Insurance
LIC Samridhi Plus offers highest NAV—a new plan based on an old idea

Last February, it was LIC Wealth Plus which offered a highest NAV plan. Highest NAV plans give average returns, but LIC uses the same old concept with its new Samridhi Plus to attract the conservative investor

LIC has launched Samridhi Plus - a highest net asset value (NAV) ULIP. January, February and March are critical months for life insurance companies, when they come out with many more new products to lure customers. Highest NAV will be recorded on a daily basis in the first 100 months of the policy, which has a term of 10 years. The guarantee will be applicable only for units available in the policyholder's fund at the end of the policy term. In February last year, LIC launched Wealth Plus, a highest NAV ULIP that made great new business premium collection.

The highest NAV plan is not for those interested in an exposure to equities. At a recent seminar, Dr P Nandagopal, managing director and chief executive officer, IndiaFirst Life Insurance, dubbed the highest NAV ULIPs as having 'suboptimal performance'. Moneylife explained the highest NAV concept in a cover story, "What is the right life insurance" (22 April 2010) and why these policies are not the best options. (What is the Right Life Insurance?)

The most important point to understand is that insurance companies are guaranteeing NAVs and not returns! Are the two different? Yes. The NAV is a number at a point in time, whereas returns happen over a period of time. For instance, your 10-year plan may have hit an NAV of Rs14 after five years. At that point, it is the highest NAV. This Rs14 is guaranteed for the next five years. What if the NAV remains at Rs14 for the next four years, or goes down to Rs13? You would still get this NAV of Rs14. But Rs14 happens to be just 4% over 10 years! Not worth the investment. In the case of LIC Wealth Plus, the highest NAV recorded was Rs11.05 in over a year. But the actual returns would be less after adjustment of units for different charges.

The minimum premium for LIC Samridhi Plus ranges from Rs1,500 (monthly-ECS) to Rs30,000 for single premium. Consistent with other highest NAV plans, the insurer reserves the right to have investments in different instruments (debt, equity) in proportion of 0% to 100%.

The premium allocation charge (PAC) for a single premium policy is 3.3%. The regular premium policy has a first year PAC of 6% and from the second through the fifth year the PAC is 4.5%. The policy administration charge will be Rs30 per month in the first year and Rs30 per month escalating at 3% per annum thereafter, throughout the rest of the term of the policy.

There is a fund management charge of 0.90% per annum of the fund value and a guarantee charge of 0.40% per annum of the fund value. The mortality charges vary with the age and given in the LIC tables. The overall charges are in line with the average charges for other new ULIPs.

In the case of death of the policyholder during the term of the policy, when the cover is in full force, the nominee shall get higher of the sum assured under the basic plan and the policyholder's fund value.

The sum assured under the five years premium-paying term policies for age (at entry) below 45 years ranges from 10 times the annualised premium to 20 times the annualised premium. In case of single-premium policies, for age (at entry) below 45 years, the minimum sum assured is 1.25 times the single premium, while it is 1.10 times the single premium. The maximum sum assured under single-premium policies is five times the single premium if the age at entry is up to 55 years and 1.25 times the single premium, for age (at entry) from 56 to 65 years.

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COMMENTS

satish sain

4 years ago

Pl confirm samridhi plus current nav

RANJAN KUMAR

5 years ago

CAN I TAKE THIS POLICY IN JUNE 2011? WITH 50000 INVESTMENT.

REPLY

manja

In Reply to RANJAN KUMAR 5 years ago

donot invest in any LIC plans except if you are going for true insurance policy. they have lot of hidden costs in plans like money plus and wealth plus and LIC agent will never open their mouth about this till the opening of the policy. you will get to know about this only when you check out the number of units allotted. i had invested in wealthplus and in 1st year i paid 50000, but allotment was given only for 70% of the money balance was adjusted as different LIC charges and i am sure that after 8 years i will not even get 5% interest on my investment.

Tapas Mana

5 years ago

how can i now that the co give us the highest nav of last 10 years in samridhi plus plan

REPLY

chitta Roy

In Reply to Tapas Mana 4 years ago

I have never seen the unit price of samridhi plus which I have taken during last Feb 2010 . How to see it and how to get the highest NAV of lst 10 years

naresh sharma

5 years ago

i want to invest 50000 rs one time in samradhi plus so how much i will give after 5/10 years

sanat kumar Halder

5 years ago

If i paid single premium Rs.30000.00, then how much can i get after 10 yrs.

REPLY

prasanta biswas

In Reply to sanat kumar Halder 5 years ago

If i paid single premium Rs.100000.00, then how much can i get after 10 yrs.

SUNIL SIYA

5 years ago

If I paid single premium Rs.30000.00,then how much I will give after 5yr/10yr.

Naina

5 years ago

This is run of the mill article.Much more is expected from this site["Moneylife has going beyond what insurance companies want you to know and mainline publications want you to read"].What is the performance of Wealth plus since inception?.How are these categories of plans like Platinum plus of Birla and Smart ULIP performed till now since inception vis-a vis their benchmark?.We don't want brochure of plans on this site but HONEST ANALYSIS.

REPLY

Naina

In Reply to radha kothari 5 years ago

Radha Ji While I appreciate your sentiments.My point is different.Like movie review I would like all aspects to be covered.Sucheta Dalal is one of the best Journalist who is respected and reputed for her free,frank and fearless reporting.I also hold her high esteem.My only contention is while reviewing particular plan I expect MORE from her team.

radha kothari

In Reply to Naina 5 years ago

Well, maybe Naina should get into a paid subscription mode with Moneylife. I as a reader am happy at the information as well as analysis.
I really appreciate the fact that you have the courage to speak out against insurance, when necessary without worrying about doing shady advertising deals with companies.
And best of all, I love the fact that I get this free. Thank you moneylife!! Lets learn to appreciate the good things we get FREE rather than dictate what we WANT and EXPECT!!

Sekhar A G

5 years ago

Sir,

I am 57 years old and i need life insurence for my life. Pl send the suitble LIFE insurence policy for my age.

naresh sharma

5 years ago

i want to saved money but with profit and then after complite policy ifound safe my life

naresh sharma

5 years ago

new

mkasinaidu

5 years ago

this is not understand

Arpita Bhattacharya

5 years ago

Pls introduce some policy for the common people. Thinking for only rich class and bank money holder will not suffice the purpose. All the policies are for those who earn in different fraud ways. Only the corrupted politicians and third class Marwari Businees Man can invest in LIC those who have got only black money .

Dilip C rathod

5 years ago

I want security for my money . the concept of NAV is only for customer who save the TAX no benefit about normal costumer. the most important question who declare NAV ?

Jaydip Malaviya

5 years ago

This Plan Same As a Wealth Insurance Plan and

naresh sharma

5 years ago

i intrusted

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