Launched on December 3, 2025, by Life Insurance Corporation of India (LIC), LIC Protection Plus (Plan No. 886, UIN: 512L361V01) is a cutting-edge Non-Participating, Unit-Linked Insurance Plan (ULIP) that seamlessly blends robust life insurance protection with market-linked savings opportunities. Unlike traditional endowment plans like Jeevan Umang, which offer guaranteed income but conservative returns, Protection Plus empowers policyholders with investment flexibility across six diverse funds, top-up options for accelerated wealth building, and a standout refund of all mortality charges at maturity – a rare perk that can significantly boost your net returns if you commit to the full term. Ideal for investors aged 18-65 seeking higher growth potential (with assumed returns up to 8% p.a. in illustrations), this plan is available pan-India via LIC branches, agents, or online at licindia.in. In this detailed guide, we’ll break down its core elements, with a deep dive into its flexible funds, top-ups, and the game-changing mortality refund, while incorporating LIC Protection Plus calculator insights for realistic expectations.
What is LIC Protection Plus Plan 886? An Overview
LIC Protection Plus is an individual, savings-oriented ULIP where your premiums are invested in equity/debt funds of your choice, bearing market risk for potentially superior returns compared to non-linked plans. Key highlights include:
- Policy Terms: 10, 15, 20, or 25 years.
- Premium Paying Terms (PPT): Flexible limited pay options – 5, 7, 10, or 15 years (e.g., pay for 5 years on a 25-year term).
- Minimum Premiums (Annualized): Start at â‚ą36,000-â‚ą60,000 depending on PPT/mode (yearly, half-yearly, quarterly, monthly via NACH).
- Sum Assured: Min 7x annualized premium (<50 years age) or 5x (≥50 years); max varies by age/PPT/underwriting.
- Lock-in: 5 years – no withdrawals/surrenders before.
- Tax Benefits: Premiums deductible u/s 80C; maturity/death benefits tax-free u/s 10(10D), subject to conditions, prevailing tax laws, and special rules for high-premium ULIPs (e.g., premiums exceeding â‚ą5 lakhs may be taxed as per applicable slabs – consult a tax advisor).
This plan suits goal-based investing, like retirement or child’s education, offering liquidity post-lock-in and adjustments for life events (e.g., marriage, childbirth). With LIC Protection Plus NAV risk and fund performance tied to market dynamics, it’s designed for 2026 investors balancing protection and growth.
Eligibility Criteria: Who Can Buy This Plan?
Accessible yet structured:
- Entry Age: Min 18 years (completed); Max 50 years (PPT 5), up to 65 years (PPT 7/10/15).
- Maturity Age: Max 75-90 years based on term.
- No Upper Premium Limit: Subject to underwriting.
- Risk Profile: All standard/non-smoker lives; investment risk on policyholder.
For a 35-year-old, a 20-year term with 15-year PPT and â‚ą40,000 annual premium yields ~â‚ą7.8-13.2 lakhs maturity (4-8% assumed returns, incl. mortality refund).
Death and Maturity Benefits: Comprehensive Protection and Growth
This ULIP has a fixed Basic Sum Assured linked to multiples of annualized premium.
Death Benefit (if policy in-force): Highest of Basic Sum Assured (less recent withdrawals), Fund Value, or 105% total premiums paid – separately for base and top-ups. Payable lump sum or installments (up to 5 years via Settlement Option). Plus rider if opted.
- Base Premium Death Benefit: Highest of:
- Basic Sum Assured reduced by partial withdrawals (if any) in the two years preceding death.
- Base Premium Fund Value.
- 105% of total base premiums paid.
- Top-up Death Benefit (if applicable): Highest of:
- Total Top-up Sum Assured (1.25x each top-up premium).
- Top-up Premium Fund Value.
- 105% of total top-up premiums paid.
Maturity Benefit: Full Unit Fund Value (Base + Top-up Funds) + Refund of all Mortality Charges deducted (excl. extras/taxes) – paid only if surviving to end, not on surrender.
This dual payout ensures family security while rewarding long-term commitment.
Flexible Funds, Top-Ups, and Unique Refund of Mortality Charges
This section spotlights what makes Protection Plus a standout ULIP.
Investment Fund Options: Tailor to Your Risk Appetite
Allocate premiums to one of six funds (switch 4x free/year; â‚ą100 thereafter):
- Bond Fund (Low Risk): ≥60% govt/corporate debt.
