.
• Linked (ULIP): Your premium money is utilized to purchase units in market funds. The Net Asset Value (NAV) of these units will go up or down based on the daily performance of the stock market.
• Regular Premium: You commit to paying premiums periodically (yearly, half-yearly, quarterly, or monthly) throughout the chosen policy term.

Key Features of the Plan

This ULIP is designed with several unique features that differentiate it from traditional endowment policies:

• Life insurance cover is maintained throughout the entire policy term.
• Refund of Mortality Charges: On surviving the policy term, the mortality charges deducted for your life cover are refunded to your fund.
• Guaranteed Additions: A specific percentage of your annualized premium is added to your unit fund at the end of specific policy years.
• Fund Choice: You have the flexibility to choose the type of investment fund based on your risk appetite.
• Partial Withdrawals: Allowed after the mandatory 5-year lock-in period to take care of emergency liquidity needs.
• Settlement Option: The death benefit can be settled in installments instead of a single lump sum.

How the Plan Works

The mechanics of the LIC Index Plus Plan are straightforward but require careful understanding. When you pay your regular premium, a specific "Premium Allocation Charge" is deducted first. The remaining balance is then utilized to purchase units in the investment fund you have selected.

Once your money is invested, the value of your policy becomes the "Unit Fund Value." Every month, LIC will deduct certain charges (like the Mortality Charge for your life cover) by simply canceling an appropriate number of units from your fund. Over the years, as the stock market grows, the NAV of your units may increase, thereby growing your overall wealth.

Investment Funds: Flexi Growth & Flexi Smart Growth

You have the option to choose between two distinct investment funds. Both funds carry a "Very High Risk" profile, as they are heavily invested in the equity markets.

1. Flexi Smart Growth Fund: The objective of this fund is to provide long-term capital appreciation. It invests 40% to 100% of your money primarily in select stocks that are a part of the NSE NIFTY 50 Index.
2. Flexi Growth Fund: This fund also aims for long-term capital appreciation but invests 40% to 100% of your money primarily in select stocks that are a part of the broader NSE NIFTY 100 Index.

You are not locked into one fund forever. You have a Switching Option that allows you to shift your entire fund value between these two funds. LIC provides 4 free switches during a given policy year. Any subsequent switches in that year will incur a flat switching charge.

Important Conditions and Risk Disclaimer

It is crucial to understand that ULIPs are not guaranteed return products. The value of your investment is subject to capital market fluctuations and depends entirely on the NAV of the chosen fund. The investment risk is borne entirely by you.

Furthermore, this plan comes with strict conditions:

• There is absolutely no loan facility available under this plan.
• Unit linked insurance products do not offer any liquidity during the first five years of the contract. You cannot surrender or withdraw your monies completely or partially till the end of the fifth year.

Eligibility Conditions

Before investing, you must meet the following eligibility criteria:

• Minimum Age at Entry: 90 days (completed).
• Maximum Age at Entry: 60 years (nearer birthday) if opting for 7 times the Annualized Premium as the Basic Sum Assured, or 50 years if opting for 10 times the Annualized Premium.
• Basic Sum Assured: 7 times or 10 times the Annualized Premium, depending on your age at entry.
• Minimum Premium: ₹30,000 for Yearly mode, ₹15,000 for Half-yearly, ₹7,500 for Quarterly, and ₹2,500 for Monthly (NACH).
• Policy Term: Between 10 and 25 years if the Annualized Premium is ₹48,000 and above. If the Annualized Premium is less than ₹48,000, the minimum term is 15 years.

Understanding the Benefits

The LIC Index Plus Plan 873 provides comprehensive benefits for both survival and unforeseen tragedies.

Maturity Benefit

If you survive to the end of the policy term, the maturity benefit payable to you will simply be an amount equal to your Unit Fund Value as on the date of maturity. Your returns depend entirely on the final NAV.

Refund of Mortality Charges

A massive advantage of this plan is the refund feature. On surviving the stipulated date of maturity, an amount equal to the total mortality charges deducted during the policy term shall be added back and payable along with your Maturity Benefit. (Note: This refund excludes any extra underwriting charges and tax charges levied on the mortality charges).

Death Benefit

In the unfortunate event of the Life Assured's death after the commencement of risk, the policy protects the family. The Death Benefit payable shall be the highest of the following three amounts:

1. The Basic Sum Assured (reduced by any partial withdrawals made in the 2 years preceding death).
2. The Unit Fund Value as on the date of intimation of death.
3. 105% of the total premiums received up to the date of death (reduced by any partial withdrawals made in the 2 years preceding death).

Furthermore, any mortality charges or policy administration charges recovered subsequent to the date of death shall be added back to the unit fund value before the payout is processed.

