LIC Protection Plus Plan No. 886

Are You Looking for a Life Insurance Plan That Actively Participates in the Market?

If you are searching for an expert LIC Agent in Bhadra (335501) to help you understand market-linked plans, you have come to the right place. Welcome to Ashuram Insurance Expert. Serving our community as a Chief Life Insurance Advisor since 1990, we are located near Ambedkar Chowk on the Main Bus Stand Road in Bhadra. Today, we are providing a highly detailed, educational guide on a dynamic Unit Linked Insurance Plan (ULIP): the LIC Protection Plus Plan No. 886.

Read on to understand exactly how this plan works, the six different fund options available, the specific charges involved, the strict 5-year lock-in period, and the essential risk factors you must know.

What is LIC Protection Plus Plan 886?

LIC's Protection Plus is a Non-Participating, Linked, Life, Individual, Savings plan.

To explain this in simple English:

• Non-Par (Non-Participating): This policy does not share in the traditional yearly profits or guaranteed bonuses of the corporation.
• Linked (ULIP): Your premium money is directly linked to the capital markets.

The plan offers a dual structure: it provides life insurance cover to protect your family while actively channeling your savings into investment funds throughout the term of the policy.

How a ULIP Works (Simple Explanation)

If you are new to ULIPs, the mechanism is quite transparent. When you pay your premium, LIC first deducts a specific "Premium Allocation Charge". The remaining balance is then invested into an investment fund of your choice.

Once your money is invested, it buys "units" of that fund at the current daily Net Asset Value (NAV). Every month, LIC will deduct certain necessary charges (like the Mortality Charge for your life insurance cover) by simply canceling a small number of units from your fund. Over the years, if your chosen stock or debt market performs well, the NAV of your units increases. However, if the market falls, the NAV decreases. You bear the investment risk entirely.

Key Features of LIC Protection Plus

This plan is packed with flexible features designed to put you in control of your investments:

• Life insurance cover is actively maintained throughout the entire policy term.
• Refund of Mortality Charges: If you survive the policy term, the mortality charges deducted for your life cover are refunded to your fund at maturity.
• Multiple Fund Options: You have the complete flexibility to choose from six different types of investment funds based on your risk appetite.
• Top-up Premiums: You can voluntarily invest extra money (Top-up premiums) to increase your savings and risk cover.
• Increase or Decrease Sum Assured: You can adjust your life cover based on life stage events like marriage or childbirth.
• Partial Withdrawals: Allowed after the mandatory 5-year lock-in period to take care of emergency liquidity needs.

Fund Options: Tailor Your Investment Risk

One of the biggest advantages of the LIC Protection Plus Plan is the ability to choose where your money goes. You have six distinct funds to choose from:

1. Bond Fund: This fund provides a relatively safe and less volatile investment option. It invests not less than 60% of your money in Government or Corporate Debt and 0% in equities. It carries a "Low Risk" profile.
2. Secured Fund: This fund aims to provide steady income by investing 45% to 85% in Debt and 15% to 55% in Listed Equity Shares. It carries a "Lower to Medium Risk" profile.
3. Balanced Fund: This fund provides a balanced mix of income and growth, investing 30% to 70% in Debt and 30% to 70% in Equity Shares. It carries a "Medium Risk" profile.
4. Growth Fund: This fund is aimed at long-term capital growth, investing 40% to 80% in equities. It carries a "High Risk" profile.
5. Flexi Growth Fund: This aims for long-term capital appreciation by investing 40% to 100% primarily in select stocks that are a part of the NSE NIFTY 100 Index. It carries a "Very High Risk" profile.
6. Flexi Smart Growth Fund: This aims for long-term capital appreciation by investing 40% to 100% primarily in select stocks that are a part of the NSE NIFTY 50 Index. It carries a "Very High Risk" profile.

You are not locked into one fund forever. You can switch your entire fund value between these options as the market changes.

Eligibility Conditions

To begin your wealth creation journey with this policy, you must meet the following criteria:

• Minimum Age at Entry: 18 Years (completed).
• Maximum Age at Entry: Depends on the premium paying term (up to 65 years for a 5-year premium paying term).
• Policy Term: 10, 15, 20, or 25 years.
• Premium Paying Term: Limited pay options of 5, 7, 10, or 15 years.
• Minimum Premium: Ranges from ₹30,000 to ₹60,000 yearly, depending on the premium paying term chosen.
• Basic Sum Assured: For ages under 50, it is 7 times the annualized premium. For ages 50 and above, it is 5 times the annualized premium. You can also opt for higher multiples depending on your age and term.

Understanding the Benefits (Survival and Death)

The LIC Protection Plus plan provides comprehensive benefits designed to protect your family while offering potential market-linked returns.

Maturity Benefit

If you survive to the end of the policy term, the maturity benefit payable to you will be an amount equal to your Unit Fund Value as on the date of maturity. This includes both your Base Premium Fund Value and your Top-up Premium Fund Value, if any.

Refund of Mortality Charges

A massive advantage of this plan is the refund feature. On surviving the stipulated date of maturity, provided all premiums are paid, 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 excludes extra underwriting charges and tax charges).

Death Benefit Structure

In the unfortunate event of the Life Assured's death, the policy protects the family. The Death Benefit is structured to ensure maximum protection, divided into Base Premium and Top-up Premium benefits.

For the Base Premium, 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 Base Premium Fund Value as on the date of intimation of death.
3. 105% of the total Base Premiums paid up to the date of death.