- Secured Fund (Lower-Medium): 45-85% debt, 15-55% equity.
- Balanced Fund (Medium): 30-70% each debt/equity.
- Growth Fund (High): 20-60% debt, 40-80% equity.
- Flexi Growth Fund (Very High): Up to 100% NSE Nifty 100 equity.
- Flexi Smart Growth Fund (Very High): NSE Nifty 50 focus.
NAV daily; Fund Management Charge (FMC): 1.35% p.a. (0.50% Discontinued Fund). Choose conservative for stability or aggressive for growth, keeping in mind LIC Protection Plus NAV risk and fund performance.
Top-Up Premiums: Supercharge Your Savings
- Pay extras anytime (except last 5 years/discontinuance).
- Min â‚ą1,000 (multiples of â‚ą1,000).
- Gets 1.25x Top-up Sum Assured.
- 5-year lock-in per top-up; same fund as base.
- Allocation Charge: 1.5-2.5% (online/offline).
Perfect for lump sums like bonuses – boosts fund value without new policy.
Unique Refund of Mortality Charges: The Real Game-Changer
Mortality Charges (cost of life cover) are age-based (e.g., â‚ą1.17/â‚ą1,000 Sum at Risk at age 25; up to â‚ą13.95 at 60), deducted monthly via unit cancellation.
Standout Feature: 100% refunded at maturity alongside Fund Value – if you survive the term and don’t surrender. Excludes underwriting extras/taxes.
- Why Unique? Rare in ULIPs; offsets insurance cost, enhancing IRR (e.g., sample: adds ~â‚ą50k-1L+ to maturity).
- Vs. Others: Traditional ULIPs deduct permanently; non-linked like Jeevan Umang have no such but guaranteed bonuses.
- Catch: No refund on early exit; incentivizes discipline.
Partial Withdrawals (post-5 years): From top-ups first; limits 15-30% fund value; reduces Sum Assured temporarily.
Premium Payment Flexibility: PPT Options, Top-Ups, and Partial Withdrawals
- Modes: Yearly to monthly; grace 15-30 days.
- Adjust Sum Assured: Increase/decrease on life events (â‚ą100 fee; max age 45 for hikes).
- Freebies: 4 switches/year; no policy admin charge first 5 years.
Riders and Additional Covers: Layered Protection
- LIC Linked Accidental Death Benefit Rider (512A211V02): Up to Basic Sum Assured; â‚ą0.40/â‚ą1,000 p.a. charge (doubled for police); till age 70/maturity.
Other Policy Conditions: Loans, Suicide, Revival, and Discontinuance
- Policy Loans: No loan facility available under this ULIP.
- Suicide Clause: If death due to suicide within 12 months from commencement or revival, nominee receives Unit Fund Value on date of intimation (along with death certificate); no other claims; policy terminates.
- Revival: Within the revival period (up to 3 years from first unpaid premium), you can revive by paying due premiums; the Discontinued Policy Fund is then switched back to active funds after deducting pending charges, subject to underwriting and LIC rules.
- Discontinuance:
- During Lock-in (5 years): Base Fund Value (after charge) to Discontinued Policy Fund (min 4% p.a. guaranteed); no risk cover. Options: Revive within 3 years or pay out at lock-in end.
- After Lock-in: If you discontinue or surrender, you generally receive full Unit Fund Value without discontinuance charges and the policy terminates.
Charges and Returns: Transparent and Capped
| Charge Type | Details |
|---|---|
| Premium Allocation | Offline: 8% Yr1, 5.5% Yrs2-5, 3% after. Online: Lower (3%,2%,1%). Top-up: 1.5-2.5%. |
| Mortality | Age/Sum at Risk-based; refunded at maturity. |
| Policy Admin | Nil first 5 yrs; â‚ą85-100/month from Yr6 (+5% p.a.). |
| Switch/Withdrawal | â‚ą100 each after frees. |
| Discontinuance | Graded (e.g., 6-20% Yr1-5; to Discontinued Fund @4% guaranteed). |
Illustrative Returns (Age 35, â‚ą40k annual, 20-yr term, Bond Fund): Maturity ~â‚ą7.8L (4%) to â‚ą13.2L (8%) incl. refund. XIRR ~6% net.
Who Should Consider LIC Protection Plus, Who Shouldn’t?
