LIC Protection Plus Plan 886

Read on to know more about the LIC Protection Plus Plan in detail.

About LIC Protection Plus 886 

LIC Protection Plus plan is a non-participating, unit-linked life insurance plan from LIC of India. This plan offers a combination of life insurance protection and an opportunity for savings through investment in various funds. As a unit-linked plan, the value of your investment in the LIC Protection Plus plan 886 can fluctuate based on market performance.

With LIC Protection Plus plan, you get flexibility in terms of choosing your premium amount, the Basic Sum Assured (which is a multiple of your annual premium), your premium-paying term, and the overall policy term. You also have the option to pay extra premiums (called top-up premiums) during the policy term.

Key Features of LIC Protection Plus Plan 886  

• Flexibility to choose the type of investment funds based on your risk preference.

• Option to adjust the Basic Sum Assured for a specific annualized premium.

• Option to increase or decrease the Basic Sum Assured in response to life events like marriage or the birth or legal adoption of a child.

• Top-up premiums to increase your fund value.

• Death benefits can be paid as a lump sum or in instalments through a settlement option.

• Partial withdrawals are allowed in the LIC Protection Plus plan 886 after a 5-year lock-in period.

• On maturity of the LIC Protection Plus plan, you receive the fund value along with the refund of all mortality charges deducted during the policy term.

Eligibility of LIC Protection Plus Plan

Benefits of LIC Protection Plus Plan

1. Death Benefit

   If the Life Assured dies before the policy's maturity date (and the policy is in-force, including during the Grace Period), the death benefit will be the highest of:

   • Basic Sum Assured minus any partial withdrawals made in the last two years;

   • Base Premium Fund Value;

   • 105% of the total Base Premiums paid up to the date of death.

   If any Top-up Premiums were paid, the highest of the following will also be payable:

   • Total Top-up Sum Assured;

   • Top-up Premium Fund Value;

   • 105% of the total Top-up Premiums paid up to the date of death.

2. Option to Take Death Benefit in Instalments

   This is an option to receive Death Benefits from the LIC Protection Plus plan 886 in instalments over a chosen period of 5 or 10 or 15 years instead of lump sum amount under an in-force policy. This option can be exercised by Life Assured during his/her lifetime; for full or part of Death benefits payable under the policy. The amount opted by the Life Assured (i.e. Net Claim Amount) can be either in absolute value or as a percentage of the total claim proceeds payable.

3. Maturity Benefit

   In case the life assured survives at the end of the policy term, the maturity benefit is paid out. The maturity benefit is comprised of the fund value (which is the accumulation of the base premium and any top-up premiums, if there are any).

4. Refund of Mortality Charges

   At the time of maturity, the total mortality charges in the LIC Protection Plus plan 886, which were deducted during the policy term, are paid back to you. This refund of mortality charges is the distinctive feature of this plan and is given to the policy as long as it is active and not surrendered or discontinued.

5. Partial Withdrawals

   Once the 5-year lock-in period has passed, you have the right to make partial withdrawals from your policy. The withdrawals can be done by either a fixed amount or a fixed number of units. You may first withdraw from any top-up funds and only thereafter from the base premium fund. Nevertheless, there are restrictions on partial withdrawals: they must not lower the fund below certain levels, and the amount withdrawn cannot be more than the permissible limit for the policy.

6. Optional Rider: LIC’s Accident Benefit Rider

   The policyholder can add LIC's Accident Benefit Rider with Regular or Limited Premium payments by giving an additional premium. The rider can be installed, provided the outstanding premium payment term for the base plan and the rider is at least 5 years, and the Life Assured's age is not more than 65. The coverage is active during the Premium Paying Term or up to the age of 70, whichever is earlier.

7. Top-up Premium

   You can pay voluntary top-up premiums besides your base premiums during the policy tenure, provided the LIC Protection Plus plan 886 is active and not in the last 5 years of its term. These top-up premiums are invested in the same fund as the base premium and create a separate "top-up fund."

   Each top-up premium increases the total sum assured by 1.25 times the amount of the top-up premium. The top-up fund is also subject to a 5-year lock-in period after the premium is paid, unless the policy is surrendered.

8. Switching

   LIC Protection Plus plan offers the option to switch between different types of funds (equity, debt, balanced, etc.). If you want to change your fund allocation based on your financial goals or risk preference, you can do so by submitting a written request.

