LIC Safety Plus (Plan 886) is a brand new non-participating ULIP (Unit Linked Insurance coverage Plan) from LIC that mixes life cowl with market‑linked financial savings.
LIC’s Safety Plus is a non-par, linked, particular person life insurance coverage financial savings plan, i.e., a ULIP the place your premiums are invested in market-linked funds whereas additionally offering life cowl throughout the coverage time period.
This implies it isn’t tied to conventional bonus declarations however invests in a fund (unit-linked), providing each insurance coverage cowl and potential fund development. The plan is out there from 3 December 2025 for Indian residents by LIC branches/brokers and the LIC web site.
What are ULIPs? ULIPs are life insurance coverage insurance policies with the twin objective of offering an insurance coverage cowl in addition to earn you a return by investing in fairness and/or debt oriented securities. The insurance coverage firm floats totally different sorts of funds, similar to the mutual fund home, to assemble cash from traders. It then invests this pooled cash throughout belongings like shares, bonds and so on.,
The important thing options which might be provided by LIC’s Safety plan are; alternative of funds, the power to extend/lower sum assured, pay top-up premiums, and permit partial withdrawals after a lock-in interval
LIC Safety Plus – Options
- Kind: Non-par, linked, life, particular person, financial savings plan (ULIP).
- Entry age: Minimal 18 years; most 65 years (age restrictions might differ by time period/choice).
- Coverage time period: Broadly 10 to 25 years (topic to most maturity age)
- Premium cost choices: Common premium
- Restricted premium cost (5, 7, 10, 15 years)
- Primary Sum Assured (minimal) : 7 occasions of annualized premium for entry age beneath 50 and 5 occasions annualized premium for entry age 50 or extra.
- Flexibility : Policyholders can select how a lot premium (topic to minimal) they need to pay. Primarily based on that premium, the Primary Sum Assured (loss of life cowl) is decided.
- Optionally available “Prime-Up” Premiums: You’re allowed to make extra (top-up) premium funds past the bottom premium — which will get invested within the fund to extend your maturity profit. Prime-up premiums will be paid at any time throughout the time period of the coverage, besides over the last 5 coverage years, supplied the coverage is in-force
- Partial withdrawal facility: After 5 years from the beginning of the coverage, partial withdrawals are allowed.
- Maturity Profit :
- On survival to the maturity date, the policyholder receives the Unit Fund Worth as on the date of maturity
- Particular function : Refund of mortality prices (value of life cowl) on survival until the date of maturity
- Funding Fund Choices :
- Safety Plus presents a number of ULIP funds with totally different risk-return profiles, starting from conservative bond-oriented funds to aggressive equity-linked funds.
- Typical fund buckets embrace:
- Bond / income-focused fund with low fairness publicity and decrease danger.
- Secured / balanced funds with a mixture of fairness and debt for reasonable danger.
- Progress / flexi fairness funds with larger fairness allocation (together with Nifty-based methods) for larger long-term return potential however larger volatility.
- Policyholders can select a number of funds (as allowed) and have a restricted variety of free switches per yr, after which a small cost applies. Throughout a given coverage yr, 4 switches shall be allowed freed from cost. Subsequent switches shall be topic to a switching cost of Rs.100 per change.
Expenses Below LIC Safety Plus Plan
These prices straight influence funding returns, so long-term traders ought to evaluate the profit illustration fastidiously earlier than shopping for. Whereas precise cost slabs differ by premium quantity and channel (on-line vs offline), the primary prices are:
- Premium allocation cost (larger in first yr, decrease in later years; decrease charges for on-line buy in comparison with offline).
| Coverage Yr | For Offline Sale | For On-line Sale |
|---|---|---|
| First Yr | 8.00% | 3.00% |
| 2nd to fifth Yr | 5.50% | 2.00% |
| Thereafter | 3.00% | 1.00% |
- Fund administration cost (round 1.35% p.a. of fund worth, adjusted in NAV each day). And 0.50% p.a. of Unit Fund for Discontinued Coverage Fund.
