Fund Guru: INSURANCE DECODER: LIC Wealth Plus

		Wealth Plus

Starting with new series on Insurance, lets have a look on LICs “Wealth Plus” a Nav Guarantee ULIP with term of 8 years plus GUARANTEE :Plan guarantees the highest NAV reached in the first 7 years of its term or the 8 th year NAV, by completing 8 yrs (the policy term), and guarantee charges is 0.35% of the fund value.

EXITS AND STOPPERS: After the 3rd yr, 2 partial withdrawal within a year can be made as no loan facility is available in this plan. The Minimum amount of withdrawal is Rs.2000 plus minimum of one annual premium left in the fund, You can surrender the policy even within 3yrs without any charges, however the amount will be paid only after three years from date of the policy.
ASSET ALLOCATION OF FUND
Initially fund invested in money market, not much details on the fund. disclosed by LIC.
REVIVAL : In condition of lapasation revival of 2 years is made available from date of lapse and Rs. 500 is charged for revival.

CHARGES:
Administration Charges
Year 1	Rs. 60/- per month
Year 2	Rs. 25/- per month
Year 3+	Rs. 25 at the inflating rate of 3% every year
Premium Allocation Charges
	Single Premium		Regular Premium
	<= 4 Lakhs	>4 lakhs	<=2 lakhs	> 2 lakhs & <= 4 lakhs	> 4 lakhs & <= 7 lakhs	above 7 lakhs
Year 1	5%	4.5%	12%	11.75%	11.5%	11.25%
Year 2	-		2.5%	2.5%	2.5%	2.5%
Year 3	-		2.5%	2.5%	2.5%	2.5%
Surrender Charges
	NIL
Fund Management Charges
	1%
Morality Charges (per '000 Sum Assured )
Age	25		35	45	55
Rs	1.65		2.75	6.85	17.25
Guarantee charges
	0.35%
CONCLUSION It seems like a fashion now a days for Insurance companies to put guarantee tag on ULIP otherwise most investments of 5 to 7 year outweigh negative returns. Plan looks cheaper at upfront side like allocation side, guarantee charges. LICs strategy of fund handling under Wealth Plus might not work with the market, particularly if most of its investments remain in debt securities, that ultimate bring lower returns. unqualified style of fund management, mortality charges are high (running through out the policy term) in compared to similar plans available in the market like SBI Life Smart ULIP II, Bajaj Allianz Shield Plus, Birla Sun Life Insurance Platinum Plus or TATA Assure Apex.

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