For Top-up Premiums (if you have paid any), an additional death benefit is paid, which is the highest of:

1. Total Top-up Sum Assured.
2. Top-up Premium Fund Value as on the date of intimation of death.
3. 105% of the total Top-up Premiums paid up to the date of death.

Detailed Breakdown of Charges

Because this is a ULIP, it is very important to thoroughly understand the charges deducted from your premiums and fund value.

• Premium Allocation Charge: Deducted upfront from your base premium. For offline sales, it is 8.00% in the 1st year, 5.50% from the 2nd to 5th year, and 3.00% from the 6th year onwards.
• Top-up Premium Allocation Charge: If you pay extra Top-up premiums offline, a 2.50% allocation charge is deducted from that amount.
• Mortality Charge: The cost of your life insurance cover. It is deducted at the beginning of each policy month based on your "Sum at Risk." The Sum at Risk is calculated as the highest of your Basic Sum Assured, Base Premium Fund Value, or 105% of premiums paid, MINUS your current Base Premium Fund Value.
• 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 all six available funds.
• Policy Administration Charge: This charge is strictly NIL for the first 5 years. From the 6th policy year onwards, a charge is levied. If your premium is less than ₹60,000, it is ₹85 per month. If it is ₹60,000 or more, it is ₹100 per month. This escalates at a rate of 5% p.a. from the 7th year.
• Switching Charge: You get 4 free switches in a given policy year. Subsequent switches are subject to a flat charge of ₹100 per switch.
• Partial Withdrawal Charge: A flat charge of ₹100 is deducted per transaction.
• Discontinuance Charge: If you surrender the policy within the first 5 years, a discontinuance charge is levied. The logic is based on a percentage of your Annualized Premium or Fund Value (whichever is lower), subject to a maximum limit, and this charge decreases each year until it becomes nil from the 5th year onwards.

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 strict conditions:

• Source of Withdrawal: Withdrawals are first deducted from your eligible Top-up Premium Fund (if any Top-up premiums have completed their own 5-year lock-in). Only if the Top-up fund is insufficient will the withdrawal be deducted from your Base Premium Fund.
• Maximum Limit: The maximum amount you can withdraw is a percentage of your fund value: 15% (years 6-10), 20% (years 11-15), 25% (years 16-20), and 30% thereafter.
• Minimum Balance Condition: You must maintain a minimum balance. The remaining balance after withdrawal cannot fall below 4 Annualized Premiums (if your annual premium is less than ₹60,000) or 3 Annualized Premiums (for all other cases).
• Impact on Death Cover: If partial withdrawals have been made from the Base Premium Fund, the Basic Sum Assured (your life cover) shall be temporarily reduced to the extent of the withdrawal amount for a period of two years. On completion of this two-year period, the original Basic Sum Assured is restored.

Surrender and Discontinuance Rules

• Surrender During Lock-in Period: If you surrender the policy before 5 years, your remaining Unit Fund Value (after applying Discontinuance Charges) is forcefully transferred to a "Discontinued Policy Fund." This fund earns a minimum guaranteed interest (currently 4% p.a.). You will only receive this money after the 5-year lock-in period is complete, and your life cover ceases immediately.
• Surrender After Lock-in Period: If you surrender after 5 years, your full Unit Fund Value is paid to you immediately without any discontinuance charges.
• No Loan Facility: Please note that absolutely no loan facility is allowed under this plan.

Risk Factors & Important Disclaimers

Before investing in the LIC Protection Plus Plan 886, you must understand the risks involved.

• ULIP vs Traditional Plan: A traditional plan offers absolute safety and predictable growth via bonuses. A ULIP like this plan offers no such guarantees; your money is exposed to the market.
• NAV Fluctuation: The Net Asset Value (NAV) of the units may go up or down based on the performance of the fund and factors influencing the capital market.
• Investment Risk: The investment risk in the investment portfolio is borne entirely by the policyholder. You are responsible for your fund choices.
• No Guaranteed Returns: LIC does not guarantee returns on this product. The various fund types offered are the names of the funds and do not in any way indicate the quality of these plans, their future prospects, or returns.

Optional Accidental Benefit Rider

You can significantly enhance your family's protection. The policyholder has the option of availing LIC's Linked Accidental Death Benefit Rider. If opted for, in case of accidental death, an additional Accident Benefit Sum Assured will be payable in a lump sum.

Who Should Buy This Plan?

The LIC Protection Plus Plan 886 is suitable for investors who have a moderate to high-risk appetite and a long-term investment horizon (10 to 25 years). If you actively want your savings tied to the equity and debt markets 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, guaranteed return policy without any market risk, a ULIP is not the right tool. You should instead look into traditional endowment plans or pure annuity plans.

Local Advisory Section: Serving Bhadra and Surrounding Villages

While our primary office is centrally located near Ambedkar Chowk on the Main Bus Stand Road in Bhadra (335501), Ashuram Insurance Expert is deeply committed to serving the wider region. We understand that discussing market-linked investments requires careful, face-to-face planning.

If you are reviewing your LIC policy in areas such as Ramgadhia or Sherpura, we understand that discussing market-linked investments requires careful planning. We provide dedicated door-to-door advisory services to families in areas like Chhanibari and Ninal. Whether you live in Garhichhani and need a fresh ULIP consultation, or require assistance with premium payments in Biran and Sahuwala, our trusted services reach you right where you are. We know that traveling into the city for complex insurance paperwork can be time-consuming. That is why we provide localized support to ensure that families in these vital agricultural areas, including Jhansal, Mahrana, and Malkhera, can easily understand their ULIP options, manage their premium payments, and secure their financial futures right at their doorstep.

---

Frequently Asked Questions (FAQs)