This article presents a comprehensive comparison between two unique LIC products: LIC Index Plus and LIC Nivesh Plus Plan 749. Both the products are unit linked and non-participating, but cater to different customer preferences with respect to premium payment, investment flexibility and fund options. In this article, we will analyse the features, eligibility, benefits, charges and fund options of each plan to help prospective policyholders understand their differences and choose the right policy.
Overview of LIC Index Plus and LIC Nivesh Plus Plan 749
LIC Index Plus: A regular premium, individual life insurance plan that offers insurance coverage along with investment in unit-linked funds. This plan allows policyholders to choose between Flexi Growth and Flexi Smart Growth funds, emphasizing long-term capital appreciation. The policy term ranges from 10 to 25 years, making it ideal for long-term financial growth.
LIC Nivesh Plus Plan 749: A single premium, unit-linked policy that provides insurance and investment benefits in one. The policyholder can select from four fund options, allowing more diversification compared to Index Plus. Nivesh Plus is ideal for policyholders seeking a single, significant investment with no recurring premium obligations, offering term flexibility from 10 to 25 years depending on the policy option chosen.
Also see: LIC Jeevan Umang 745 VS LIC Jeevan Utsav 771
Eligibility and Premium Requirements
| Criteria | LIC Index Plus | LIC Nivesh Plus Plan 749 |
|---|---|---|
| Minimum Premium | ₹30,000 (Yearly mode) | ₹1,25,000 (Single premium) |
| Maximum Premium | No limit | No limit |
| Entry Age | 90 days to 60 years | 90 days to 70 years for low-risk option; up to 35 for higher-risk |
| Policy Term | 10 to 25 years (depending on premium amount) | 10 to 25 years (option-dependent) |
| Maturity Age | Up to 85 years | Up to 85 years for lower sum assured; 50 years for higher sum assured |
Both policies offer flexible entry and maturity ages, though Index Plus allows a wider range for premium frequency. In contrast, Nivesh Plus focuses on a lump-sum premium, targeting policyholders preferring a one-time commitment.
Also see: LIC Jeevan Tarun Plan 734
Sum Assured Options
- LIC Index Plus provides sum assured options at 7 or 10 times the annualized premium, based on the entry age.
- LIC Nivesh Plus Plan 749 offers sum assured options at 1.25 or 10 times the single premium, allowing flexibility for lower or higher insurance coverage with the same investment.
Investment Fund Choices
| Fund Type | LIC Index Plus | LIC Nivesh Plus Plan 749 |
|---|---|---|
| Flexibility | 2 fund options (Flexi Growth, Flexi Smart Growth) | 4 fund options (Bond, Secured, Balanced, Growth) |
| Risk Profile | High-risk profile due to equity focus | Variety, from low (Bond) to high risk (Growth) |
| Objective | Long-term capital appreciation | Options for both income-focused and growth-oriented investors |
Nivesh Plus offers a broader array of fund types, accommodating different risk appetites. Index Plus, with only high-risk funds, is ideal for those prioritizing equity-based returns. The Nivesh Plus policy allows a more tailored investment approach with low- to high-risk funds.
Also see: LIC Bima Shree Plan 748
Guaranteed Additions
Both plans offer guaranteed additions as an incentive for holding the policy:
- Index Plus: Guaranteed additions range from 3% to 30% of the annualized premium, credited at specific policy years (6, 10, 15, 20, and 25 years).
- Nivesh Plus: Additions range from 3% to 7% of the single premium, allocated to the unit fund on completion of policy years 6, 10, 15, 20, and 25.
These additions boost fund value over time, rewarding policyholders for staying invested.
Benefits: Death and Maturity
Death Benefit:
- Index Plus: The death benefit is the higher of the sum assured reduced by withdrawals, the fund value, or 105% of premiums, ensuring comprehensive coverage for beneficiaries.
- Nivesh Plus: The death benefit is the higher of the sum assured (after deductions for withdrawals) or the fund value, also providing a secure financial backup.
Maturity Benefit:
- For both policies, the maturity benefit is the fund value at the policy’s end date.
This structure caters to policyholders prioritizing either a high sum assured or investment growth, depending on their chosen fund.
