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
At maturity the mortality charges deducted are added back. Neither rate is guaranteed; the fund can earn more or less.
In short (tl;dr)
Protection Plus is LIC's unit linked plan for buyers who want large life cover from a ULIP. You choose a cover multiple from 5 or 7 times up to 40 times the annual premium, depending on age and paying term, and pay for 5, 7, 10 or 15 years. Six funds are on offer, top-ups are allowed, and LIC refunds every mortality charge at maturity.
What LIC Protection Plus is
The cover multiple is the main choice. A buyer aged 18 to 30 paying for 15 years can take up to 40 times an annual premium of Rs 60,000 or more; the ceiling falls with age and with shorter paying terms. The minimum is 7 times below age 50 and 5 times from 50.
Offline, LIC keeps 8% of each premium in year 1, 5.5% in years 2 to 5 and 3% after that. From year 6 a policy administration charge of Rs 85 a month (Rs 100 if the annual premium is Rs 60,000 or more) applies, rising 5% a year. All six funds charge 1.35% a year.
The monthly mortality charge is the cost of the large cover and comes out of your units, which is why a high multiple slows fund growth. LIC returns the full amount at maturity. There are no guaranteed additions in this plan.
Top-ups of Rs 1,000 or more add to a separate fund with cover of 1.25 times the top-up. Cover can be increased at marriage or the birth of a child, up to age 45.
- Cover from 5 or 7 up to 40 times the annual premium
- Pay for 5, 7, 10 or 15 years over terms of 10 to 25 years
- Six funds including two NIFTY-linked equity funds
- Top-ups, and cover increases at life events
- Mortality charges refunded at maturity
Who can buy it
| Entry age | 18 years (completed) to 65 (nearer birthday) |
|---|---|
| Maturity age | 18 to 90 |
| Policy term | 10 to 25 years |
| Premium | Yearly, Half-yearly, Quarterly, Monthly (NACH); maximum No limit, subject to LIC's board approved underwriting policy. Top-ups from Rs 1,000 in multiples of Rs 1,000. |
| Sum assured | Basic Sum Assured multiple of annualized premium |
- Ages are nearer birthday; the minimum entry age is 18 completed. Risk starts at once.
- Each top-up carries its own sum assured of 1.25 times the top-up.
- The sum assured can be raised within 12 months of marriage or the birth or adoption of a child, up to age 45, after underwriting; or reduced within the plan's limits.
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 | 3% | 1% |
| 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% |
| 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 figures reproduce with no GST.
- 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 base fund value and 105% of base premiums paid, plus the top-up death benefit if top-ups were made.
At maturity. The fund value 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, first from top-up funds that have completed their own 5 years (only the part above the top-up sum assured), then from the base fund.
- Minimum Rs 1,000 per withdrawal.
- 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 4 annualized premiums (AP below Rs 60,000) or 3 (other cases).
LIC's own illustration, run through this calculator
LIC's brochure prints a benefit illustration for age 35, 20-year term, 15 years' premiums of rs 40,000 yearly, cover 10 times (rs 4,00,000), offline, bond fund. The same inputs through this calculator give these fund values:
| Year | LIC at 4% | This calculator | LIC at 8% | This calculator |
|---|---|---|---|---|
| 6 | ₹2,44,336 | ₹2,44,336 | ₹2,80,285 | ₹2,80,285 |
| 10 | ₹4,31,115 | ₹4,31,115 | ₹5,38,276 | ₹5,38,276 |
| 15 | ₹6,92,547 | ₹6,92,547 | ₹9,66,808 | ₹9,66,807 |
| 20 | ₹7,81,306 | ₹7,81,306 | ₹13,20,333 | ₹13,20,332 |
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 one policy for both high life cover and market-linked savings, and can commit for a short paying term.
Watch out. A high cover multiple means a large monthly mortality charge out of the fund, especially at older ages. The refund comes only if the policy reaches maturity with every premium paid.
Sources: LIC's page for this plan, sales brochure (PDF) and policy document (PDF).
Other unit linked plans: Index Plus, SIIP.
LIC Protection Plus: common questions
What does LIC's example show for Protection Plus?
A 35 year old paying Rs 40,000 a year for 15 years, with Rs 4 lakh cover over a 20-year term, ends with Rs 7,81,306 at 4% gross or Rs 13,20,333 at 8%, including the mortality refund.
How high can the cover go?
Up to 40 times the annual premium for entry ages 18 to 30 with a 15-year paying term and an annual premium of Rs 60,000 or more. With a lower premium, only the 15-year paying term is open and the ceiling is 30 times.
Are there guaranteed additions?
No. Protection Plus has none, unlike Index Plus and SIIP.
Can I add money later?
Yes. Top-ups of Rs 1,000 or more can be paid while the policy is in force, except in the last five years. Each carries cover of 1.25 times the top-up and is locked for five years.
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.