LIC Future plus Plan no – 172 Review

LIC Future Plus Policy Review

Plan No 172

Introduction about LIC Future Plus policy Plan no – 172

Lic’s Future plus policy was INTRODUCED ON – 4/3/2005 and WITHDRAWN ON- 1/7/2006. Lic Future plus policy is unit linked deferred pension plan where the policyholder can choose with or without risk cover.

It offers Critical Illness Rider, Accident Benefit Rider, both optional. But both the riders or any of the rider can be taken only if the Basic plan is taken with Life cover. Units will be allotted based on the Net Asset Value (NAV) of the respective fund. 

Bid-offer spread is not available under Future plus policy. The NAV (Net Asset Value) will be declared on a daily basis and will be based on the investment performance under each fund type.

Lic Future Plus Plan Parameters

Age at entry:                          Minimum:    18 years completed

                                              Maximum:   65 years nearer birthday. 

Age at vesting:                      Minimum:     40 years LBD (Last birthday)

                                              Maximum:    75 years LBD (Last birthday) 

Policy term:                           Minimum:      5 years

                                              Maximum:     57 years 

Mode of payment:                 Yearly, Half-yearly or single

Premium amount:                 Minimum:      Rs. 5000/- for regular premium

                                                                     Rs. 10000/- for single premium

                                              Maximum:     No limit.

Rebate:                                     Sum assured:  No rebate

                                                 Mode rebate:   No rebate

Sum Assured:

Minimum sum assured – without life cover:    No restriction.

Minimum sum assured – with life cover:

Regular premium policies like yearly, half yearly.	Rs. 50,000/-Sum assured will be in multiple of Rs. 5000
Single premium policies	Rs. 25,000/-

Maximum sum assured:             No restrictions       

Lic Future Plus Plan Benefits

Maturity Benefits: Benefits on Vesting

On the survival of the policyholder up to the vesting date, the bid value of the units held in the

policyholders account will be utilized to provide a pension based on the then prevailing immediate annuity rates under relevant annuity options. 

Under Future Plus policy, the policyholder have to intimate his/ her choice of annuity option to the Corporation 6 months prior to the vesting date.  An option will also be there to commute up to one-third of the Bid Value of the units held in the Policyholder’s Unit Account which shall be paid as a lump sum.

There will also be an option to purchase pension from any other insurance company. But the policyholder will have to inform LIC 6 months prior to the vesting date. Then the bid value in

policyholders unit account will be transferred directly to the chosen company.

If in case the amount of bid value at the vesting date is insufficient to purchase the minimum amount of pension allowed by LIC, then the balance in the Policyholder’s Unit Account at the vesting date shall be refunded to the Policyholder.

If premiums have been paid for less than 3 years and no further premiums are duly paid, then the policy will become paid up and

Maturity claim = bid value of units held in policyholders’ unit account – surrender charges (if any)

If premiums have been paid for 3 years or more and further premiums are not duly paid, then the policy will become paid up and 

Maturity claim = bid value of units held in policyholders’ unit account + surrender charges (if any)

Death Benefits:

1) Suicide:

If Life insured commits suicide at any time on or after the date on which the risk has commenced but before expiry of 1 year from date of commencement of risk, and the policy is with life cover or without life cover, then

Death claim will be payable to the extent of bid value of units held in the policyholders unit account.

2) Policy with life cover and date of death before or on the due date of policy or within auto

   cover period:

If death of the life assured takes place within policy term and death date is before or on the date of FUP (First Unpaid Premium), then

Death claim = Sum Assured under Basic plan + bid value of units held in policyholders’ unit account as per NAV as on the date of intimation.

If the death takes place as on the due date of premium, then

Death claim = life cover charge + Accident Benefit + Critical illness rider charge of the premium due

If the death is accidental, then

Death claim = life cover charge + Accident Benefit + Critical illness rider charge of the premium due + accident benefit sum assured

If premiums have been paid for less than 3 years and further premiums have not been duly paid, then

auto cover of 6 months from due date of FUP (First Unpaid Premium) is available.

If death occurs during this 6 month period, then

Death claim = sum assured under basic plan + bid value of units held in policyholders

unit account as on the date of intimation.

If premiums have been paid for 3 years or more and further premiums have not been duly paid, then

Auto cover facility will be available throughout remaining policy term, subject to minimum balance condition.

Death claim amount may be paid in lump sum or in the form of pension as per the choice of the nominee.

Policy without life cover:

If policy is taken without life cover, then there will be no auto cover, hence

Death claim = bid value of units held in policyholders’ unit account as on the date of intimation.

If the nominee opts for the pension, then  as per prevailing immediate annuity rates,

he/she has the choice to take one-third of the amount as lump sum and the balance in the form of annuity.