Also see: LIC New Jeevan Anand Plan 715
Partial Withdrawals and Liquidity
Both policies allow partial withdrawals after the 5-year lock-in period, though Index Plus has a structured withdrawal limit based on policy year:
- Index Plus: Up to 35% of the fund value post lock-in, gradually increasing.
- Nivesh Plus: Flexible withdrawals with no maximum percentage limit mentioned, as long as a minimum balance is maintained.
Additional Benefits and Riders
Both policies offer the LIC’s Linked Accident Benefit Rider, covering accidental death with an additional sum assured:
- Index Plus: Rider term extends until the policyholder reaches 70 years.
- Nivesh Plus: Similar in function, this rider can be canceled anytime but cannot be re-opted once removed.
These riders enhance coverage without significantly altering the investment aspect of the policies.
Charges and Fees
| Charge Type | LIC Index Plus | LIC Nivesh Plus Plan 749 |
|---|---|---|
| Premium Allocation Charge | 8% for offline and 3% for online sale | 3.3% offline, 1.5% online |
| Fund Management Charge | 1.35% for active funds, 0.50% for discontinued funds | 1.35% for active funds, 0.50% for discontinued funds |
| Policy Administration Charge | Applicable after 5th policy year | No policy administration charges |
| Partial Withdrawal Charge | ₹100 per withdrawal | ₹100 per withdrawal |
| Switching Charge | ₹100 per switch beyond 4 free switches | ₹100 per switch beyond 4 free switches |
The Nivesh Plus plan has lower allocation and fund management charges, making it potentially more cost-effective, especially for larger investments.
Surrender and Discontinuance Options
- Index Plus: Policyholders can surrender after 5 years; discontinuation before this period moves funds to a separate fund with minimal growth.
- Nivesh Plus: Allows for easy surrender after 5 years, with discontinuance charges varying depending on premium size and duration.
Both policies encourage continued investment to avoid loss through charges.
Conclusion
LIC Index Plus and LIC Nivesh Plus are tailored to different financial goals. Index Plus is best for those seeking recurring premiums and a steady investment over time, with a focus on high growth through equity funds. In contrast, Nivesh Plus suits policyholders preferring a one-time premium, diversified fund options, and lower charges. Each plan’s features reflect LIC’s goal to cater to both regular investors and those seeking a lump-sum investment.
Ultimately, the choice between these plans depends on the investor’s preference for premium payment structure, risk appetite, and flexibility in fund options.
FAQs
What is the main difference between LIC Index Plus and LIC Nivesh Plus?
LIC Index Plus is a regular premium unit-linked plan with limited high-risk fund options, aimed at long-term capital growth through equities. LIC Nivesh Plus, on the other hand, is a single premium plan offering four fund choices (from low to high risk), making it more versatile for policyholders with diverse investment preferences.
Can I withdraw funds partially from both LIC Index Plus and Nivesh Plus?
Yes, both plans allow partial withdrawals after a 5-year lock-in period. Index Plus has structured withdrawal limits that increase with policy duration, while Nivesh Plus provides flexible withdrawals, as long as a minimum balance remains.
What guaranteed additions are available in LIC Index Plus and Nivesh Plus?
Index Plus offers guaranteed additions ranging from 3% to 30% of the annual premium at specified intervals, while Nivesh Plus provides additions from 3% to 7% of the single premium, credited at policy years 6, 10, 15, 20, and 25.
What fund options are available in these plans?
LIC Index Plus has two high-risk fund options: Flexi Growth and Flexi Smart Growth funds. Nivesh Plus offers four funds (Bond, Secured, Balanced, and Growth), catering to various risk levels, from low-risk (Bond Fund) to high-risk (Growth Fund).
Are there any differences in charges between LIC Index Plus and Nivesh Plus?
Yes, Index Plus has higher premium allocation charges (8% offline, 3% online), while Nivesh Plus offers lower charges (3.3% offline, 1.5% online). Both plans have a 1.35% fund management charge, but only Index Plus has a policy administration charge starting from the 6th policy year.
Disclaimer: This article provides a comparative overview of LIC Index Plus and LIC Nivesh Plus plans based on available information. It is for informational purposes only and does not constitute financial advice. Policyholders should consult LIC representatives or certified financial advisors to understand the terms, benefits, and risks involved, as individual needs and investment profiles may vary.