LIC Fortune Plus policy, Table 187, is a Unit Linked Payment Endowment Plan, with effect from 23-08-2007, which offers Investment-Cum-Insurance during the term of the policy. During the first year, the level of life cover will depend on the policy term chosen & amount of premium payable. The policy holder’s fund value will be subject to deduction of charges.
Payment is limited to only 5 years under this LIC Fortune Plus plan for a selected term of 5 to 20 years. The payment of premium every year during 2nd to 5th year will be 25% of the 1st year premium. The allocated premium will be invested to buy units in any one of the following type of Funds chosen by the policy holder:
- SUC=Basic S.A. less 1st year premium paid
- MHR & Introduction: As per current rules
- Medical Exam. LIC cost borne
- As per Endowment Assurance Plan all conditions will be underwritten.
LIC Fortune Plus plan highlights:
- No Surrender Charge
- Option of AB Rider.
- Freedom to choose Premium.
- Facility of encasement of units in installments available at Maturity.
- Easy Liquidity (partial Withdrawal).
- Unlimited Switches from one Fund to other ( 4 free switches in a year).
- Life risk cover with good returns on Investment.
- Choice of 4 investment Funds as per ones risk appetite.
LIC Fortune Plus Special Reports:
For Majors: According to the existing Special Report Chart for Minor lives, plan will be allowed to std. lives only. For Minors: According to the chart (Cir.2090/4/1-11-2006). Taken together will apply to all the existing rules regarding max. S.A. allowed to minor live for all policies taken together will apply. Date of commencement of Risk is the date from which life assurance benefits can be enjoyed. Date of completion of the proposal is the D.O.C. of risk and D.O.C. Policy both.
1. LIC Fortune Plus Death Benefit: Nominee shall be eligible to get Basic S.A. or value of units held in Policyholder’s Fund whichever is higher, as at the booking of the liability in case of the Death of the Policyholder. Basic plan shall be reduced to the extent of amount of partial withdrawals made if partial withdrawals have been made during the last 2 years from the date of the death S.A. under. The value of units held in the Policyholder’s Fund shall become payable to the nominee, if less than three years’ premium have been paid & the policy is in lapsed condition.
2. LIC Fortune Plus Maturity Benefit: An amount equal to the value of the units held in Policyholder’s Fund is payable on the date of maturity of Policyholder’s surviving. More.
LIC Fortune Plus options:
Policyholder can opt for the Rider given below: Accident Benefit Rider (ABR) @0.50 per 1000
Accident Benefit S.A. per policy year: S.A. will become payable (in addition to the above mentioned Death Benefit), provided the AB cover is opted for and is in force. On the Accidental Death of the Policyholder during the term of the policy a sum equal to the Accident Benefit
The ABR Benefit can be opted from Policy Anniversary coinciding with or immediately following the completion of 18 yrs of age, if the Age at entry of the L.A. is less than 18 yrs. By the cancellation of appropriate units from the fund on a monthly basis, the charges for ABR if any will be deducted.
LIC Fortune Plus Charges:
Premium Allocation Charges: The balance known as allocation rate constitutes that part of the premium which is utilized to purchase units for the policy. This is the percentage of premium appropriated towards charges from the premium received.
Ex: if 20,000 is the Yearly premium then Allocation charge of Rs. 3,000 at 15%(See table below ) is deducted. Balance premium of purchase units. After purchasing units for Rs. 17,000 all other relevant charges will be deducted by canceling the units.
Mortality Charge is the cost of Life Insurance Cover (as per chart given): Mortality Charges during a policy year, will be based on Age (nbd) of the Policyholder, as the Policy Anniversary coinciding with the due date of cancellation of units. Hence charges may increase every year on each Policy Anniversary.
Mortality Charges shall depend upon the difference between the S.A. under the Basic plan and Fund Value of units as on the date of deduction, after deduction of all other charges( This shall be deducted only if, the Basic S.A. is more than the Fund Value of the units).
LIC Fortune Plus Other charges:
- Switching Charges: 4 switches will be allowed free of charge during the policy term within a given policy year between any Fund. Subsequent switches shall be subject to Rs.100/- per switch. Switching shall not be allowed under a lapsed policy.
- Bid/Offer Spread Charges: Nil
- Fund management Charge (FMC) per annum For: Bond Fund 0.75%; Balance Fund 0.75%; Secured Fund 1%; Secured Fund 1%; Balanced Fund 1.25%; Growth Fund 1.50%. The NAV, thus declared will be net FMC.
