LIC Index Plus (Plan No. 873): Features & Benefits

What is LIC Index Plus (Plan No. 873)?

LIC Index Plus (Plan No. 873) is a Unit Linked, Non-Participating, Regular Premium Life Insurance Plan that combines life insurance protection with long-term market-linked wealth creation. Unlike traditional LIC policies that may offer bonuses, this plan invests in index-based equity funds linked to the NIFTY 50 and NIFTY 100, allowing policyholders to participate in market performance while enjoying life cover throughout the policy term. The plan is designed for investors with a long-term financial outlook who want the potential for wealth accumulation alongside insurance protection. LIC Index Plus can be purchased online through the LIC website or offline via LIC agents, brokers, corporate agents, and insurance marketing firms, making it accessible through multiple channels.

LIC Index Plus (Plan No. 873) Overview

LIC Index Plus is a flexible ULIP that allows policyholders to choose investment funds based on their financial goals and risk appetite. The plan offers two equity-based investment options—Flexi Growth Fund and Flexi Smart Growth Fund—linked to the NIFTY 50 and NIFTY 100 indices. It also includes attractive features such as guaranteed additions at specified policy years, partial withdrawal facilities to meet liquidity needs, and the option to enhance life protection through the LIC Linked Accident Benefit Rider. These features make LIC Index Plus suitable for individuals seeking a balanced combination of market-linked investment opportunities and financial protection under a single insurance plan.

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• Understand the benefits of LIC Linked Accident Benefit Rider before choosing rider protection.

LIC Index Plus (Plan No. 873) at a Glance

Comparison Table

Policy Features of LIC Index Plus (Plan No. 873)

LIC Index Plus offers several features that make it an attractive market-linked insurance solution for long-term investors. Policyholders can select the investment fund that best matches their risk profile and choose a policy term based on their financial objectives. The plan provides a Basic Sum Assured of either seven or ten times the annualized premium, along with flexible payout options at maturity. Guaranteed additions are credited at specified policy durations, increasing the unit fund value for eligible active policies. The policy also allows partial withdrawals after the applicable lock-in period and offers enhanced protection through the optional LIC Linked Accident Benefit Rider. In addition, eligible policyholders receive a refund of mortality charges on maturity, adding further value to the overall investment experience.

• Market-linked ULIP with life insurance protection.
• Invests in NIFTY 50 and NIFTY 100 index-based funds.
• Choice of Flexi Growth Fund and Flexi Smart Growth Fund.
• Guaranteed Additions at specified policy years.
• Refund of mortality charges on maturity, subject to policy conditions.
• Partial withdrawals after the lock-in period.
• Four free fund switches every policy year.
• Optional LIC Linked Accident Benefit Rider.
• Flexible premium payment modes.
• Settlement option available for beneficiaries.

Perfect For

• Young professionals building long-term wealth.
• First-time ULIP investors.
• Individuals seeking life cover with investment.
• Investors comfortable with equity market fluctuations.
• Parents planning long-term financial goals.
• Salaried individuals investing for future wealth.
• Investors preferring index-based funds.
• People seeking flexible investment options.

Eligibility Criteria

LIC Index Plus is available for a wide range of age groups, making it suitable for both young investors and experienced financial planners. The minimum entry age is 90 days, while the maximum entry age varies according to the selected policy option. The policy term ranges from 10 to 25 years, and the maturity age can extend up to 85 years. Policyholders can pay premiums annually, half-yearly, quarterly, or monthly, providing flexibility in premium payments. The Basic Sum Assured is available at either seven or ten times the annualized premium, allowing applicants to choose the coverage level that aligns with their protection and investment needs.

Death Benefit

The LIC Index Plus Plan provides financial security to the nominee in the unfortunate event of the life assured’s death during the policy term. If death occurs before the commencement of risk, the nominee receives the Unit Fund Value. If death occurs after risk coverage begins, the nominee receives the highest of the Basic Sum Assured (after applicable adjustments), the Unit Fund Value, or 105% of the total premiums paid, subject to policy conditions. Any guaranteed additions applicable under the policy and certain charges deducted after death are also considered while determining the payable amount. The death benefit can be received either as a lump sum or in installments, offering flexibility to beneficiaries during financially challenging times.

Maturity Benefit

LIC Index Plus (Plan No. 873) rewards disciplined, long-term investing by paying the Unit Fund Value on the maturity date, provided the life assured survives the entire policy term. Since the policy is market-linked, the maturity amount depends on the performance of the selected investment fund and the number of units accumulated over the policy duration. The final corpus reflects the value of your investments, making it suitable for individuals planning long-term financial goals such as retirement, children’s education, or wealth creation. Policyholders can estimate their expected maturity value using the LIC Index Plus calculator before purchasing the plan. Additionally, eligible policyholders who have paid all due premiums may also receive a refund of mortality charges, increasing the overall maturity benefit.

Highlights

• Unit Fund Value payable on maturity.
• Returns depend on market performance.
• Suitable for long-term wealth creation.
• Eligible for refund of mortality charges.
• Helps achieve future financial goals.

