The Hindu Business Line : LIC's unit-linked plan: Bima Plus

Bima Plus is a unit-linked endowment plan. The plan is available over a duration of 10 years. Premium can be paid either yearly, half-yearly, or at one shot.

The premium is used to purchase units in a fund of one's choice, after the necessary deductions.

The value of the units varies with the investment performance of the assets in the fund.

Investments can be made in one of three types of funds: Secured fund, which invests predominantly in debt and money market instruments; Risk fund, in which the tilt is towards equities; and a Balanced Fund, a blend of the two.

Switching between funds is allowed twice during the policy term, subject to the condition that they are at least two years apart. Charges for switching are 2 per cent of the fund's cash value.

Death benefit

What the beneficiary receives depends on when the death of the policyholder occurs.

If death occurs within the first six months of the policy, the payout is 30 per cent of the sum assured plus the cash value of the units.

Between months seven and 12 of the policy, the payout is 60 per cent of the sum assured plus cash value of units.

After first year, the sum assured and cash value of the units is paid.

During the 10th year, 105 per cent of the sum assured and cash value of units is paid out.

If death occurs due to an accident, a sum equal to the sum assured, over and above the benefit mentioned above is paid.

On survival up to maturity, the policyholder will receive 5 per cent of the sum assured plus the cash value of the units.

Charges

As is the case with unit-linked plans, this plan, too, comes with a set of charges. This includes a level annual mortality charge, the quantum of which is a function of the policyholder's entry age; accident benefit charge at Rs 0.50 per thousand sum assured; annual administrative and commission charges; and a fund management charge.

Surrender value

On surrendering the policy, the cash value of the units, subject to certain deductions that depend on the year surrendered, is paid out to the policyholder.

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