Options under  Lic Future Plus Plan

Eligibility conditions for Accident Benefit:

Accident Benefit can be availed of as an optional Rider benefit by paying an additional premium of Rs.0.50 for every Rs.1,000/- of the Accident Benefit Sum Assured per policy year.

This benefit will be available only if the policy taken is with Life Cover up to Basic Sum Assured under the plan Subject to overall limit of Rs 50 lacs.

On accidental death of the policyholder during the policy term,

a sum equal to the Accidental Benefit Sum Assured will be payable provided the policy is in force.

Sum assured	Minimum :   Rs. 25,000 provided sum assured under the basic plan is 25,000 and more.Maximum :  Rs. 50.00 lakh taking accident benefit under all policies taken together.
Age at entry	Minimum  :   18 years completed Maximum :  65 years nearer birthday.
Age at vesting	Maximum :  70 years

Eligibility conditions for Critical Illness Rider (CIR):

Critical Illness Rider (CIR) sum assured will be payable on certain terms and conditions, provided the policy is in force. This benefit will be available only if the policy taken is with Life Cover up to Basic Sum Assured only under the plan Subject to overall limit of Rs 5 lacs.

Sum assured	Minimum :   Rs. 50,000 provided sum assured under the basicplan is 50,000 and more.Maximum :  Rs. 5.00 lakh taking CIR sum assured under allpolicies taken together.
Age at entry	Minimum  :   18 years completedMaximum :   50 years nearer birthday.
Age at vesting	Maximum :  60 years

Other benefits of Lic Future Plus Plan 

Investment Fund Types:

Four types of funds are available under Lic’s Future plus plan. The policyholder will have the option to choose any one of the below funds. If in case, no fund option is opted for, then by default, allocated premium shall be invested in the income fund.

FUTURE PLUS (172)		Launch Date:04/03/2005
Balanced	ULIF003040305LICFUT+BAL512	10.00	23.4556	23.4556	23.4556
Bond	ULIF001040305LICFUT+BND512	10.00	19.3475	19.3475	19.3475
Growth	ULIF004040305LICFUT+GRW512	10.00	35.4461	35.4461	35.4461
Income	ULIF002040305LICFUT+INC512	10.00	22.6005	22.6005	22.6005

 Switching over of Investment fund type:

During the policy term, the policyholder can switch between any Fund types. Within one policy year, 4 switches will be allowed free of charge. Any further switches within a year shall be allowed with a switch charge of Rs. 100 per switch.

For one month, the NAV under all funds will be Rs.10/-, from the date of launch.

Allocation of premium:

Under Lic’s Future plus plan, the  premium received shall be allocated into,

1) Unit Fund

2) Non Unit Fund 

Unit fund:

Unit fund consists of unit capital account and unit capital premium account.

No. of units = Allocated Premium amount

                      Net asset value( NAV)

(No. of units are to be rounded of up to 3 decimals)

Non Unit Fund:

Non unit fund consists of commission charge + Development Officers’ Incentive Bonus + Service Tax on commission charge + initial administrative charges.

Single premium:

Premium Band	Allocation rate per Rs. 1/-
10000 to 19000	0.9600
20000 to 49000	0.9700
50000 to 99000	0.9775
100000 to 499000	0.9815
500000 & above	0.9835

On 1st policy anniversary,  

Amount to be allocated to non-unit fund = (1 – allocation rate) x single premium is to be deducted from unit fund by cancelling appropriate no of units.

Regular Premium: Yearly, Half yearly

Premium band per annum	Allocation rate per Rs. 1/-
	1st &2nd year            3rd year & onwards
5000 to 9000	0.8700                                        0.9750
10000 to 19000	0.8950                                        0.9750
20000 to 49000	0.9075                                        0.9750
50000 to 99000	0.9150                                        0.9750
100000 to 499000	0.9175                                        0.9750
500000 & above	0.9200                                         0.9750

In case of half-yearly premiums, for deciding allocation rate ,half-yearly premium should be multiplied by 2 and then premium band should be referred.  

The allocation rate for Top-up or additional premium under single or regular premium will be 0.9875.

Top up premium:

The policyholder can pay Top-up or additional premium in multiples of Rs.1,000/- without any limit at anytime during the policy term. In case of half-yearly or yearly mode of premium payment such Top-up can be paid only if all due premiums have been paid.

Recovery of charges and frequency of charges:

we arrive at the total no. of units under Policyholders’ Unit Capital Account after receipt of premium and after arriving at the allocated premium. The following charges from this shall be deducted as no. of units and not as the sum of charges.

=     Total sum of all the following charges

         NAV as on the date of deduction                    (to be calculated up to 3 decimals)

Charges under Lic Future Plus Plan

Mortality (life cover) and critical illness benefit charges:

Mortality (life cover) and critical illness benefit charges will be taken every month by cancelling appropriate no. of units out of policyholders’ unit account as per rate given in Annexure.