   You can also adjust the Basic Sum Assured under certain circumstances (such as marriage or the birth of a child), subject to underwriting.

LIC Protection Plus Policy Details

1. Grace Period

   LIC Protection Plus plan offers a 30-day grace period if the policyholder misses a premium payment. During this period, the policy remains active, and the coverage continues. If the premiums are not paid during the grace period, the policy lapses

2. Free-look Period

   After purchasing the LIC Protection Plus plan, if the policyholder is not completely satisfied with its terms and conditions, they can return the policy within a 30-day period, known as the Free-Look period. LIC will cancel the policy and return the amount paid after deducting pro-rata risk cover, stamp duty, administrative costs and medical exam charges, if any.

3. Policy Surrender

   You can surrender your policy at any time, but the payout depends on when you surrender.

   • During the 5-year lock-in period: The policy’s Base Premium Fund Value (after charges) and any Top-up Premium Fund Value will go to the Discontinued Policy Fund. No risk cover will be available, and the policy ends after 5 years, or earlier if the Life Assured dies.

   • After the 5-year lock-in period: You’ll receive the Unit Fund Value and no discontinuance charges apply. The policy cannot be reinstated after surrender.

4. Policy Revival

   During the lock-in period:

   • The LIC Protection Plus Plan 886 can be revived by paying all due premiums without interest.

   • The Discontinued Policy Fund will be transferred back to the Base Premium Fund and Top-up Fund (if any) in the same proportion as before.

   • Any discontinued charges previously deducted will be added back to the Base Premium Fund.

   • Any outstanding administration and tax charges will be deducted.

   After the lock-in period:

   • The policy can be revived by paying due premiums without interest.

   • Any outstanding administration and tax charges will be deducted.

   • Revival is subject to approval, insurability, and may be on modified terms.

Exclusions

If the policyholder dies by suicide within 12 months of the policy start or revival, the nominee/beneficiary will receive the Unit Fund Value as of the death notification date, along with the death certificate. No other claims will be entertained, and the policy will terminate.

Charges under the LIC Protection Plus Plan 886

LIC Protection Plus plan, like any ULIP, has certain charges. Here’s a brief explanation of each charge:

1. Premium Allocation Charge

   This charge is a percentage of the premium (including Top-up premiums) that is deducted to cover costs. The remaining amount is used to purchase units of the selected fund. Premium allocation charges vary by policy year and sales channel.

2. Mortality Charge

   This charge is deducted monthly from the Base Premium Fund or Top-up Fund based on the policyholder’s age and Sum at Risk. It covers life insurance and can change annually depending on the policyholder’s age.

3. Accident Benefit Charges

   If the Linked Accidental Death Benefit Rider is opted for in the LIC Protection Plus plan 886, this charge is deducted monthly from the Base Premium Fund. The charge is Rs. 0.40 per Rs. 1,000 of Accident Benefit Sum Assured, or Rs. 0.80 if the Life Assured is a police officer.

4. Fund Management Charge

   This charge is levied as a percentage of the assets in the fund and deducted from the NAV. The charge is 1.35% annually for most funds and 0.50% for the Discontinued Policy Fund.

5. Policy Administration Charge

   This charge applies from the 6th policy year onwards. It is deducted monthly from the units in the Base Premium Fund or Top-up Fund, based on the annualized premium, with charges increasing 5% annually after the 6th year.

6. Switching Charge

   A switching charge applies when you switch between funds. You can switch up to 4 times a year for free; additional switches in the same year incur a Rs. 100 charge per switch.

7. Partial Withdrawal Charge

   A charge of Rs. 100 is levied each time a partial withdrawal is made from the Unit Fund Value. The charge is deducted by canceling units from the Base Premium Fund.

8. Discontinuance Charge

   If the LIC Protection Plus plan is discontinued, a charge is deducted from the Base Premium Fund, based on the policy year and premium amount. This charge decreases over time and is waived after 5 years.

9. Tax Charge

   Tax charges will be applied to all applicable charges as per the prevailing tax laws, issued by the Indian government or other tax authorities.

10. Miscellaneous Charge

    This flat charge of Rs. 100 applies for changes like altering the premium mode or increasing/decreasing the Sum Assured. The charge is deducted when the policy alteration occurs.