Index Plus Plan 873
Index Plus Plan 873: LIC of India launched a new plan, LIC’s Index Plus 873 with effect from 6th February 2024. The Unique Identification Number (UIN) for LIC’s Index Plus policy is UIN: 512L354V01. LIC’s Index Plus 873 is a Unit Linked, Regular Premium, Individual Life Insurance Plan which offers life insurance cover cum savings throughout the term of the policy. Guaranteed additions as a percentage of Annualized Premium shall be added to the unit fund on completion of specific duration of policy years under an in-force policy.
Introduction – Why Market-Linked Insurance Plans are Booming in India
India is witnessing a financial shift. From fixed deposits to stock markets, young investors are looking for higher returns and financial security.
- FDs give ~6.5% returns.
- Inflation eats up wealth at ~6-7%.
- Equity markets have delivered 12–15% CAGR over decades.
But many Indians still prefer trustworthy LIC products. Enter LIC Index Plus Plan 873 – a Unit Linked Insurance Plan (ULIP) that blends:
- Life insurance protection
- Index-linked investment growth
- Flexibility to withdraw & switch funds
It’s an ideal choice for working professionals, NRIs, and parents planning for children’s future.
What is LIC Index Plus Plan 873?
LIC Index Plus Plan (Plan No. 873, UIN: 512L351V01) is a ULIP where part of your premium goes towards life insurance cover and the rest is invested in index funds.
👉 The uniqueness of this plan:
- Fund returns are linked to Nifty or Sensex Index Performance.
- Ensures market-linked growth with LIC’s safety net.
- Offers Partial Withdrawal, Settlement Options, and Switching Flexibility.
It’s a goal-based plan – whether retirement, child education, or wealth creation.
Key Features of LIC Index Plus Plan 873
| Feature | Details |
|---|---|
| Plan Type | Unit Linked Insurance Plan (ULIP) |
| Plan Number | 873 |
| Entry Age | 90 days – 60 years |
| Maximum Maturity Age | 85 years |
| Policy Term | 10 – 25 years |
| Premium Payment | Single or Regular |
| Minimum Annual Premium | ₹30,000 (Single) / ₹20,000 (Regular) |
| Maximum Premium | No Limit |
| Sum Assured | 7X annual premium (Regular), 1.25X (Single) |
| Fund Options | Index Fund, Bond Fund, Balanced Fund |
| Partial Withdrawal | Allowed after 5 years |
| Death Benefit | Higher of Fund Value or Sum Assured |
| Maturity Benefit | Fund Value at policy end |
| Loan | Not available |
How LIC Index Plus Works
- Choose premium & policy term – e.g., ₹50,000 yearly for 20 years.
- LIC invests in Index Fund / Balanced / Bond Funds.
- Fund value grows as per market performance.
- On maturity, you receive the entire fund value.
- On death, nominee gets higher of Sum Assured or Fund Value.
Fund Options in LIC Index Plus
| Fund Type | Risk Level | Investment Mix | Ideal For |
|---|---|---|---|
| Bond Fund | Low | Govt. Bonds & Debt | Safe, conservative investors |
| Balanced Fund | Medium | 50% Equity + 50% Debt | Moderate investors |
| Index Fund | High | Equity (Nifty/Sensex) | Aggressive, long-term wealth creators |
👉 Pro Tip: Start with Index Fund in your 20s/30s → switch to Balanced/Bond Fund in 50s for stability.
Illustration – How Your Money Grows in LIC Index Plus
Example 1: Young Investor (Rohan, Age 30)
- Premium: ₹50,000/year
- Policy Term: 20 years
- Fund: Index Fund
| Assumed Return | Maturity Corpus | Death Benefit |
|---|---|---|
| 6% CAGR | ₹18 Lakhs | ₹20 Lakhs |
| 8% CAGR | ₹23 Lakhs | ₹23 Lakhs |
| 10% CAGR | ₹30 Lakhs | ₹30 Lakhs |
Example 2: Mid-Age Investor (Neha, Age 40)
- Premium: ₹1,00,000/year
- Policy Term: 15 years
- Fund: Balanced Fund
| Assumed Return | Maturity Corpus | Death Benefit |
|---|---|---|
| 6% CAGR | ₹24 Lakhs | ₹25 Lakhs |
| 8% CAGR | ₹28 Lakhs | ₹30 Lakhs |
| 10% CAGR | ₹33 Lakhs | ₹35 Lakhs |
Example 3: NRI Investor (Suresh, Age 35)
- Premium: ₹3,00,000/year
- Policy Term: 20 years
- Fund: Index Fund
| Assumed Return | Maturity Corpus | Death Benefit |
|---|---|---|
| 6% CAGR | ₹1.05 Crore | ₹1.2 Crore |
| 8% CAGR | ₹1.45 Crore | ₹1.45 Crore |
| 10% CAGR | ₹2 Crores | ₹2 Crores |
Premium Chart – LIC Index Plus Illustration
| Age | Premium | Term | Fund | Corpus @6% | Corpus @8% | Corpus @10% |
|---|---|---|---|---|---|---|
| 25 | ₹50,000 | 25 yrs | Index | ₹28 Lakhs | ₹35 Lakhs | ₹48 Lakhs |
| 30 | ₹1 Lakh | 20 yrs | Index | ₹36 Lakhs | ₹46 Lakhs | ₹60 Lakhs |
| 40 | ₹1.5 Lakh | 15 yrs | Balanced | ₹36 Lakhs | ₹44 Lakhs | ₹53 Lakhs |
| 50 | ₹2 Lakh | 10 yrs | Bond | ₹28 Lakhs | ₹31 Lakhs | ₹35 Lakhs |
Benefits of LIC Index Plus 873
✅ Wealth Creation
Market-linked growth ensures inflation-beating returns.
