LIC claims that Market Plus I is a single plan but with double benefits and also claims to give you the investment as well as pension and let us see how well it works to say so. The plan does not allow partial withdrawal of units. It compulsorily utilizes the fund value of your unit to offer a pension based on the current annuity rates under the related annuity option.

Riders:
With this Market Plus 1, you can add in extra riders or benefits of critical illness or accident benefit options by paying in extra premium.

Charges and Premium:
Also there is no surrender charge applicable for this particular ULIP plan from LIC and is said to be the most popular and successful ULIP plan from LIC. The minimum single premium is Rs. 30,000 while the minimum annual premium being Rs. 15,000.

Benefits of LIC Market Plus 1:

• Offers the option of buying with or without the life insurance cover.
• Offers three attractive benefits including death benefit, accident benefit and critical illness benefit, if you choose the plan with life insurance cover.
• Offers the flexibility to choose the premium payment terms – You can pay the premiums either in a single premium or by regular premium payment terms. You can choose monthly, quarterly, half-yearly or yearly modes.
• Allows you to change or switch the fund type up to four times a year at free of cost.
  Offers top-up or additional premium option – You can pay additional premium in multiples of Rs.1, 000 without any limit whenever you like during the policy term.
• Enables you to revive a lapsed policy during a period of two years from the first unpaid premium due date.

The current and updated LIC Market Plus 1 NAV as on March 19, 2010 is 11.67 for bond fund, 12.22 for secured fund, 12.34 for balanced fund and 13.43 for the growth fund.

It is left to us, the investors to think twice before investing in such ULIP policies and it is not always as bright as it looks when it comes to ULIPs, as claimed by the over-selling agents. There have been instances of such ULIPs from LIC were being sold on false promises of returns of even 25% which is totally untrue and hence informed decision should be made before buying them, although they may give you marginal or better returns, we should think whether it is indeed worthy to go for it or not and this applies well enough for this LIC Market Plus 1 as well.

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Types of accounts:

• Tier I account of NPS was launched in May 2009, which is a non- withdrawable account. The tier I account does not allow you to withdraw any money before 60 years of age, which is the retirement age. Medical emergency and certain situations can be exceptions which can allow you to withdraw money. Tier I is mandatory for government servants
• The tier II account permits premature withdrawal, has been made public recently. It is almost like a savings account but to have a tier II account one needs to have an active tier I account first. Here, there are no limits to withdrawals.

Guidelines:

Pension Fund Regulatory and Development Authority (PFRDA) is the regulatory body of the NPS which has set cetrain guidelines:

• Minimum amount per contribution is  Rs. 500 for tier I and Rs. 250 for tier II.
• Minimum number of contributions in a year: 4
• Minimum contribution in a year in a subscriber account is Rs. 6000 for Tier I and Rs. 4000 for Tier II account.
• Defaulting on the the minimum annual contribution, a penalty of Rs. 100 per year will be charged and accoount will be de acitavted.

Investment options:

Currently, the funds are managed by six AMCs; State Bank of India, Kotak Mahindra, IDFC, UTI, ICICI Prudential and Reliance. There are three separate schemes, managed by the pension fund managers, all three investing in different asset classes.

• Fund E would mainly invest in equity markets, upto 50 per cent
• Fund G invests in government securities like GOI bonds or state government bonds.
• Fund C would invest in fixed income securities other than Govt. securities

The subscriber has the choice to decide where to invest among the three asset classes. There is also an ‘Auto Choice’ option which will invest in a pre determined fashion.

Till 35 years of age, the Auto choice invests 50% of wealth in E fund,  30 % in C fund and 20 % in G fund.

Related Posts:

• LIC Market Plus 1 Review