LIC Market Plus

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About LIC

Life Insurance Corporation of India (LIC) is India’s largest insurance provider. The company deals in life insurance and provides all the standard products such as term insurance, endowment policies, unit linked insurance plans (ULIPs), retirement plans, and group life insurance, among others. LIC also provides rural plans and promotes schemes introduced by the Government of India for the economically weaker sections of society. It has a vision to be an internationally competitive financial conglomerate for India and other parts of the world. 

LIC has been in operation since 1957, when it was formed by amalgamating over 240 insurance companies and provident businesses under an act of the Indian Parliament. The company touches over 250 million people through its policies. It is headquartered in Mumbai and runs its pan-India business through 8 zonal offices, over 110 divisional offices, and more than 1380 satellite branches. 

Types of Plans offered by LIC

The company offers various plans that can be grouped under separate heads. Let’s look at these heads in more detail. 

Insurance Plans: These include traditional insurance policies such as endowment plans, money-back policies, and term covers. 

  • Endowment Plans: These policies collect premium over a certain period that may be the entire tenure of the policy or for a limited period. They pay back as a lump sum on maturity the sum assured and bonuses declared during the policy period. The investor receives a two-way benefit – an insurance cover during the tenure of the policy and an investment return on his money. 
  • Money-Back Plans: These are endowment policies that pay a certain sum of money at regular intervals in addition to the final lump sum. The money paid back is generally given as a percentage of sum assured. For instance, a 20-year money back plan may pay back 20% of sum assured every 5 years after the 5th year and the rest (i.e. 40%) at maturity on the 20th year. 
  • Term Plans: These policies are the simplest form of insurance policies as they only have a death benefit and no maturity benefit. Since the insurance company does not have to return any money, these plans are also the least priced insurance covers available in the market. 

Retirement Plans: These policies are meant to provide annuity returns during the investor’s retirement years. These plans are generally divided into two: immediate annuity plans and deferred annuity covers. The immediate annuity plans generally require a single premium that is paid at the beginning of the policy, while deferred plans need regular premiums that are paid to build up a retirement corpus for the future. 

Unit Plans: These are ULIPs that peg their returns to market performance. LIC offers a host of plans such as LIC Market Plus, LIC Wealth Plus and LIC New Endowment Plus that allow investors to get better returns on their money. Investors in plans such as LIC Market Plus 1 can choose from a range of funds including equity, debt and mixed. 

Micro Insurance Plans: These insurance products provide an adequate insurance cover and investment returns for a low premium. These policies are ideal for the economically weaker sections of the society who need an insurance plan to cover against risks faced by them. 

Health Plans: These plans are ideal for protecting the health of the insured against specific health risks. These policies provide a way for people to overcome the increasing costs of healthcare. They include daily cash options that let the insured meet daily healthcare costs during hospitalisation as well as protection against costs of surgery or long-term treatment. 

 Group Plans: These covers are meant for businesses, associations or groups of people and helps their employees / members and dependents against risks. These plans come with a low premium (when taken on a per head basis) than individual plans. 

LIC Market Plus – Introduction/Overview

LIC Market Plus 1 was a unit-linked pension plan from India’s largest insurance provider. The plan, now withdrawn, came with the options to take it with or without life cover. The amount of cover under LIC Market Plus 1 depended on the policyholder. The insured had the option to pay a single premium at the start of the cover or opt for regular premium. LIC Market Plus 1 was launched on July 5, 2006, and closed on June 30, 2010 after the IRDA mandated that all ULIP plans have to come with a life cover. 

LIC Market Plus – Key Features

Let’s look at the features of LIC Market Plus 1, in brief and in detail for both with cover and without. 

