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, 0)
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. Neither rate is guaranteed; the fund can earn more or less.
*Source LIC Nivesh Plus brochure (PDF)
In short (tl;dr)
Nivesh Plus is LIC's single premium unit linked plan. You pay at least Rs 1,25,000 once, LIC keeps 3.3% (1.5% online) and invests the rest in a bond, secured, balanced or growth fund. Cover is either 1.25 or 10 times the premium, and LIC adds 3% to 7% of the premium to the fund at years 6, 10, 15, 20 and 25.
What LIC Nivesh Plus is
Nivesh Plus suits a lump sum. After the one-time allocation charge there is no policy administration charge at all. The fund pays 1.35% a year in fund management charges through its NAV, and the only other regular deduction is the mortality charge for life cover.
The choice of cover matters more here than in most plans. Option 1 sets the sum assured at 1.25 times the premium, so the fund soon exceeds it and the mortality charge falls to nothing. Option 2 sets it at 10 times the premium for entry ages up to 35, and the monthly charge on that larger gap comes straight out of your fund. There is no refund of mortality charges in this plan.
Guaranteed additions of 3%, 4%, 5%, 6% and 7% of the single premium arrive at the end of years 6, 10, 15, 20 and 25. After five years you can withdraw part of the fund each year or surrender for the full fund value.
- One premium from Rs 1,25,000, in multiples of Rs 5,000
- Cover of 1.25 or 10 times the premium
- Four funds from bond to growth, FMC 1.35%
- Guaranteed additions of 3% to 7% of the premium
- No policy administration charge
Who can buy it
| Entry age | 90 days (completed) to 70 (nearer birthday) |
|---|---|
| Maturity age | 18 to 85 |
| Policy term | 10 to 25 years |
| Premium | Single premium; maximum No limit. |
| Sum assured | Option 1: 1.25 times the single premium; Option 2: 10 times the single premium |
- The sum assured option is chosen at the start and cannot be changed.
- 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.
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 onwards | 3.3% | 1.5% |
| Fund | Fund management charge | Equity |
|---|---|---|
| Bond Fund SFIN ULIF00124/12/18LICULIPBND512 | 1.35% a year | Nil |
| Secured Fund SFIN ULIF00224/12/18LICULIPSEC512 | 1.35% a year | 15% to 55% |
| Balanced Fund SFIN ULIF00324/12/18LICULIPBAL512 | 1.35% a year | 30% to 70% |
| Growth Fund SFIN ULIF00424/12/18LICULIPGRW512 | 1.35% a year | 40% to 80% |
A mortality charge is taken every month on the sum at risk. Switching: 4 free a year, then ₹100 each. Partial withdrawal: ₹100. Tax applies to charges at the prevailing rate. LIC's illustration figures reproduce with no GST.
- 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 higher of the sum assured and the fund value, less partial withdrawals in the two years before death.
At maturity. The fund value on the maturity date.
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 fifth policy anniversary; for a minor, only from age 18.
- Up to 15% of the fund a year in years 6 to 10, 20% in 11 to 15, 25% in 16 to 20, 30% in 21 to 25.
- The fund left must be at least equal to the single premium.
LIC's own illustration, run through this calculator
LIC's brochure prints a benefit illustration for age 30, 20-year term, single premium rs 1,25,000, option 1 (cover rs 1,56,250), offline. The same inputs through this calculator give these fund values:
| Year | LIC at 4% | This calculator | LIC at 8% | This calculator |
|---|---|---|---|---|
| 6 | ₹1,44,618 | ₹1,44,618 | ₹1,80,579 | ₹1,80,580 |
| 15 | ₹1,94,309 | ₹1,94,309 | ₹3,33,016 | ₹3,33,016 |
| 20 | ₹2,28,559 | ₹2,28,559 | ₹4,65,044 | ₹4,65,044 |
Fund values at the end of each policy year; the final year is the maturity value. A difference of a rupee is rounding in LIC's printed table.
Good for, and what to watch
Good for. Someone with a lump sum who wants market-linked growth for 10 to 25 years and only modest life cover.
Watch out. Option 2's 10x cover is paid for out of the fund every month, which cuts the maturity value sharply: LIC's own example shows Rs 3,74,442 against Rs 4,65,044 under Option 1 at 8%.
Sources: LIC's page for this plan, sales brochure (PDF) and policy document (PDF).
Other unit linked plans: Index Plus, SIIP, New Pension Plus.
LIC Nivesh Plus: common questions
What does Rs 1,25,000 grow to in Nivesh Plus?
LIC's example for a 30 year old over 20 years: Rs 2,28,559 at 4% gross or Rs 4,65,044 at 8% under Option 1, and Rs 1,58,999 or Rs 3,74,442 under Option 2.
Which cover option should I pick?
Option 1 (1.25 times the premium) costs very little in mortality charges. Option 2 (10 times) gives real life cover but the cost comes out of your fund. It is open only up to entry age 35, and maturity must be by age 50.
Are there yearly charges besides fund management?
Only the mortality charge for cover, and the rider charge if you add accident cover. Nivesh Plus has no policy administration charge.
Do I get the mortality charges back?
No. Unlike Index Plus, SIIP and Protection Plus, Nivesh Plus has no refund of mortality charges.
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.