Guaranteed Additions

Provided all due premiums are paid, LIC adds Guaranteed Additions to your Unit Fund at the end of specific policy years. These additions are calculated as a percentage of one Annualized Premium and are credited to your chosen fund as new units. The additions scale up based on the premium amount and policy duration:

• End of Year 6: 3% (Premium < 48k) / 5% (Premium>= 48k)
• End of Year 10: 6% (Premium < 48k) / 10% (Premium>= 48k)
• End of Year 15: 12% (Premium < 48k) / 20% (Premium>= 48k)
• End of Year 20: 15% (Premium < 48k) / 25% (Premium>= 48k)
• End of Year 25: 18% (Premium < 48k) / 30% (Premium>= 48k)

Please note that these Guaranteed Additions will be reduced proportionally if you have made any partial withdrawals.

Crucial Section: Understanding the Charges

Because this is a ULIP, you must be fully aware of the charges deducted from your premiums and fund value.

• Premium Allocation Charge: Deducted upfront from your premium. For offline sales, it is 8.00% in the 1st year, 5.50% from the 2nd to 5th year, and 4.00% thereafter.
• Mortality Charge: The cost of your life insurance cover. It is age-specific and deducted at the beginning of each policy month by canceling units.
• Fund Management Charge (FMC): Levied as a percentage of the value of the assets. It is 1.35% p.a. of the Unit Fund for both the Flexi Growth and Flexi Smart Growth funds. The daily NAV is declared net of this FMC.
• Policy Administration Charge: This charge is strictly NIL for the first 5 years. From the 6th policy year onwards, a nominal charge is levied, escalating at a rate of 5% p.a., subject to a maximum of ₹500 per month.
• Switching and Partial Withdrawal Charges: After your 4 free switches, a flat charge of ₹100 per switch applies. For partial withdrawals, a flat charge of ₹100 is deducted per transaction.
• Discontinuance Charge: If you surrender or stop paying premiums within the first 5 years, a heavy discontinuance charge is levied. This charge is a percentage of the Annualized Premium or Fund Value (whichever is lower) and decreases each year until it becomes nil from the 5th year onwards.
• Tax Charges: All applicable taxes are levied on these charges as per prevailing tax laws.

Partial Withdrawal Rules

Once the 5-year lock-in period is over, the plan offers liquidity. You may partially withdraw units to take care of emergency needs, subject to the following rules:

• In the case of minors, partial withdrawals are allowed only after the Life Assured turns 18.
• A flat charge of ₹100 is deducted per withdrawal.
• The maximum amount you can withdraw is a percentage of your fund value: 20% (years 6-10), 25% (years 11-15), 30% (years 16-20), and 35% thereafter.
• Crucially, you must maintain a minimum balance. The remaining balance after withdrawal cannot fall below 4 Annualized Premiums (for premiums < 48k) or 3 Annualized Premiums (for premiums>= 48k).
• If you make a partial withdrawal, your Basic Sum Assured (Death Benefit) will be temporarily reduced by the withdrawn amount for a period of two years.

Who Should Buy This Plan?

The LIC Index Plus Plan 873 is suitable for investors who have a high-risk appetite and a long-term investment horizon (10 to 25 years). If you actively want your savings tied to the NIFTY 50 or NIFTY 100 indices while simultaneously securing a life cover for your family, this plan provides a structured, disciplined way to invest in the capital markets.

Who Should Avoid This Plan?

If you are a conservative investor who panics when the stock market dips, you should strictly avoid this plan. Furthermore, if you are looking for a reliable retirement income plan India solution that provides a guaranteed, lifelong monthly payout without market risk, a ULIP is not the right tool. You should instead look into an LIC annuity plan or an LIC pension plan (such as the Saral Pension plan) which acts as an LIC immediate annuity offering zero market risk and absolute peace of mind.

Comparison Hint: ULIP vs Traditional Plans

When choosing an insurance product, clarity is key. A traditional endowment plan offers high safety and steady, predictable growth via bonuses. An LIC pension plan provides guaranteed lifelong income. A ULIP like the Index Plus Plan offers no such guarantees; it trades absolute safety for the potential of higher, inflation-beating returns driven by the stock market. You must choose based on your personal risk tolerance.

Local Service Section: Your Trusted LIC Agent Across the District

While our primary office is located centrally near the Main Bus Stand Road in Bhadra (335501), Ashuram Insurance Expert is deeply committed to serving the entire region. We understand that discussing market-linked investments requires careful, face-to-face planning, especially if you reside in areas like Sagra and Gadhra.

Our comprehensive financial advisory services extend seamlessly across the district. If you are reviewing your LIC policy in areas such as Sherda or Suratpura (Surat Pura), our team is ready to assist you. Whether you live in Dabri and need a fresh ULIP consultation, or require assistance with premium payments in Bhirani and Asann (Asan) (Pin: 335503), our trusted services reach you right where you are. We know that traveling into Bhadra city for complex insurance paperwork can be time-consuming. That is why we provide dedicated, localized support to ensure that families in these vital areas can easily understand their ULIP options and secure their financial futures at their doorstep.

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