✅ Life Cover
Financial security for family in case of death.
✅ Partial Withdrawals
Flexibility after 5 years for emergencies.
✅ Tax Benefits
Premiums under 80C, maturity/death benefit under 10(10D) (conditions apply).
✅ Goal-Based Planning
Perfect for retirement, children’s education, or wealth creation.
Analyst Opinions – Expert Insights
- Financial Analysts: “Index Plus gives LIC loyal customers access to equity growth. A safer ULIP compared to private insurers.”
- Market Experts: “Best suited for investors with a 15–25 year horizon. Short-term buyers may face volatility.”
- Insurance Consultants: “Charges are slightly higher, but LIC brand trust compensates.”
Investor Scenarios
Scenario 1: Young IT Professional
Ravi (28) invests ₹50,000/year for 25 years in Index Fund. Corpus grows to ₹48 Lakhs. Ideal for retirement.
Scenario 2: Parent Saving for Child Education
Meera (35) invests ₹1.5 Lakhs/year for 15 years. At 10% CAGR, she gets ₹53 Lakhs, securing higher education funds.
Scenario 3: NRI Planning India Retirement
Sanjay (40) invests ₹3 Lakhs/year for 20 years. At 10% CAGR, corpus grows to ₹2 Crores. Perfect pension income.
LIC Index Plus vs Other LIC ULIPs
| Feature | LIC Index Plus 873 | LIC Nivesh Plus | LIC SIIP |
|---|---|---|---|
| Fund Basis | Index-linked | ULIP fund mix | Equity ULIP |
| Risk Level | Medium-High | Medium-High | High |
| Flexibility | Partial withdrawal | Partial withdrawal | Partial withdrawal |
| Best For | Long-term wealth + cover | One-time investors | Aggressive investors |
Pros & Cons of LIC Index Plus
✅ Pros
- LIC brand trust
- Index-linked growth
- Flexibility in funds
- Partial withdrawal option
❌ Cons
- Market risk involved
- Higher charges vs NPS/Mutual Funds
- No guaranteed return
Tips to Maximize LIC Index Plus
- Start in your 20s/30s for compounding.
- Use Index Fund for long-term growth.
- Switch to Balanced/Bond near maturity.
- Don’t withdraw early → allow compounding.
- Use with Term Plan (Jeevan Amar) for full protection.
FAQs – LIC Index Plus 873
Q1. Is LIC Index Plus guaranteed?
👉 No, returns depend on market index performance.
Q2. What is the lock-in period?
👉 5 years (as per ULIP rules).
Q3. Can NRIs buy this plan?
👉 Yes, NRIs are eligible.
Q4. Which fund option is best?
👉 Index Fund for long-term, Bond Fund for conservative, Balanced for stability.
Q5. How is maturity taxed?
👉 Generally tax-free under Section 10(10D), subject to conditions.
Q6. Can I switch funds mid-term?
👉 Yes, LIC allows fund switching.
Q7. Is this better than PPF or FD?
👉 Yes, for long-term wealth creation (10–25 years).
Final Verdict – Should You Invest in LIC Index Plus Plan 873?
LIC Index Plus 873 is perfect if:
- You want equity growth + LIC trust.
- You are comfortable with market-linked risks.
- You are planning long-term goals (retirement, child education, wealth).
Avoid if:
- You want guaranteed returns only. (Consider Jeevan Labh, Endowment Plans)
- You have a very short-term horizon.
Smart Strategy:
- Invest in Index Plus for growth.
- Pair with Jeevan Amar (Term Insurance).
- Diversify with NPS/PPF for retirement.
