The country’s largest insurer Life Insurance Corporation is aiming to garner Rs 25,000 crore from its recently launched close-ended unit-linked Wealth Plus scheme.
The company has set a target of Rs 25,000 crore to be mobilised from Wealth Plus scheme that safeguards investments from market fluctuations so that they are protected in financially volatile times, an official said.
There has been great demand for guarantees and guaranteed return products. Sensing this need, LIC had launched a close ended plan Jeevan Aastha last year, which collected more than Rs 10,000 crore during a short period, the official said.
This year, too, an assured return plan Jeevan Nischay was brought out in tune with the current market realities only for the existing policyholders of the company, a LIC statement said.
While Jeevan Nischay is available for subscription, there was strong demand for a product (Wealth Plus), which is market linked and yet assures customers of the benefit of highest Net Asset Value (NAV) over a certain period of time, it said.
Wealth Plus guarantees the highest NAV recorded on a daily basis, in the first 7 years of the policy, subject to a minimum of Rs 10, it said.
This means the payment at the end of the policy term will be based on highest NAV recorded over the first 7 years of the policy or the NAV as applicable at the end of the policy term, whichever is higher, the statement said.
The guarantee will be applicable only for payment made at the end of the policy term irrespective of any partial withdrawals made during the policy term.
Wealth Plus comes with a feature of extended life cover for two years after the completion of policy term of eight years, it said.
The premium can be paid either in a single lump sum or for three years regularly at specified intervals. Minimum premium for three years is Rs 20,000 per annum, whereas single premium would be Rs 40,000.
The unit-linked fund is subject to various charges and value of units may increase or decrease depending on the NAV.
Two partial withdrawals are allowed in a policy year subject to certain conditions, it said, adding, the policy can be surrendered only during the policy term. Wealth Plus is available for sale for a limited period.