- Policy Administration Charges: Will be Rs. 2o per month thereafter throughout the term of the policy and Rs. 60 per month during the first policy year.
- Surrender Charges : Nil
- Service Tax Charges: At present Service tax charge @12.36% on risk premium shall be charge levied on Mortality & ABR charges, if any. This will be deducted monthly by canceling appropriate units.
- Premium Payment
- Partial Withdrawal
- Death Claim etc.
Extra Charge: Charge for higher EMR shall be multiples of Class I extra charge as applicable in other plans. The standard extra to be charged in case of Occupation, shall be the rates applicable to Endowment Plan. Mortality charges will include – health extra for sub – std. lives, standard extra for occupation, residence, etc. and age proof extra for NSAP-2 and NSAP-3. Class I extra charge for Life Cover will be 25% of the Mortality Charges for Std. Lives .
Levied for an alteration within the contract, such as reduction in policy term, grant of Accident Benefit after the issue of the policy, change in premium mode to higher frequency, change in premium mode to higher frequency, grant of Accident Benefit after the issue of the policy etc., may be allowed subject to a charge of Rs. 50/-.
Right to revise charges: LIC reserves the right to revise all or any of the above charges except Premium Allocation charge and Mortality Charge with prospective effect, after giving the Policyholders a notice of 3 months.
The Policyholder’s Fund Value will be subject to deduction of charges. Units will be allotted and canceled based on the NAV of the respective Funds as on the date of allotment/cancellation.
NAV (Net Asset Value): Bid Price and Offer Price of units will be equal to the NAV. It will be computed on daily basis and is bases on the investment performance, Fund Management Charges and whether fund is expanding or contracting under each Fund.
NAV will be based on the time, the request received. If received up to 3:00 pm, closing NAV of the day will be applicable. If received after 3:00 pm, next business day’s closing NAV will be applicable. Outstation Cheque/ D.D shall not be accepted.
Partial Withdrawals: After 3rd Policy Anniversary subject to certain conditions the Policyholder can partially withdraw the units anytime. Partial withdrawals may be in the form of fixed number of units or in the form of fixed amount. In case of minors, partial withdrawals allowed only on or after L.A. attains majority. For 2 years period from the date of withdrawals, the basic S.A. shall be reduced to the extent of the amount of partial withdrawals made.
Where less than 3 years’ premiums have been paid and further premiums are not paid, the partial withdrawals shall not be allowed. Where at least 3 years’ premiums have been paid, partial withdrawal will be allowed subject to a minimum balance of Rs.10000/- in the Policyholder’s Fund Value.
LIC Fortune Plus Grace Period: If premiums are not paid within the days of grace, the policy lapses. One calendar month but not less than 30 days will be allowed for payment of Yearly or Quarterly premiums and 15 days will be allowed if premiums are paid Monthly (ECS).
Revival / Discontinuance of premiums: The Period during which the policy can be “Revival Period”. Lapsed policy can be revived during the period of First Unpaid Premium (FUP) or before date of maturity, whichever is earlier. The Period during which the policy can be revived will be called “Revival Period”.
- If premiums have not been paid for at least 3 full years the policy may be revived within two years from the due date of FUP. Revival shall be made on submission of proof of continued insurability. During this period No Life or ABR Cover is available hence no charges are deducted for the same.
- If at least 3 years’ premiums have been paid and subsequent premiums are not paid, the policy may be revived within two years from the due of FUP, but before the date of maturity, if earlier. For Revival No proof of continued insurance. During this period, Life or ABR covered will be in force & the charges will be deducted as long as there is min. balance of Rs. 5,000 in the Fund (after deducting the charges).
In both the above cases of 1&2, all arrears of premium without interest can be paid.
There will be no surrender charge for LIC Fortune Plus. The surrender value, if any, is payable only after the completion of the 3rd policy anniversary. At the date of surrender the surrender value will be the value of units held in the Policyholder’s Fund.
Compulsory Surrender: In case the policy is not received during the period of revival, then the policy shall be terminated after completion of three years from the date of commencement of policy or on expiry of revival period, whichever is later of policy or on expiry of revival period, which is later or if the balance in the Fund Value falls below Rs. 5,000.
On month prior to the date of maturity Policyholder may exercise “Settlement Option” (For other conditions of Settlement Options you may after refer article under LIC Fortune Plus Table 187).