LIC's Wealth Plus misleading concepts

I am going to show actual Concepts/Facts(based on LICINDIA.COM) with my analysis.

LIC's Concept#1 
LIC’s Wealth Plus is a unit linked plan that safeguards your investment from market fluctuations, so that your investments are protected in financially volatile times. This plan offers payment of Fund Value at the end of policy term, based on highest Net Asset Value (NAV) over the first 7 years of the policy, or the NAV as applicable at the end of the policy term, whichever is higher. NAV of the fund will be subject to a minimum of Rs. 10/-. The policy term is 8 years with an extended life cover for 2 years after the completion of policy term. This plan will be available for sale for a limited period.


Answer#1 if fund perform in following manner.

Wealth Plus	As Shown by LIC	Reality
Year	Closing NAV in Each Year	Closing NAV in Each Year
1	10	10
2	15	10.13
3	25	6.17
4	14	6.78
5	12	8.45
6	19	9.35
7	24	10.25
8	23	10.02
Highest NAV in 1st 7 Years	25	10.25

Do not hope LIC to give you return with NAV of Rs.25 but you will get your return with Rs.10.25.So,in reality your applicable highest NAV will be little more than Rs. 10 as they assure minimum of Rs.10 

LIC's Concept #2 

Guaranteed NAV: In this product there is a guarantee of the highest NAV recorded on a daily basis, in the first 7 years of the policy, subject to a minimum of Rs. 10. This means the payment at the end of the policy term will be based on highest Net Asset Value (NAV) recorded over the first 7 years of the policy, or the NAV as applicable on the end of the policy term, whichever is higher. The guarantee will be applicable only for payment made at the end of the policy term irrespective of any partial withdrawals made during the policy term. The period of 7 years starts from the date of commencement of policy.

Answer#2 If you opt for 8 years as policy term then you have to continue remain invested to get guarantee highest NAV for all Units.if you do partial withdraw then you will not get highest NAV on sold units.

LIC's Concept#3 Guarantee highest NAV at No FREE?

Answer#3 There is a big list of ULIP product charges too like 

Mortality Charge

Service tax

Policy Admin Charge

Guarantee Charge (It charges for guarantee return too :) )

Other Charges

FMC -Fund Management Charges

LIC's Concept#4 (based on LICINDIA.COM)

Warning  -IN THIS POLICY, THE INVESTMENT RISK IS BORNE BY THE POLICY HOLDER.

Answer#4 -The policy talks about guarantee highest return and clearly mention that risk has be borne by the customer.They do not guarantee your invested amount too.Hows funny is this!!

LIC's Concept#5 (based on LICINDIA.COM) 

We have different fund category with equity options too.

Answer#5 They have different fund category but they have full right to put 100% Money in debt fund where you can not expect return more than Fixed deposit interest means around 7%-8%. As i mention your fund NAV will not cross more than Rs 10-11 in 1st answer.

So,Please do not ever think about LIC's Money plus plan and similar guarantee return plans 

More details please read – 

ULIP Fundamentals#3 with fast facts