Charges for Morality and critical illness rider will be based on the life insured’s age as at the

policy anniversary coinciding with or immediately preceding the due date of cancellation of units. Hence charges for life cover & CIB will increase every year. They will be deducted only if the life cover is opted for. 

Accident Benefit Charges:

Rate of accident benefit is on yearly basis. If accident benefit cover is opted for, 0.50 paise per 1000/- SA of accident benefit per policy year will be deducted by cancelling no. of units from policyholders’ unit account on monthly basis. 

Flat fee:

A flat fee of Rs 15/- per month will be charged throughout the policy term, by cancelling appropriate no. of units out policyholders’ unit account, regardless of Sum Assured, Premium amount.

Administrative charges:

If the policy taken is with life cover, administrative charges will be Rs 1/- per 1000 Sum Assured under the basic plan subject to maximum of Rs 1000/-. The charges will be deducted in first 2 years only.

If the policy is taken without life cover then charges will not be deducted as Sum Assured here is zero. 

Policy Charge:

If the policy is taken with life cover, then policy charge of 0.10 paise per 1000 Sum Assured under the basic plan will be recovered in first 2 years of the policy.

If the policy is taken without life cover then the policy charge of 0.10 paise per 1000 of the

total premiums will be payable throughout the term of the policy and the same will be recovered in first 2 years of the policy.

Service Tax Charge:

Service Tax will be charged on the Life cover, Accident Benefit & critical illness rider if any and the same will be deducted on monthly basis by cancelling appropriate units from the policyholders’ unit account. Rates of service tax charge will be declared from time to time. For information about Tax on Life Insurance Policies www.taxqueries.in

Fund Management Charge:

Fund Management Charge will not be deducted from Individual Policyholders’ Unit A/c.  

It will be deducted as a percentage of the fund on the computation date of NAV from total amount available under each type of fund.

Bond Fund     – 1% p.a. of unit fund

Income Fund  – 1% p.a. of unit fund

Balance Fund – 1.25% p.a. of unit fund

Growth Fund  – 1.50% p.a. of unit fund

Right to revise charges:

Corporation reserves the right to revise all or any of the above charges. The right to change the manner in which charges are to be recovered is also included. If needed Corporation may also introduce new charges

If life assured does not agree with modified charges, he will be allowed to withdraw units at the then prevailing bid value without any surrender charge.

Additional Information about Lic Future Plus Plan

Auto cover:

Under regular premium paying policies,

If premiums have been paid for less than 3 years & further premiums have not been duly paid then, auto cover will be available for a period of 6 months from the due date of first unpaid premium (FUP).

If premiums have been paid for 3 years or more and further premiums have not been duly paid, then the auto cover will be available throughout the term of the policy subject to minimum balance.

During the auto cover period any or all unpaid premiums can be paid anytime without any

requirements or late fee.

Days of Grace: 

Under Lic future plus plan Days of Grace is not available.

Paid up value:

Under regular premium policies if any premiums which have fallen due is not paid on the due date, policy will lapse. Still if the policy is taken with life cover, accident benefit and /or critical illness, these risk covers will continue subjected to the provisions of  auto cover.

Revival:

If premiums have been paid for less than 3 years and then the policy is lapsed,

policyholder can revive the policy any time during the PPT (premium paying term) but within 5 years from FUP , by paying all the unpaid premiums without interest on submission of proof of continued good health.

Charges for risk cover shall be deducted from date of lapse, on revival.

Underwriting rules:

The Basic Plan is taken without life cover will be available to all male and female lives and such policies shall be completed at Branch Office regardless of the level of premium.

If the policy is taken with life cover but without CIR, then the plan will be considered as endowment assurance plan for deciding medical/non medical.

If CIR (Critical Illness Rider) is opted under the policy then medical is compulsory. 

Increase and Decrease in Benefits:

Under Future plus plan, increase in benefits (life cover/accident benefit/critical illness rider) is not allowed.

But policyholder can decrease any or all of the risk cover once in a year during the term of the policy, provided all due premiums are paid under the policy.

Surrender value:

Policy cannot be reinstated, if once it is surrendered. Surrender value will depend on the mode of payment (single/regular premium), policy duration and number of premiums paid under the policy.

Surrender value = bid value of units held in the policyholders’ unit account on the date of surrender – surrender charges as per rules.

Alteration in mode of payment:

Alteration in mode of payment will be allowed without any deduction of alteration charges.

Loan:

Loan facility is not available under Lic Future plus plan.

Assignments and Nomination:

Under Future plus plan assignment will not be allowed but Nomination is allowed.

Policy Stamping:

If policy is taken with life cover, policy stamping will be at the rate of 20 paise per 1000 SA.

If policy is taken without life cover, policy stamping will be at the rate 20 paise per

1000 of the total premium payable throughout the term of the policy.