Buy ULIP for Investment and Insurance now
As an investor, if you are considering purchasing a ULIP in 2024, two prominent options to look into are LIC Index Plus and LIC Nivesh Plus, which offer a blend of insurance protection and investment in market-linked funds, including index funds. Below is an overview of these plans, including their features, benefits, and how they integrate both insurance and index fund investment strategies.
1. LIC Index Plus
LIC Index Plus is a unit-linked Insurance Plan that offers policyholders the opportunity to invest in equity and debt markets through funds linked to stock market indices. It’s designed for individuals seeking a balance between life insurance protection and market-linked investment options.
Key Features of LIC ULIPs:
- Investment in Index Funds: The plan primarily focuses on investments in equity-indexed funds that track popular indices like the Nifty 50 or Sensex, providing you with the benefit of long-term capital appreciation linked to the performance of these indices.
- Life Insurance Cover: LIC Index Plus provides life insurance coverage throughout the policy tenure, ensuring that your family is financially secure in case of your untimely demise.
- Fund Options: It offers multiple fund options, including equity, debt, and balanced funds. However, its focus on index funds makes it attractive for individuals who prefer the lower costs and broad diversification that index funds provide.
- Premium Payment Options: The plan allows for both regular and single premium payments, providing flexibility depending on your financial situation.
- Switching Facility: You can switch between different fund options (e.g., from equity funds to debt funds) during the policy term, based on market conditions or personal investment preferences.
- Transparency: LIC Index Plus allows you to track the performance of your investments, which is ideal for investors who wish to monitor the progress of their funds linked to stock market indices.
Benefits of LIC Index Plus:
- Tax Benefits: Premiums paid are eligible for tax deductions under Section 80C, while the maturity benefits are tax-free under Section 10(10D), subject to conditions.
- Exposure to Market Growth: Since investments are linked to stock market indices, this plan offers the potential for higher returns compared to traditional insurance plans.
- Long-Term Growth: Index funds typically provide stable and consistent growth over the long term, benefiting from the broad market’s upward trajectory.
2. LIC Nivesh Plus
LIC Nivesh Plus is another ULIP offered by LIC that focuses on providing life insurance coverage while offering flexible investment options. This plan allows policyholders to invest in a variety of fund options, including equity, debt, and balanced funds.
Key Features ULIP:
- Multiple Fund Options: LIC Nivesh Plus offers a diverse selection of funds, including equity funds, debt funds, and balanced funds, allowing policyholders to diversify their portfolio based on their risk appetite.
- Unit Linked Plan: As a ULIP, LIC Nivesh Plus links your premiums to market-linked instruments, which means the policy’s performance depends on the value of the funds you select.
- Insurance Protection: Like other ULIPs, this plan also offers life insurance coverage, ensuring that your family is protected in the event of your death during the policy term.
- Flexible Premium Payment: LIC Nivesh Plus offers flexible premium payment options, including regular, limited, or single premium payment modes.
- Fund Switching Option: You have the flexibility to switch between different funds during the policy term, which can be beneficial for adapting to changing market conditions or personal investment preferences.
- Partial Withdrawal Option: This plan allows for partial withdrawals of the accumulated corpus after a certain period, giving you access to funds when needed.
Benefits of LIC Nivesh Plus:
- Tax Benefits: Like other ULIPs, premiums paid under LIC Nivesh Plus qualify for tax deductions under Section 80C, and the maturity benefits are tax-free under Section 10(10D).
- Risk Management: The plan offers a balance between equity exposure (higher risk, higher returns) and debt exposure (lower risk, stable returns), enabling policyholders to manage their risk exposure effectively.
- Long-Term Wealth Creation: With the potential to invest in market-linked funds, LIC Nivesh Plus is an excellent tool for wealth accumulation, especially when you have a long-term investment horizon.
Why you should buy ULIP
Eligibility | LIC Index Plus policy | LIC Nivesh Plus policy |
---|---|---|
Premium starts from | Rs. 30,000/- yearly or Rs. 2500/- per month | ₹1,25,000 (Single premium) |
Premium max. paid | There is no limit on maximum premium | There is no limit on maximum premium |
Allowed from age | From [90] Days (completed) To [50] years (nearer birthday) | From 90 days To 70 years, Option 1 & 2 depending on the age |
Policy Term | 10 to 25 years (depending on premium amount) | 10 to 25 years (option-dependent) |
Maturity at Age | Up to 85 years | Up to 85 years for lower sum assured; 50 years for higher sum assured |
Comparing LIC Index Plus vs LIC Nivesh Plus
Feature | LIC Index Plus | LIC Nivesh Plus |
---|---|---|
Type of Plan | ULIP with index-based funds | ULIP with a four fund options |
Fund Options | Focus on equity-index funds (Nifty 50 and Sensex) | 4 Multiple fund options: equity, debt, and balanced funds |
Investment Focus | Primarily equity-indexed funds for market-linked growth | Balanced approach with equity and debt funds |
Switching Facility | Yes, between different fund options | Yes, between different fund options |
Life Insurance Coverage | Yes, provides life cover | Yes, provides life cover |
Tax Benefits | Tax deduction under 80C, maturity benefits tax-free | Tax deduction under 80C, maturity benefits tax-free |
Premium Payment | Regular or single premiums | Regular, limited, or single premiums |
Target Investors | Investors looking for market-linked returns through index funds | Investors seeking flexible investment and risk options |
Insurance and Index Funds Investment: Why Choose ULIPs?
ULIPs like LIC Index Plus and LIC Nivesh Plus provide the dual benefit of life insurance and investment in market-linked funds, including index funds. Here’s why investing in these plans can be beneficial:
Dual Benefit: ULIPs offer both life insurance protection and wealth creation through market-linked investments. This combination is ideal for individuals looking for both safety (insurance) and growth (investments).
Index Funds Exposure: Investing in index funds through LIC ULIPs is a cost-effective way to gain exposure to the stock market. These funds replicate the performance of an index, providing broad diversification and potentially strong long-term returns.
Tax Efficiency: ULIPs are tax-efficient products, offering deductions under Section 80C for premiums paid and tax-free maturity benefits under Section 10(10D).
Flexibility: With ULIPs like LIC Index Plus and LIC Nivesh Plus, you have the flexibility to switch between different fund types as per your financial goals and risk tolerance. This flexibility is crucial for adapting to changing market conditions.
Transparency and Control: ULIPs allow policyholders to monitor the performance of their funds, giving them greater control over their investments. This is particularly important for investors who want to track their investments linked to market indices.
There is no comparison between Both LIC Index Plus and LIC Nivesh Plus offer an excellent opportunity to combine life insurance coverage with market-linked investments in index funds. These plans are ideal for individuals seeking to achieve long-term wealth creation through exposure to the equity market while ensuring financial security for their loved ones. Depending on your investment goals and risk appetite, you can choose the plan that best aligns with your financial objectives. Always ensure to evaluate your investment horizon, risk tolerance, and life insurance needs before making a decision.