Suitable For:
- Investors aged 25–50 with a 10–25 year horizon, already holding separate term cover, comfortable with equity/debt mix, and seeking a mortality-refund ULIP from LIC.
- Those prioritizing flexibility in funds and top-ups for long-term goals like retirement, with tolerance for market-linked returns.
Not Suitable For:
- Individuals with very short horizons (<10 years), needing guaranteed returns without risk, or whose priority is maximum pure cover at minimum cost – consider LIC term plans like Bima Kavach (Plan 887) for affordable high protection without maturity benefits.
Numeric Illustrations (Illustrative only, based on LIC examples; actual returns depend on fund performance – use LIC Protection Plus calculator for personalized quotes):
| Scenario | Age | Term/PPT | Annual Premium | Assumed Return | Maturity Benefit (incl. Mortality Refund) | Net Yield @8% |
|---|---|---|---|---|---|---|
| Example 1 | 35 | 20/15 years | â‚ą40,000 | 4% | â‚ą7,81,306 | – |
| 8% | â‚ą13,20,333 | 6.04% | ||||
| Example 2 (Hypothetical, similar to above for younger age) | 30 | 25/10 years | â‚ą50,000 | 4% | ~â‚ą9,50,000 (estimated) | – |
| 8% | ~â‚ą18,00,000 (estimated) | ~6.5% |
These are projections assuming standard lives and no top-ups/withdrawals; past performance not indicative of future.
Pros and Cons: Is LIC Protection Plus Right for You?
Pros:
- Mortality refund boosts long-haul returns.
- Flexible funds/top-ups for dynamic investing.
- Strong death cover + liquidity post-5 years.
- LIC’s trusted brand.
Cons:
- Market risk (no guarantees except Discontinued Fund).
- 5-year lock-in; charges erode early returns.
- Better for 10+ yr horizon; not for short-term.
Vs. Jeevan Umang: Umang offers guaranteed 8% annual income post-PPT till 100, zero market risk – but lower IRR (5-6%). Protection Plus for growth seekers.
Why LIC Protection Plus Stands Out Among Other ULIPs in 2026
In a crowded ULIP space, it shines with mortality refund (uncommon), index-tracking flexi funds, and life-event adjustments. Projected 6-7%+ IRR post-charges/refund beats many peers. Compared to other LIC ULIPs like New Endowment Plus (participating with bonuses) or Index Plus (index-linked without mortality refund), Protection Plus offers newer flexi-fund options and top-up flexibility. For pure protection with level or increasing sum assured options, opt for LIC Bima Kavach (Plan 887) – a term plan with no maturity, but cheaper cover starting at â‚ą2 crores. Perfect for 30-50s balancing protection/growth in ULIP vs traditional LIC plan for 2026 investors. Use LIC’s calculator for quotes – consult an advisor!
Risk Warning: ULIP is subject to market risk; NAV may go up or down based on fund performance. Past performance is not indicative of future returns, and all benefits depend on market-linked fund performance and applicable charges. The investment risk in the investment portfolio is borne by the policyholder, while insurance is the primary benefit.
LIC Protection Plus FAQs
Is LIC Protection Plus better than traditional LIC plans like Jeevan Umang for long-term savings?
It depends on risk appetite: Protection Plus offers market-linked potential with mortality refund, ideal for growth; Jeevan Umang provides guaranteed income and bonuses for stability – ULIP vs traditional LIC plan for 2026 investors favors Protection Plus for equity exposure.
Can I change funds later in LIC Protection Plus Plan 886?
Yes, up to 4 free switches per year; additional at â‚ą100 each, helping manage LIC Protection Plus NAV risk and fund performance.
What happens if I stop paying premium in the first 5 years?
The policy discontinues: Base Fund Value (after charge) moves to Discontinued Policy Fund (min 4% p.a.); no risk cover. Revive within 3 years or get payout at lock-in end.
Is the refund of mortality charges guaranteed?
Yes, payable at maturity if all premiums are paid and the policy is in force till end – not on surrender or discontinuance.
LIC Protection Plus premium chart (illustrative)?
See numeric table above; for exacts, use LIC Protection Plus calculator on official site.
Disclaimer: This is an educational overview based on publicly available information as of January 03, 2026, and not investment advice or a recommendation. Readers should read the official LIC Protection Plus sales brochure, consult a licensed advisor, and use LIC’s official calculators before buying. Benefits and terms are subject to policy conditions, tax laws, and LIC’s underwriting.
