LIC Samridhi Plus - Good or Bad?

I am hearing everywhere about the LIC Samridhi Plus - hoardings, banners, insurance agent call, advertisements, ad’s etc…so decided to explore my readers with a brief information about this plan

LIC Samridhi Plus.:- This plan offers payment of Fund Value at the end of policy term, based on highest Net Asset Value (NAV) over the first 100 months of the policy, or the NAV as applicable on the date of maturity, whichever is higher. NAV of the fund will be subject to a minimum of ` 10/-. This plan is available for sale for a maximum period of 3 months from the date of launch.

Sounds interesting? Savings, Guaranteed NAV, Just for 5 years premium paying, LIC trust, Safety of capital, Tax Benefit, Highest NAV, High return, Low Risk..etc.. all these will force you to sign the application form immediately without thinking about the cost it incurs and whether the product is suitable for your needs or goals for which you are planning to save..Read below and then decide

Firstly understand what is ULIP Plan: Whenever, you pay premium in ULIP, certain amount of money will be deducted before investing in the fund you choose and certain amount will be deducted after investment. So, the money left after all the charges, is guaranteed in this plan. Let's explore all the charges of this plan now.

Following are the charges which will get deduct from the premium you pay:

1)      Premium Allocation charges:

Single Premium: 3.3%

Regular Premium:

Premium	Allocation Charge
First Year	6.00%
2nd to 5th Year	4.50%

2)      Policy Administration charge:  30/- per month during the first policy year i.e. 30 X 12 = Rs. 360 p.a.  and Rs.30/- per month escalating at 3% p.a. i.e. Rs. 30 X 3 % =30.9 p.m. and Rs. 371 p.a. and increasing every year thereafter, throughout the term of the policy shall be levied.

.       For a premium of Rs.15,000 p.a., it comes out to be 2.4% in 1st year.

3)      Fund Management Charge : It is a charge levied as a percentage of the value of assets and shall be appropriated by adjusting the Net Asset Value (NAV) at 0.90% p.a. of Fund Value

4)      Guarantee Charge: A charge of 0.40% p.a. of the Fund Value shall be levied for the cost of investment guarantee. This is a charge levied at the time of computation of NAV, which will be done on daily basis

5)      Mortality Charge: This is the cost of life insurance cover which is age specific and will be taken every month. Ranging from 1.42 - 10.76 per 1000 sum assured

 

6)      Accident Benefit Charge: It is the cost of Accident Benefit rider (if opted for) and will be levied every month at the rate of  0.50 per thousand Accident Benefit Sum Assured per policy year

7)      Discontinuance Charge: If You withdraw the policy before 5 years there are certain charges which will be deducted from your surrender Value

8)      Service Tax : Ofcourse, there will be service tax+cess also on different charges. LIC has also reserved some of the charges mentioned above after the prior approval of LIC.

It's you as an investor has to understand these terms and conditions before putting your hard earned money.

After the brief exploration, I would recommend you to do your own homework, check it out whether this plan will give you the desired fund required for your goal or is the plan fit for your goals for which you are going to invest.

I would welcome any suggestion, views, doubts, or any Goal Funding, Financial Planning required for my readers in comment section below