Life Insurance Corporation (LIC) of India has recently launched LIC Dhan Vriddhi Plan (869), which is a guaranteed plan designed to provide financial security and assured returns to policyholders. LIC Dhan Vriddhi Plan (869) is a non-linked, non-participating, single premium, closed-ended endowment plan. In this article, we will review the key features, benefits, and application process, and analyze the pros and cons of the LIC Dhan Vriddhi Plan (869).
Key Features of LIC Dhan Vriddhi Plan (869)
Guaranteed Returns: LIC Dhan Vriddhi Plan (869) assures policyholders of guaranteed returns on their investments. The plan provides a fixed rate of return, ensuring steady growth over the policy term.
Premium Payment Options: LIC Dhan Vriddhi is a single premium policy.
Options: Here, you have two options to choose from regarding the sum assured. Option-1 is 1.25 times of the single premium and Option-2 is 10 times the single premium. You have no option to change these options during the policy period. In simple, if the policyholder dies within the term of the Policy Death Benefit paid to the Nominee i.e.
- Option 1 = 1.25 times of Basic Sum Assured + Accrued Guaranteed Bonus
- Option 2 = 10 times of Basic Sum Assured + Accrued Guaranteed Bonus
Term of Policy: The term of the policy is – 10, 15, or 18 years.
Eligibility
- The minimum entry age is 8 years for a 10-year policy term; 3 years for a 15-year policy term; and 90 days for an 18-year policy term.
- The maximum maturity age is 60 years for Option 1, 32 years for Option 2 (18 years policy), 35 years for Option 2 (15 years policy and 40 years for Option 2 (10 years).
- The minimum basic sum assured is Rs.1.25 lakh for the policy and there is no upper limit on the maximum sum assured.
Death Benefit: LIC Dhan Vriddhi Plan (869) provides a death benefit to the nominee in case of the policyholder’s unfortunate demise during the policy term. The death benefit ensures financial security for the policyholder’s family. Sum assured on death along with accrued Guaranteed Additions would be payable.
“Sum Assured on Death” for both options are defined as under:
Option 1: 1.25 times Tabular Premium for the chosen Basic Sum Assured
Option 2: 10 times of Tabular Premium for the chosen Basic Sum Assured
Maturity Benefit: On maturity of the policy, policyholders receive the maturity benefit, which includes the sum assured along with accrued bonuses, if any. The Policyholder/Life Assured shall have the option to receive the Maturity Benefit in lumpsum as specified above and/or in installments. The installments shall be paid in advance at yearly or half-yearly or quarterly or monthly intervals.
LIC Dhan Vriddhi Plan (869) offers several benefits to policyholders:
1. Guaranteed Returns: The plan guarantees a fixed rate of return, providing policyholders with financial stability and security.
2. Financial Protection: The death benefit ensures that the policyholder’s family is financially protected in the event of their untimely demise.
3. Tax Benefits: Policyholders can avail of tax benefits on the premiums paid under Section 80C of the Income Tax Act, 1961. Additionally, the maturity proceeds are tax-exempt under Section 10(10D) of the Income Tax Act, subject to certain conditions.
4. Loan Facility: LIC Dhan Vriddhi Plan (869) offers a loan facility, allowing policyholders to avail of loan against the policy in times of need.
How to Apply for LIC Dhan Vriddhi Plan (869)
Applying for LIC Dhan Vriddhi Plan (869) is a straightforward process. Here are the steps to follow:
1. Visit the official LIC website or contact your nearest LIC branch to obtain the necessary forms and information.
2. Fill in the application form with accurate personal and financial details.
3. Submit the required documents, including age proof, identity proof, address proof, and income proof.
4. Choose the premium payment mode (single or regular) and select the desired policy term.
5. Pay the premium amount as per the chosen payment mode.
6. After verification of the application and documents, LIC will issue the policy document.
LIC Dhan Vriddhi Plan (869) Review and Analysis
LIC Dhan Vriddhi Plan (869) is a reliable investment option with guaranteed returns. The plan offers financial security and growth potential to individuals looking for a long-term savings avenue. It provides the assurance of a fixed rate of return, which can be beneficial for risk-averse investors.
However, it is essential to consider a few factors before investing in LIC Dhan Vriddhi Plan (869). The plan’s returns may be lower compared to other investment options in the market. Additionally, policyholders should carefully assess their financial goals and risk appetite before making an investment decision.
Pros and Cons of LIC Dhan Vriddhi Plan (869)
Pros
- Guaranteed returns provide stability and security.
- Flexible policy term options to suit individual requirements.
- Tax benefits on premiums paid and maturity proceeds.
- Availability of loan facility in times of need.
Cons
- Relatively lower returns compared to market-linked investment options.
- Limited scope for wealth accumulation due to fixed rate of return.
- Premium payment frequency cannot be changed once the policy is purchased.
FAQs about LIC Dhan Vriddhi Plan (869)
1. Q: What is the minimum and maximum entry age for LIC Dhan Vriddhi Plan (869)?
A: The minimum entry age is 8 years, and the maximum entry age is 50 years.
2. Q: Can I surrender my LIC Dhan Vriddhi Plan (869) before maturity?
A: Yes, policyholders have the option to surrender the policy before maturity. However, surrendering the policy may result in a loss of benefits and a lower payout.
3. Q: Can I avail of a loan against LIC Dhan Vriddhi Plan (869)?
A: Yes, policyholders can avail of a loan against LIC Dhan Vriddhi Plan (869) after completion of a specific period, subject to certain terms and conditions.
4. Q: Are the maturity proceeds taxable?
A: No, the maturity proceeds of LIC Dhan Vriddhi Plan (869) are tax-exempt under Section 10(10D) of the Income Tax Act, subject to certain conditions.
5. Q: Can I change the premium payment frequency after purchasing the policy?
A: No, the premium payment frequency cannot be changed once the policy is purchased. It is important to choose the payment frequency that suits your financial capabilities and preferences.
Conclusion
LIC Dhan Vriddhi Plan (869) offers individuals a reliable and secure investment option with guaranteed returns. The plan provides financial protection, tax benefits, and flexibility in terms of policy terms and premium payment options.
However, the return offered by this plan would be in the range of 4% to 6%. It is very less compared to other investment options. If you are satisfied with lower returns you can purchase this plan. Please note that it is crucial to carefully assess individual financial goals and requirements before investing. Consulting with a financial advisor can help make an informed decision based on your specific needs and risk appetite.
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