When it comes to securing your financial future, having a plan that combines insurance protection with investment growth can be a game-changer. LIC’s Index Plus plan offers exactly that! Whether you’re looking for long-term savings, market-linked returns, or life coverage, this plan is designed to provide a well-rounded financial solution.
In this blog, we’ll break down everything you need to know about LIC Index Plus, its features, benefits, and whether it’s the right fit for you.
What is LIC Index Plus?
LIC’s Index Plus is a Unit Linked Insurance Plan (ULIP) that offers:
✅ Life insurance coverage throughout the policy term
✅ Market-linked investment opportunities
✅ Guaranteed additions at specific milestones
✅ Flexible premium payment options
✅ Partial withdrawals after 5 years
Unlike traditional life insurance policies, this non-participating plan does not share LIC’s profits. However, it offers long-term wealth creation while ensuring financial security for your loved ones.
How Does LIC Index Plus Work?
1️⃣ Invest Your Premiums
- Your premiums are split into two components:
🔹 A portion goes towards life insurance coverage
🔹 The remaining amount is invested in market-linked funds
2️⃣ Fund Growth Over Time
- LIC invests your money into flexible market funds that align with your risk appetite.
- The Net Asset Value (NAV) of the units fluctuates based on market performance.
3️⃣ Guaranteed Additions
- At specific policy milestones (6, 10, 15, 20, and 25 years), LIC adds a bonus percentage to your investment.
4️⃣ Maturity or Death Benefit
- If you survive till maturity, you get the full Fund Value.
- In case of death, the nominee receives the highest of:
✅ Sum Assured (minus withdrawals)
✅ Fund Value
✅ 105% of premiums paid
Key Features of LIC Index Plus
🔹 1. Flexible Investment Options
You can choose your investment strategy based on your risk appetite:
- Flexi Growth Fund (Invests in NIFTY 100 stocks – Very High Risk)
- Flexi Smart Growth Fund (Invests in NIFTY 50 stocks – Very High Risk)
🔹 2. Guaranteed Additions for Extra Growth
LIC rewards policyholders with additional bonuses:
| Policy Year | Guaranteed Addition (as % of Annual Premium) |
|---|---|
| 6th Year | 3% – 5% |
| 10th Year | 6% – 10% |
| 15th Year | 12% – 20% |
| 20th Year | 15% – 25% |
| 25th Year | 18% – 30% |
💡 Higher premiums mean higher bonus percentages!
🔹 3. Death Benefit with Protection
In case of the policyholder’s demise, the nominee receives the highest value from:
- Basic Sum Assured (7x or 10x of annual premium)
- Fund Value (market-based growth)
- 105% of total premiums paid
📌 Security for your family while your money grows!
🔹 4. Partial Withdrawals for Financial Flexibility
After 5 years, you can withdraw a portion of your fund to meet your financial needs:
| Policy Year | Max Withdrawal % of Fund |
|---|---|
| 6 – 10 Years | 20% |
| 11 – 15 Years | 25% |
| 16 – 20 Years | 30% |
| 21 – 25 Years | 35% |
💰 Need money? You can withdraw while keeping your policy active!
Who Can Buy LIC Index Plus?
This plan is perfect for:
✔ Young professionals looking for long-term growth & life cover
✔ Investors with a market appetite who want ULIP benefits
✔ Parents planning for their child’s future
✔ Business owners seeking a mix of investment & protection
Comparing LIC Index Plus vs. Traditional Insurance Plans
| Feature | LIC Index Plus (ULIP) | Traditional Insurance (Endowment) |
|---|---|---|
| Risk Level | Market-Linked | Low-Risk, Fixed Returns |
| Returns | High Growth Potential | Fixed Returns |
| Liquidity | Partial Withdrawals Allowed | Locked Till Maturity |
| Investment Flexibility | Choose Funds | No Fund Selection |
| Best For | Growth-Oriented Investors | Conservative Investors |
Final Verdict: Is LIC Index Plus Worth It?
✅ Pros:
✔ Market-linked growth with NIFTY-based funds
✔ Life cover with flexible sum assured options
✔ Guaranteed additions boost your investment
✔ Partial withdrawals allow liquidity
✔ Option to switch between funds
❌ Cons:
⚠ Market fluctuations can affect returns
⚠ No liquidity before 5 years
Who Should Invest?
- If you are looking for long-term growth with insurance benefits, this plan is a great choice.
- However, if you prefer guaranteed returns, you may want to explore traditional insurance plans instead.
Final Thought:
📌 LIC’s Index Plus plan is best suited for investors with a long-term vision who want to grow their wealth while ensuring financial security for their family. If you’re comfortable with market risks and want life cover plus investment benefits, this plan could be a smart financial move.
🔍 Want to learn more? talk to our advisor today! Check current NAV of LIC Index Plus