LIC Market Plus without Life Cover – Features in Brief

Particulars

Minimum

Maximum

Entry Age

18 years (last birthday)

Regular Premium: 75 years (nearest birthday)

Single Premium: 80 years (nearest birthday)

Maturity Age

40 years (completed)

85 years (nearest birthday)

Policy Term

5 years

67 years

Sum Assured

NIL

NIL

Deferment Term

Regular premium: 10 years

Single premium: 5 years

-

Premium

Regular Monthly ECS Mode: Rs. 1,000 p.m. for deferment of 15 years and more; Rs. 1,500 p.m. for deferment of 10 to 14 years

 

Regular Non-Monthly ECS Mode: Rs. 5,000 p.a. for deferment of 20 years and more; Rs. 10,000 p.a. for deferment of 15 to 19 years; Rs. 15,000 p.a. for deferment of 10 to 14 years

 

Single Premium: Rs. 30,000 for deferment of 5 years and more

No limit

Premium Paying Mode

Single Pay, Regular Pay

Premium Paying Frequency

Annual, half-yearly, quarterly, monthly; Single premium

  

LIC Market Plus without Life Cover – Features in Detail

Being designed primarily for retirement, LIC Market Plus 1 gave the insured the option to choose whatever premium they prefer to pay. Let’s look at the features in more detail: 

  • The LIC Market Plus plan had a minimum entry age of 18 years and above while the maximum entry age was 75 years for regular premium, and 80 years for single premium plans
  • The minimum maturity age for LIC Market Plus 1 was when the person had completed 40 years while the maximum maturity age was 85 years
  • LIC Market Plus had a minimum deferment period of 10 years for investors paying regular premium and 5 years for investors opting for the single premium payment option
  • Being a unit linked policy without cover, LIC Market Plus 1 had no sum assured. Both maturity and death benefit comprised of only the plan’s fund value
  • Minimum premium under LIC Market Plus was different depending on the type of payment:
    • For monthly ECS payments, the regular premium was Rs. 1,000 p.m. for a deferment term 15 years and above, and Rs. 1,500 p.m. for a deferment timeframe of 10 to 14 years. The premium can only be in multiples of Rs. 250
    • For other regular ECS modes, the premium was Rs. 5,000 p.a. for deferment period of 20 years and above, Rs. 10,000 p.a. in case of deferment of 15 to 19 years, and Rs. 15,000 p.a. if deferment is for 10 to 14 years. The premium can only be in multiples of Rs. 1,000
    • The minimum single premium under LIC Market Plus was Rs. 30,000 for a deferment term of 5 years and above
  • Investors can move from one fund to another during the tenure of their LIC Market Plus 1 policy
  • LIC Market Plus investors will receive an annuity based on the prevailing annuity rates on maturity of their plan
  • Policyholders also have the option to commute one-third of their fund value on vesting which will be paid as a lump sum and a reduced amount will be paid as annuity
  • LIC Market Plus 1 will give the investor the option to purchase any pension plan from any life insurance company in India on vesting. If this option is exercised, the investor must inform LIC of their decision at least 6 months before the date of vesting of the plan
  • LIC offers a cooling off period of 15 days in which the investor may opt to return the premium if they are not satisfied with the plan
  • People cannot take a loan against the plan
  • Has a lock-in period of 3 years 

LIC Market Plus with Life Cover – Features in Brief

Particulars

Minimum

Maximum

Entry Age

18 years (last birthday)

65 years (nearest birthday)

Maturity Age

40 years (completed)

75 years (nearest birthday)

Policy Term

10 years

57 years

Sum Assured

Rs. 30,000

Single premium: Equal to premium

Regular premium:

  • With critical illness rider: 10 times annual premium if entry age is less than 40 years; 5 times annual premium if age at entry is 41 years or over
  • Without critical illness rider: 20 times annual premium if entry age is less than 40 years; 10 times annual premium if age at entry is 41 years or over

Deferment Term

Regular premium: 10 years

Single premium: 5 years

-

   

Premium

Regular Monthly ECS Mode: Rs. 1,000 p.m. for deferment of 15 years and more; Rs. 1,500 p.m. for deferment of 10 to 14 years

 

Regular Mode: Rs. 5,000 p.a. for deferment of 20 years and more; Rs. 10,000 p.a. for deferment of 15 to 19 years; Rs. 15,000 p.a. for deferment of 10 to 14 years

 

Single premium: Rs. 30,000 for deferment of 5 years and more

No limit

Premium Paying Mode

Single Pay, Regular Pay

Premium Paying Frequency

Annual, half-yearly, quarterly, monthly; Single premium

 

 

LIC Market Plus with Life Cover – Features in Detail

LIC Market Plus 1 with life cover like LIC Market Plus without life cover allowed the policyholder to choose the amount of premium they wished to pay. Features of this LIC Market Plus 1 with cover option are: 