- Coverage administration cost (nil for first 5 years, then a set month-to-month quantity with gradual escalation, topic to a cap).
| Coverage Yr | Coverage Administration Expenses |
|---|---|
| First 5 Years | NIL |
| Yr 6 | – Annualized Premium lower than ₹60,000: ₹85 monthly – Annualized Premium equal to or higher than ₹60,000: ₹100 monthly |
| Thereafter (seventh yr onwards) | Relevant Coverage Administration Expenses in sixth yr escalating on the fee of 5% p.a. |
- Mortality prices (refunded at maturity as per plan circumstances). The speed of mortality cost each year per Rs. 1000/- Sum at Danger for a number of the ages in
respect of a wholesome life are as below:
| Age (years) | Mortality Cost (`) |
|---|---|
| 25 | 1.17 |
| 35 | 1.50 |
| 45 | 3.22 |
| 50 | 5.55 |
| 60 | 13.95 |
- Expenses for switches, partial withdrawals, and alteration requests past free limits.
Do you have to put money into LIC Safety Plus ULIP plan?
I strongly consider insurance coverage and investments ought to by no means be combined. For pure life cowl, time period insurance coverage is unbeatable. For long-term development, mutual funds work greatest.
Mutual funds outperform ULIPs for pure funding targets as a result of decrease prices, larger liquidity, and higher long-term returns, although ULIPs present bundled life insurance coverage.
Hold these factors in thoughts earlier than deciding to put money into LIC Safety Plus (or not).
- As mentioned above, ULIPs supply insurance coverage and funding returns. So, clearly there are prices concerned for providing each these options. A portion of the premium that you simply put money into an ULIP scheme goes in the direction of offering life cowl whereas the remaining will get invested in a Fund chosen by you, after adjusting for the above talked about prices.
- The best way efficiency returns are calculated in mutual funds is extra clear than in ULIPs. The returns information given in ULIP product brochures will be web off FMCs however unique of Mortality prices, Premium allocation prices and different prices (if any). To reach at precise returns in your ULIP, you could deduct all forms of prices after which arrive at correct returns.
- In case, your ULIP fund doesn’t meet your return expectation (under-performs), you don’t have a lot alternative than to modify to another fund throughout the identical ULIP. Although switches among the many numerous funds inside an ULIP are tax free (doesn’t appeal to capital achieve), you have got restricted alternative and will not meet your unique funding goal/technique.
- Should you plan to make extra funding in ULIPs (Prime-ups), mortality prices are relevant on these Prime-ups as nicely, moreover different ULIP prices.
- Kindly notice that the minimal holding interval of top-up premiums is 5 years. Prime-up premiums should not allowed over the last 5 years of the coverage time period. These sort of restrictions should not relevant in case of Mutual Fund investments. Every Prime-up premium as soon as paid can’t be withdrawn from the Prime-up fund for a interval of 5 years from the date of receipt of the Prime-up premium, besides in case of full give up of the coverage.
- There isn’t a doubt that the fee construction of ULIPs may be very aggressive now and so they have been bettering drastically, however I nonetheless want mutual funds for long-term wealth accumulation. Let’s not neglect the truth that a mutual fund home’s core competency is funding and the first operate of an Insurance coverage firm is managing danger. So, as an Investor, could also be you might be higher off with Mutual Funds for Investments, on any given day.
Earlier than selecting any monetary product, consider its prices, potential returns, and alignment together with your targets. Do you agree? Share your ideas. Cheers!
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(Submit first revealed on : 105-Dec-2025) (Please notice that this text relies on the restricted obtainable info and shall be edited/up to date, if required)
This put up is for info functions solely. We aren’t biased in the direction of any insurance coverage firm or Fundhouse. Mutual funds are topic to market dangers.
