LIC launches unit linked pension plan
New Delhi, July 5 (UNI) For those who fear to invest in the shaky stock market but want their money to grow, the Life Insurance Corporation of India has launched a unit linked pension plan which combines investment and pension benefit with an option of insurance cover.
The pension plan--Market Plus-- launched here today offers four funds to choose from - Bond Fund, Secured Fund, Balance Fund and Growth Fund. The market exposure is 15-35 per cent in secured fund, 30-50 per cent in balance fund and upto 80 per cent in growth fund.
With the market fluctuating wildly even for the mildest reasons, the proposer has been given the chance to surrender his policy or switch over from Growth Fund to Bond Fund, where the market exposure is nil, to get higher benefits from the plan.
''Market Plus will allow an individual to exit or surrender his pension policy before the completion of three years, with an opportunity to choose the date of doing so. However, the money will be payable only after three years,'' LIC Senior Divisional Manager Rakesh Kumar said.
The policy would offer four switch overs from one fund to other during a year and that too free of charge, Mr Kumar added.
The plan would be available to individuals aged between 18 and 70 years. The minimum premium charged would be Rs 5,000 under regular modes and Rs 10,000 under single premium.
There is no upper age limit as maximum premium is dependent upon the financial standing of the proposer.
The minimum period after which the pension would start is five years from the Date of Commencement (DOC) of policy or 40 years of age of proposer, whichever was later.
The premium paid by the policy holder after deduction of administrative charges, fund management charges, risk premium and premium for accident benefit, will be invested in the fund type chosen.
The initial NAV will be Rs 10 for a period of one month from the date of launch.
There is no 'bid offer' spread which means the sale and purchase price of the units will be the same as the NAV declared on day to day basis.
The plan offers the option of commutation of one third pension with a choice of risk cover equal to single premium or up to 20 times of annualised premium in case of yearly, half yearly and quarterly modes.
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