LIC new index plus plan 873
Life Insurance Corporation of India (LIC) has been the go-to choice for individuals when it comes to life insurance. But, apart from providing traditional insurance policies, LIC also offers investment options for those who are looking for avenues to grow their wealth. One such policy is the LIC Index Plus Plan 873 - a unit-linked, non-participating, individual life insurance plan that offers dual benefits of insurance coverage and investment opportunities. Let us delve deeper into the details of this plan and understand why it can be an ideal choice for your investment portfolio.
Overview of LIC Index Plus Plan 873
LIC Index Plus Plan 873 is a market-linked plan where the premium paid by you is directed towards various investment funds that are linked to the performance of equity and debt markets. This plan offers flexibility, transparency and the potential to earn attractive returns. You can choose from four investment funds - Bond Fund, Secured Fund, Balanced Fund, and Growth Fund - based on your risk appetite and financial goals. You can also switch between these funds during the policy term as per your changing investment needs.
Key Features of LIC Index Plus Plan 873
1. Dual Benefit: This plan offers the dual benefit of insurance coverage and investment opportunities. The sum assured payable in case of the unfortunate demise of the policyholder during the term of the policy is the higher of 10 times the annualized premium or the fund value.
2. Flexibility: You have the flexibility to choose from a policy term of 10, 15, or 20 years as per your convenience. Moreover, you can also choose the premium paying frequency - annual, half-yearly, quarterly, or monthly - based on your cash flow needs.
3. Partial Withdrawals: Under this plan, you can make partial withdrawals after completion of five policy years, subject to a minimum amount of Rs. 2,000. This can help you meet any unforeseen financial emergencies during the policy term.
4. No Premium Allocation and Policy Administration Charges: Unlike other unit-linked plans, the LIC Index Plus Plan 873 doesn't levy premium allocation and policy administration charges, thus enhancing your overall returns on investment.
5. Tax Benefits: The premiums paid towards this plan are eligible for tax deductions under Section 80C of the Income Tax Act, 1961, up to a maximum of Rs. 1.5 lakhs. Moreover, the maturity amount received is also tax-free under Section 10(10D).
How Does the Plan Work?
Let's understand the working of this plan with the help of an example. Suppose Mr. X, aged 35 years, purchases the LIC Index Plus Plan 873 with a policy term of 20 years and an annual premium of Rs. 50,000. He chooses the Growth Fund which carries a higher risk but has the potential to offer higher returns. Assuming an 8% return on his investments, he will get a lump sum amount of approximately Rs. 19.5 lakhs at maturity. In case of his unfortunate demise during the policy term, his nominee would receive a minimum of Rs. 5 lakhs (10 times the annual premium) or the fund value, whichever is higher.
Final Words
Investments are an integral part of everyone's financial planning, and having a life insurance-cum-investment plan like LIC Index Plus Plan 873 in your portfolio can be a wise decision. It provides the benefit of both insurance coverage and investment opportunities, along with flexibility and tax benefits. However, before making any investment decisions, it is advisable to consult a financial advisor who can assess your financial goals and risk appetite and suggest the best investment options for you. So, make the most of your hard-earned money by investing in the right plan for a secure financial future.
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