LIC’s Protection Plus (Plan 886, UIN 512L361V01) is a non-participating, unit-linked, individual life insurance savings plan (ULIP) that offers life cover throughout the policy term along with investment in market-linked funds. Introduced from 3 December 2025, it is aimed at investors who want to protect their families financially while building long-term wealth through equity and debt-oriented funds. Unlike traditional participating endowment plans, there are no bonuses, but the plan provides flexibility in premium levels, sum assured multiples, top-ups, partial withdrawals and fund switches, with investment risk borne by the policyholder.
Key Features and Structure
Protection Plus is built around flexible premium and policy-term combinations:
| PPT (years) | Allowed policy terms (years) |
|---|---|
| 5 | 10, 15, 20, 25 |
| 7 | 10, 15, 20, 25 |
| 10 | 10, 15, 20, 25 |
| 15 | 15, 20, 25 |
Basic Sum Assured (BSA) is defined as a multiple of Annualised Premium:
- Minimum: 7× premium if entry age is below 50, 5× premium if 50 or above.
- Maximum: up to 40× Annualised Premium, subject to age, PPT and underwriting limits.
The plan allows increase or decrease of BSA after the first policy year, and BSA increases on life events (marriage, birth/legal adoption of a child) are permitted up to age 45, within specified multiples and underwriting conditions.
Refund of mortality charges at maturity is a key differentiator:
- Monthly mortality charges are deducted from the unit fund to provide life cover.
- If the policy remains in force and the life assured survives to maturity without earlier surrender or conversion to a paid-up/discontinued contract, the total mortality charges (excluding extra mortality, rider charges and GST) are added back to the fund value at maturity.
Top-up premiums:
- Minimum ₹1,000 per top-up, allowed any time except during the last 5 policy years, subject to the top-up premium not exceeding the base premium in a year.
- Each top-up creates a Top-up Sum Assured = 1.25× top-up premium, with its own 5-year lock-in.
Partial withdrawals:
- Allowed after 5 policy years, subject to minimum balance rules and percentage caps on fund value.
- Typically up to 15% (years 6-10), 20% (11-15), 25% (16-20), 30% (21-25) of the fund value, with conditions that a minimum fund balance and minimum BSA multiple are maintained.
Investment funds (6 options), with no bid-offer spread:
- Bond Fund – low risk, 0% equity, mainly fixed-income.
- Secured Fund – low to medium risk, capped equity exposure (up to about 55%).
- Balanced Fund – medium risk, balanced debt-equity (30-70% equity band).
- Growth Fund – high risk, equity-heavy (40-80% equity).
- Flexi Growth Fund – very high risk, 40-100% equity, largely NIFTY 100-linked.
- Flexi Smart Growth Fund – very high risk, 40-100% equity, largely NIFTY 50-linked.
Four free switches per policy year are allowed; beyond that, each switch costs ₹100.
Rider option – Linked Accidental Death Benefit Rider (UIN 512A211V02):
- Available to eligible lives; adds an additional Accidental Death Sum Assured, generally up to the Basic Sum Assured and subject to an overall cap (as specified by LIC at the time of purchase), up to age 70 or policy maturity, whichever is earlier.
Eligibility, Premiums and Modes
- Entry age: Minimum 18 years completed; maximum generally 65 years (with constraints for shorter PPTs).
- Maturity age: Minimum 75 years; maximum 90 years depending on term.
- Minimum premium (Base Premium):
| PPT | Yearly | Half-yearly | Quarterly | Monthly (NACH) |
|---|---|---|---|---|
| 5,7,10 | ₹60,000 | ₹30,000 | ₹15,000 | ₹5,000 |
| 15 | ₹36,000 | ₹18,000 | ₹9,000 | ₹3,000 |
There is no explicit upper limit on premium, subject to underwriting and AML norms.
Premium payment modes: Yearly, Half-yearly, Quarterly, Monthly (NACH).
Grace period: 30 days (15 days for monthly), during which life cover continues.
Availability: offline via agents and online via LIC’s website, with lower premium allocation charges for online purchases.
Benefits: Death, Maturity, Liquidity and Riders
Death benefit
If the life assured dies while the policy is in force (including grace period), the nominee receives the highest of:
- Basic Sum Assured, adjusted for any partial withdrawals from the base fund in the two years immediately preceding death.
- Base Premium Fund Value (units purchased from base premiums).
- 105% of total base premiums paid up to the date of death.
If top-up premiums exist, the nominee also receives the higher of Top-up Sum Assured or Top-up Fund Value for the top-up portion. Death benefits may be taken as lump sum or in instalments (settlement option) over up to 5 years, with investment risk during settlement borne by the beneficiary.
Maturity benefit
On survival to the end of the policy term (if the policy is in force and not surrendered/discontinued), the policyholder receives:
- Total Fund Value = Base Premium Fund Value + Top-up Fund Value,
- Plus refund of mortality charges (excluding extra mortality and rider charges, and without refund of any GST).
Partial withdrawals and top-ups provide liquidity and flexibility after lock-in.
Rider benefit: Additional payout on accidental death.
Charges and Risk Considerations
Premium Allocation Charges (PAC): Offline up to 8% year 1, reducing to 3%; online lower (e.g., 3% to 1%). Top-ups: 2.5% offline, 1.5% online.
Fund Management Charge: 1.35% p.a.
Policy Administration Charge: Nil first 5 years; from year 6 ₹85-100/month, escalating 5% p.a.
Mortality charges: Age-based, deducted monthly.
Discontinuance charges: Max ₹6,000 in year 1, nil after year 4.
No policy loans are allowed under this plan.
As a ULIP, investment risk is fully borne by the policyholder; 5-year lock-in applies.
Tax benefits may be available on premiums paid (under Section 80C) and on maturity/death proceeds (under Section 10(10D)), subject to prevailing tax laws and conditions.
Pros and Cons
Advantages: Mortality refund standout; flexible terms/funds; liquidity post-lock-in; lower online charges.
Limitations: Charges drag early returns; market volatility; better separate term for pure cover; lock-in reduces short-term access; no loans.
Who May Consider LIC Protection Plus?
Best for 25-50 year-olds with 10-25 year horizons, comfortable with risk, needing integrated protection + growth alongside separate term cover. (Word count: 812)