Guaranteed Additions

One of the standout benefits of LIC Index Plus is the provision of Guaranteed Additions for active policies with all premiums paid on time. These additions are calculated as a percentage of one annualized premium and are credited directly to the Unit Fund at specified policy years. The additional amount is used to purchase more units, helping increase the overall investment value without requiring extra premium payments. The percentage of Guaranteed Additions varies depending on the annualized premium amount and the policy duration. This feature encourages long-term policy continuation while enhancing the potential maturity corpus. Guaranteed Additions are available only for active policies that meet the premium payment requirements specified by LIC.

Guaranteed Additions at a Glance

• Credited at selected policy years.
• Added directly to the Unit Fund.
• Purchase additional investment units.
• Available only for active policies.
• Increase long-term wealth potential.

Additional Benefits

LIC Index Plus offers several additional benefits that improve flexibility, liquidity, and financial protection during the policy term. Policyholders can enhance their insurance cover by choosing the LIC Linked Accident Benefit Rider, subject to eligibility conditions. The plan also allows fund switching, enabling investors to shift between available funds according to changing market conditions or investment preferences. After completing the required lock-in period, policyholders can make partial withdrawals to meet financial emergencies while continuing the policy. Additionally, the Settlement Option allows beneficiaries to receive death claim proceeds in installments over a period of up to five years instead of a lump sum, offering better financial management during difficult times.

Additional Benefits Include

• LIC Linked Accident Benefit Rider.
• Four free fund switches every policy year.
• Partial withdrawals after the lock-in period.
• Flexible settlement option for nominees.
• Greater investment flexibility.

Fund Options

LIC Index Plus offers two professionally managed equity funds, allowing investors to select the option that best matches their investment objectives and risk tolerance. The Flexi Growth Fund primarily invests in companies included in the NSE NIFTY 100 Index, providing broader market diversification. The Flexi Smart Growth Fund focuses mainly on companies listed in the NSE NIFTY 50 Index, offering exposure to India’s leading large-cap companies. Both funds aim to generate long-term capital appreciation, but they carry a Very High Risk profile because their performance depends on stock market movements. Investors should carefully evaluate their investment horizon and risk appetite before selecting a fund.

Available Investment Funds

• Flexi Growth Fund – Invests primarily in NSE NIFTY 100 stocks.
• Flexi Smart Growth Fund – Invests mainly in NSE NIFTY 50 stocks.
• Long-term capital appreciation objective.
• Very High Risk investment profile.
• Suitable for long-term investors.

Fund Performance and NAV

The performance of LIC Index Plus depends on the Net Asset Value (NAV) of the selected investment fund. According to the policy document, both available funds have appreciated from their initial launch NAV of around ₹10 to above ₹12, reflecting long-term growth despite periodic market fluctuations. While short-term returns have experienced temporary declines due to market volatility, both funds recorded positive six-month and one-year returns in the referenced data. The Flexi Smart Growth Fund slightly outperformed the Flexi Growth Fund over the measured period. Investors should remember that NAV changes daily based on market performance, and historical returns should not be considered a guarantee of future performance.

NAV Highlights

• Market-linked daily NAV movement.
• Positive long-term growth since launch.
• Short-term volatility is normal.
• Flexi Smart Growth Fund slightly outperformed.
• Past performance doesn’t guarantee future returns.

Policy Charges

Like most Unit Linked Insurance Plans, LIC Index Plus includes several charges necessary for policy administration and fund management. These charges include Premium Allocation Charge, Mortality Charge, Fund Management Charge, Policy Administration Charge, Switching Charge, Partial Withdrawal Charge, Discontinuance Charge, Accident Benefit Charge (if applicable), Tax Charge, and Miscellaneous Charges. These deductions are made according to LIC’s policy terms and directly influence the overall fund value. Prospective buyers should review these charges carefully before investing to understand how they may affect long-term returns.

Charges Under the Policy

• Premium Allocation Charge.
• Mortality Charge.
• Fund Management Charge.
• Policy Administration Charge.
• Fund Switching Charge.
• Partial Withdrawal Charge.
• Discontinuance Charge.
• Tax Charge.
• Miscellaneous Charges.

What is Not Covered?

LIC Index Plus contains specific exclusions that policyholders should understand before purchasing the plan. According to the policy document, death due to suicide within 12 months from the commencement or revival of the policy is not covered under the standard death benefit provisions. In such cases, the nominee receives the applicable Unit Fund Value and certain eligible charge refunds as specified in the policy terms, after which the policy terminates. Understanding these exclusions helps policyholders make informed decisions and ensures complete awareness of the plan’s coverage limitations.

Policy Exclusions

• Suicide within the first 12 months is excluded.
• Unit Fund Value is payable as per policy terms.
• Policy terminates after claim settlement.
• Applicable charges refunded according to policy conditions.

How to Buy LIC Index Plus (Plan No. 873)

Purchasing LIC Index Plus is a straightforward process that can be completed online through the official LIC website or with assistance from authorized LIC agents and intermediaries. Applicants need to provide basic personal details, select the preferred policy option, choose the premium payment frequency, and complete the application process. Once the premium payment is successfully processed and the proposal is accepted, the policy becomes active and life insurance coverage begins according to the policy terms.