  • The minimum entry age was 18 years as of last birthday under the LIC Market Plus plan and the maximum entry age was 65 years
  • LIC Market Plus 1 offered a minimum maturity age of 40 years (completed) and a maximum maturity age of 75 years (nearest birthday)
  • The LIC Market Plus with cover policy had a minimum deferment period of 10 years for regular premium and 5 years for single premium payers
  • Minimum sum assured under LIC Market Plus was Rs. 30,000 while maximum sum assured depended on two factors: the insured’s age and whether or not they chose critical illness rider
    • If critical benefit rider was opted for under LIC Market Plus 1
      • If investor is less than 40 years of age: 10 times annual premium
      • If insured was 41 years of age or above: 5 times annual premium
  • If critical benefit rider was not opted for under the LIC Market Plus plan
    • If policyholder is less than 40 years of age: 20 times annual premium
    • If investor was 41 years of age or above: 10 times annual premium
    • Minimum premium payment under LIC Market Plus 1 depended on the payment mode:
      • In case of monthly ECS premium payments, regular premium equalled:
        • Rs. 1,000 p.m. for deferment period of 15 years and more,
        • Rs. 1,500 p.m. for deferment time of 10 to 14 years.

This premium was only payable in multiples of Rs. 250

  • In case of other premium payment modes, regular premium equalled:
    • Rs. 5,000 p.a. for deferment period of 20 years and above
    • Rs. 10,000 p.a. in case of deferment of 15 to 19 years, and
    • Rs. 15,000 p.a. if deferment is for 10 to 14 years

This premium was payable only in multiples of Rs. 1,000

  • The minimum single premium under LIC Market Plus 1 was Rs. 30,000 for a deferment term of 5 years and more
  • Like LIC Market Plus plans without cover, investors could move from one fund to another during the tenure of their LIC Market Plus 1 policy
  • On vesting, investors in LIC Market Plus will receive annuities based on the prevailing annuity rates
  • LIC Market Plus 1 policyholders can commute one-third of their fund value on maturity. This commuted amount would be paid as lump sum and the annuity will be proportionately reduced after commutation
  • LIC gives the investor the option to purchase any pension plan from any life insurer in India on maturity of their LIC Market Plus plan. Any investor deciding to exercise this option has to inform LIC of the decision 6 months before the date of vesting of the LIC Market Plus 1 plan
  • LIC offers a cooling off period of 15 days in which the investor may opt to return the premium if they are not satisfied with the plan
  • LIC Market Plus 1 policyholders cannot take a loan against the plan
  • Has a lock-in period of 3 years, after which policyholders can surrender the plan and get their money back 

LIC Market Plus – Benefits 

  • The fund value is used by LIC to provide an annuity pension to the insured policyholder
  • Policyholders have the option to commute 1/3 of their pension, in which case they will receive a lump sum payment equal to the amount thus commuted. The rest of the fund value will be paid as annuity
  • Death benefit includes Sum Assured and Fund Value for plan with a cover, while plans without cover will provide the nominees with an amount equal to the fund value
  • The LIC Market Plus 1 plan provides an accident rider up to 70 years of age at most. The minimum and maximum covers are respectively Rs. 25,000 and Rs. 50 lakh

Provides four fund options for investment: Bond Fund, Secured Fund, Balanced Fund and Growth Fund for the policyholder to choose

  • Policyholders can surrender the policy after 3 years and get back their money 

LIC Market Plus – Fund Details

Policyholders can choose to invest in any one of the four funds: 

  • Bond Fund: Invests at least 60% in government guaranteed securities or corporate debt, and not more than 40% in short-term money market instruments. Has a low risk profile 
  • Secured Fund: Focuses on creating a steady income source. It invests at least 45% in government guaranteed securities or corporate debt, not more than 40% in short-term money market instruments, and anything from 15% to 55% in public equity. Has a low to medium risk profile 
  • Balanced Fund: Has an objective to create balanced income and pursue growth opportunities. The fund invests at least 30% in government guaranteed securities or corporate debt, not more than 40% in short-term money market instruments, and anything from 30% to 70% in publicly listed equity shares. Has a medium risk profile 
  • Growth Fund: Focuses on long-term capital growth and invests at least 20% in government guaranteed securities or corporate debt, not more than 40% in short-term money market instruments, and anywhere from 40% to 80% in publicly listed equity shares. Has a high risk profile