Formula
F′ = F + P × (1 − at) − A − (qx / 12) × R / 1000
F = F′ × (1 + i)1/12 × [2 − (1 + f)1/12]
R = max(S, F, 1.05% × premiums paid) − F
where
- F
- fund value, worked out each month
- P
- the premium, added in the months it is paid
- at
- premium allocation charge in policy year t
- A
- monthly policy administration charge
- qx
- mortality charge a year per ₹1,000 of sum at risk, at age x
- R
- sum at risk
- S
- sum assured
- i
- assumed gross return, 4% or 8% a year as IRDAI prescribes for illustrations
- f
- the fund's management charge a year
Guaranteed additions are credited at the end of the policy years LIC names. At maturity the mortality charges deducted are added back. Neither rate is guaranteed; the fund can earn more or less.
*Source LIC Index Plus brochure (PDF)
In short (tl;dr)
Index Plus is LIC's regular premium unit linked plan built on two equity funds that pick stocks from the NIFTY 100 and NIFTY 50. Life cover is 7 or 10 times the annual premium. LIC credits guaranteed additions to the fund in years 6, 10, 15, 20 and 25, and at maturity pays the fund value plus every mortality charge it deducted.
What LIC Index Plus is
Each premium, less an allocation charge, buys units in the Flexi Growth Fund or the Flexi Smart Growth Fund. Offline, the allocation charge is 8% in the first year, 5.5% in years 2 to 5 and 4% after that; online it is 3%, 2% and 1.5%. Both funds charge 1.35% a year through the NAV.
From year 6 a policy administration charge starts: the lower of 3.25% of the annual premium spread over 12 months and Rs 125 a month, rising 5% a year. Every month LIC also cancels units to pay for life cover on the gap between your sum assured and your fund. That cost stops once the fund passes the sum assured.
At years 6, 10, 15, 20 and 25 LIC adds a guaranteed addition worth 5%, 10%, 20%, 25% and 30% of one annual premium (3% to 18% if the annual premium is below Rs 48,000). On maturity you get the fund value and a refund of all the mortality charges taken over the term.
Money is locked in for five years. After that you can withdraw part of the fund each year or surrender for the fund value without a charge.
LIC lists this plan as on sale, with a plan page and an October 2024 policy document under UIN 512L354V01, and that is the basis for calling it on sale here. Its list of plans withdrawn in 2024-25 also names Plan 873 under the same UIN, and LIC does not say why. If you are buying, confirm with LIC or your agent that it is still offered.
- Two equity funds tracking select NIFTY 100 or NIFTY 50 stocks, FMC 1.35%
- Cover of 7 or 10 times the annual premium
- Guaranteed additions of up to 30% of one annual premium
- Mortality charges refunded at maturity
- No policy administration charge for the first five years
Who can buy it
| Entry age | 90 days (completed) to 60 (nearer birthday) |
|---|---|
| Maturity age | 18 to 85 |
| Policy term | 10 to 25 years |
| Premium | Yearly, Half-yearly, Quarterly, Monthly (NACH); maximum No limit, subject to LIC's board approved underwriting policy. |
| Sum assured | 10 times annualized premium; 7 times annualized premium |
- Ages are nearer birthday, except the 90-day entry minimum and the 18-year maturity minimum, which are completed.
- For a child under 8 at entry, risk starts on the earlier of 2 years from commencement or the anniversary on or after age 8. Before that the death benefit is the fund value.
- A policy on a minor vests in the life assured on the anniversary on or after age 18.
Charges that come out of the fund
The premium allocation charge is taken from each premium before it buys units:
| Policy year | Through an agent | Online |
|---|---|---|
| 1 | 8% | 3% |
| 2 | 5.5% | 2% |
| 3 | 5.5% | 2% |
| 4 | 5.5% | 2% |
| 5 | 5.5% | 2% |
| 6 onwards | 4% | 1.5% |
| Fund | Fund management charge | Equity |
|---|---|---|
| Flexi Growth Fund SFIN ULIF00510/11/23LICULIPFLX512 | 1.35% a year | 40% to 100% |
| Flexi Smart Growth Fund SFIN ULIF00610/11/23LICULIPFSG512 | 1.35% a year | 40% to 100% |
A mortality charge is taken every month on the sum at risk, and the total is added back to the fund at maturity. Switching: 4 free a year, then ₹100 each. Partial withdrawal: ₹100. Tax applies to charges at the prevailing rate. LIC's illustration says GST is currently exempted.
