Insurance Plans Reviews and Articles

Wealth Plus Insurance Policy from LIC

Posted in life insurance by kishosingh on March 16, 2010

Wealth Plus is a new offering of LIC. It is an 8-year fixed-term product. In this plan, LIC guarantees the highest Net Asset Value (NAV) recorded over the first seven years of the policy.

According to the economictimes.indiatimes.com, an online news portal, “Wealth Plus has two options — a single premium one and another plan where premium is payable for the first three years. The minimum annual premium is Rs 40,000 under the single premium option and Rs 20,000 under the 3-year premium paying term. The sum insured is a modest 1.25X the premium for single premium policies and 5X the annualised premium for policies with a 3-year payment term. The insurance cover continues for two years after the term of the policy.”

About the policy LIC states an example – “a 30-year old who invests a single premium of Rs 40,000 can look forward to getting back Rs 64,679 if the fund value appreciates 10% annually. If the appreciation is 6%, he can expect to get back Rs 47,377 at the end of eight years. On the other hand, if the same investor chooses to invest Rs 20,000 for the first three years, he can look forward to getting Rs 91,445 if the fund appreciates 10% and Rs 70,309 if the appreciation is 6%.”

In an analysis, the news portal writes, “In short, the working behind such products is that the highest NAV is assured by shifting assets to debt as timed by the fund manager. The downside is that the fund managers cannot allow spikes in the scheme’s NAV.”

Wealth Plus is the latest offering of Life Insurance Corporation. However, many other private life insurance companies have already launched the same plan in the insurance market.

Recently, Reliance has also launched highest NAV Guarantee Plan. We already have seen Guarantee Builder of Bharti AXA Life also. In this condition, Wealth Plus of LIC is only an insurance plan not a new plan.

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