LIC is launching a new plan from 2nd March 2020. This LIC Nivesh Plus (Plan No.849) is a ULIP Single Premium Plan. Let us see the LIC Nivesh Plus (Plan No.849) features, benefits and review.
Features and Eligibility of LIC Nivesh Plan (Plan No.849)
Let us first try to understand the eligibility and features of this LIC Nivesh Plan (Plan No.849).
You noticed that it is a SINGLE PREMIUM ULIP PLAN. However, as this is a ULIP Plan, charges also matter to us. Hence, let us look for the charges under this plan.
The plan proposes to offer you the four types of fund choices with equity components ranging from 0% to 80%.
LIC Nivesh Plus (Plan No. 849) – Should you invest?
I feel pity with the kind of the product LIC luanching. Let us review the features one by one.
# Tax Saving RUSH-LIC knows the blood of Indian investors. Hence, usually during the peak period of the tax-saving rush of salaried, usually, LIC will launch such single premium plans. However, this time they came out with ULIP.
Hence, it is mainly a product to those salaried who are in RUSH of TAX SAVING by hook or crook.
# Expenses-When you are investing in any product, then the first thing you have to concentrate on is the expenses. Look at the expenses of this ULIP. Even though LIC claims there are NO POLICY ADMIN CHARGES, but you have to bear the initial Premium Allocation Charges (which is 3.3% for Offline and 1.5% for Online) and Fund Management Charges (1.35% of Unit Fund).
It is just pathetic the way LIC is thinking that by charging 1.35% Fund Management Charges, it can claim LESS expenses. Look at the total expense ratio of DIRECT Mutual Funds to this 1.35%. It is still high. If you look at Index Mutual Funds or ETF, LIC’s this Fund Management Charge is around 1% higher.
If you look at charges, I don’t think it is a worth product to consider.
# GUARANTEED ADDITION-As I said above, LIC knows the blood of the Indian investors. We are fond of a product which gives us Tax Benefits and GUARANTEE. However, look at what is GUARANTEED here. It is the maximum of 7% Guaranteed Addition for 25 years of the policy. Also, this is a % of Single Premium what you paid initially.
# Life Risk Coverage-The maximum coverage one can get is 10 times of your single premium. Suppose you are looking for Rs.1 Crore Life coverage, then you have to invest Rs.10 Lakh. Instead, why not buy the LIC’s online Tech Term Policy to cover your life risk than combining Insurance with Investment?
# Death Benefit-Under this plan, if death occurs before the commencement of risk, then the nominee will receive the FUND VALUE ONLY. However, if death occurs after the commencement of the risk, then the nominee will receive HIGHER of RISK COVERAGE or FUND VALUE.
But if you separate the Investment and Insurance, then in case of death at any point of time, you will receive the fund value from whatever you invested and also from term life insurance the full coverage amount.
Hence, thinking that it covers your life risk is a MYTH.
Conclusion:-As I pointed above, this product is launched with an intention to garner those customers who are desperate to save their tax by hook or crook. Stay away from such products as they neither be considered as best for Life Insurance nor for Investment purposes.
LIC launching one more new plan on 2nd March 2020. Take a look of that plan at “LIC SIIP (Plan No. 852) – Eligibility, Benefits and Review