- Premium allocation charge not more than 12.5% of annualized premium in any year
- Policy administration charge not more than Rs 500 a month
- Partial withdrawal, switching and miscellaneous charges not more than Rs 500 each
- Fund management and discontinuance charges within IRDAI limits
What it pays
On death. The highest of the sum assured, the fund value and 105% of premiums paid, less partial withdrawals made in the two years before death. Before risk starts on a young child, the fund value.
At maturity. The fund value on the maturity date plus a refund of every mortality charge deducted.
There is a 5-year lock-in: nothing can be withdrawn and a discontinued policy's money sits in the Discontinued Policy Fund until it ends.
- Allowed after the 5-year lock-in; for a minor, only from age 18.
- Up to 20% of the fund a year in years 6 to 10, 25% in 11 to 15, 30% in 16 to 20, 35% in 21 to 25.
- The fund left must be at least 4 annualized premiums (AP below Rs 48,000) or 3 (other cases).
- Future guaranteed additions are scaled by fund value / (fund value + total withdrawals).
LIC's own illustration, run through this calculator
LIC's brochure prints a benefit illustration for age 30, 25-year term, rs 50,000 half-yearly, sum assured rs 10,00,000, offline, flexi growth fund. The same inputs through this calculator give these fund values:
| Year | LIC at 4% | This calculator | LIC at 8% | This calculator |
|---|---|---|---|---|
| 6 | ₹6,12,928 | ₹6,12,928 | ₹6,95,658 | ₹6,95,658 |
| 10 | ₹10,88,404 | ₹10,88,404 | ₹13,42,830 | ₹13,42,830 |
| 15 | ₹17,62,609 | ₹17,62,609 | ₹24,26,583 | ₹24,26,583 |
| 20 | ₹25,31,514 | ₹25,31,514 | ₹39,17,165 | ₹39,17,165 |
| 25 | ₹34,14,179 | ₹34,14,179 | ₹59,71,827 | ₹59,71,828 |
Fund values at the end of each policy year; the final year is the maturity value, which includes the mortality charges refunded at maturity. A difference of a rupee is rounding in LIC's printed table.
Good for, and what to watch
Good for. Someone who wants equity exposure tied to large Indian companies, can pay for at least 10 to 15 years and values getting the cost of cover back.
Watch out. Returns follow the market. Charges are front-loaded: 8% of each premium goes in year 1 offline. Stopping in the first five years moves the money to a low-return fund until year 5.
Sources: LIC's page for this plan, sales brochure (PDF) and policy document (PDF).
Other unit linked plans: SIIP, Protection Plus, Nivesh Plus.
LIC Index Plus: common questions
What does LIC's own example show for Index Plus?
A 30 year old paying Rs 1,00,000 a year in two half-yearly instalments for 25 years, with Rs 10 lakh cover, ends with Rs 34,14,179 if the fund earns 4% a year before charges, or Rs 59,71,827 at 8%. LIC puts the net yield at 8% gross at 6.30%.
How much of each premium is invested?
Offline, 92% in year 1, 94.5% in years 2 to 5 and 96% after that. Online, 97%, 98% and 98.5%.
When are the guaranteed additions paid?
At the end of years 6, 10, 15, 20 and 25, as long as every premium due has been paid. They go into the fund as extra units.
Do I really get the mortality charges back?
Yes, if you pay every premium and the policy runs to maturity. LIC adds the total mortality charge deducted, without tax or underwriting extras, to the maturity value. Surrendered or discontinued policies do not get it.
Can I take money out before maturity?
Not in the first five years. From year 6 you can withdraw up to 20% of the fund in a year, rising to 35% in years 21 to 25, as long as at least three or four annual premiums stay in the fund.
Spot something wrong?
If a figure on this page disagrees with an LIC premium notice, bonus statement or benefit illustration, tell us and we will check it against the brochure. Anything else you think this page gets wrong is just as welcome.