Steps to Buy

• Visit the official LIC website.
• Enter your personal and contact details.
• Provide age, city, and income information.
• Select LIC Index Plus (Plan No. 873).
• Choose the premium payment mode.
• Review and confirm policy details.
• Complete the premium payment.
• Receive policy confirmation and coverage activation.

Pros of LIC Index Plus (Plan No. 873)

LIC Index Plus is designed for investors who want the dual advantage of life insurance protection and market-linked wealth creation. Since the plan invests in NIFTY 50 and NIFTY 100 index-based funds, it offers the opportunity to benefit from long-term equity market growth while maintaining life cover throughout the policy term. The availability of Guaranteed Additions, fund switching, partial withdrawals, and an optional accident benefit rider makes the policy more flexible than many traditional life insurance plans. In addition, eligible policyholders receive a refund of mortality charges on maturity, which can enhance the overall value of the policy. These features make LIC Index Plus a suitable choice for disciplined investors seeking long-term financial planning with insurance protection.

Advantages

• Market-linked wealth creation potential.
• Life insurance protection throughout the policy term.
• Guaranteed Additions for eligible active policies.
• Refund of mortality charges on maturity (subject to policy conditions).
• Flexibility to switch investment funds.
• Partial withdrawal facility after the lock-in period.
• Optional LIC Linked Accident Benefit Rider.
• Multiple premium payment modes.
• Choice between two index-based investment funds.

Things to Consider Before Investing

Although LIC Index Plus offers several attractive features, investors should understand that it is a market-linked insurance plan. The value of the investment depends on the performance of the selected fund, and returns are not guaranteed. Both available funds carry a Very High Risk profile because they invest primarily in equity markets. Investors should carefully assess their financial goals, investment horizon, and risk tolerance before selecting the plan. Reviewing policy charges, fund options, lock-in conditions, and withdrawal rules can help ensure the plan aligns with long-term financial objectives.

Important Considerations

• Returns depend on equity market performance.
• NAV fluctuates daily.
• Long-term investment horizon is recommended.
• Both funds carry a Very High Risk profile.
• Review policy charges before investing.
• Understand lock-in and withdrawal conditions.
• Past performance does not guarantee future returns.

Who Should Buy LIC Index Plus?

LIC Index Plus is suitable for individuals who are comfortable with market-linked investments and are looking to build long-term wealth while securing life insurance coverage. It is particularly beneficial for investors who want exposure to index-based equity funds without directly managing stock investments. The plan also suits parents planning for future financial milestones, professionals building retirement savings, and individuals seeking a combination of insurance and investment under a single policy. However, conservative investors who prefer guaranteed returns may find traditional endowment plans more suitable.

Perfect For

• Young professionals starting long-term investing.
• Salaried individuals seeking insurance with investment.
• Parents planning children’s future expenses.
• Investors with a long-term wealth creation goal.
• Individuals comfortable with market fluctuations.
• Policyholders seeking flexible fund options.
• People looking for life cover with investment potential.

Frequently Asked Questions (FAQs)

1. What is LIC Index Plus (Plan No. 873)?

LIC Index Plus is a Unit Linked, Non-Participating, Regular Premium Life Insurance Plan that combines life insurance protection with market-linked investments in NIFTY 50 and NIFTY 100 index-based funds.

2. Which investment funds are available?

The policy offers two investment options:

• Flexi Growth Fund
• Flexi Smart Growth Fund

3. Are partial withdrawals allowed?

Yes. Partial withdrawals are permitted after the required lock-in period, subject to the policy terms and conditions.

4. Does the policy offer Guaranteed Additions?

Yes. Guaranteed Additions are available for eligible active policies at specified policy years based on the annualized premium.

5. Can I switch between funds?

Yes. The policy allows fund switching during the policy term. Four switches are available free each policy year, after which a switching charge applies.

6. What is the policy term?

The available policy term ranges from 10 years to 25 years.

7. Is there an accident benefit rider?

Yes. The LIC Linked Accident Benefit Rider can be chosen subject to the eligibility conditions mentioned in the policy.

8. Can the policy be surrendered?

Yes. The policy can be surrendered at any time. The payout depends on whether the surrender occurs during or after the five-year lock-in period.

Conclusion

LIC Index Plus (Plan No. 873) is a comprehensive market-linked life insurance plan that combines insurance protection with the potential for long-term capital appreciation through NIFTY 50 and NIFTY 100 index-based investments. The policy offers valuable features such as Guaranteed Additions, flexible investment fund choices, partial withdrawals, fund switching, an optional accident benefit rider, and a refund of mortality charges on maturity for eligible policies. While investment returns depend on market performance and both available funds carry a Very High Risk profile, the plan is well suited for investors with a long-term outlook who are comfortable with equity market fluctuations. Before investing, compare this plan with other LIC policies, evaluate your financial goals, and carefully review the policy terms to determine whether LIC Index Plus aligns with your overall investment strategy.