LIC Protection Plus (886) Calculator

LIC Protection Plus (886) Calculator

What this calculator does

LIC's Protection Plus (Table No. 886) is a non-participating, unit-linked (ULIP) plan that combines a large life insurance cover with an investment fund. Unlike LIC's traditional endowment plans, your premium (after charges) is invested in a fund whose value moves with the assumed growth rate you choose - and on maturity you receive not just the fund value but also a refund of every mortality charge deducted from the fund over the policy term, which is the plan's signature feature.

Key product parameters:

• Minimum Basic Sum Assured of ₹2 crore, with no upper limit.
• Policy Term of 10, 15, 20, or 25 years.
• Premium Paying Term (PPT) - Single Premium (one-time), or a limited pay of 5, 7, 10, or 15 years (never longer than the Policy Term).
• Entry age 18 to 65 years.

This calculator gives you an indicative estimate of:

• the projected Fund Value at maturity, after Premium Allocation Charge, Fund Management Charge, and mortality charges
• the cumulative mortality charges refunded at maturity
• the total Maturity Benefit (Fund Value + mortality charge refund)
• the Death Benefit at any point (the higher of Sum Assured or Fund Value)
• a year-by-year schedule of Fund Value and Death Benefit

Formula Used

Eligibility. Entry age must be between 18 and 65 years, and cover must end by age 85:

$$EntryAge + PolicyTerm \le 85$$

Charges. Each year, the premium received is first reduced by a Premium Allocation Charge (PAC) that tapers over time, then invested into the fund:

$$PAC(year) = \begin{cases} 3.0\% & year = 1 \\ 2.0\% & year = 2 \\ 1.0\% & 3 \le year \le 5 \\ 0.5\% & year > 5 \end{cases}$$ $$NetPremium(year) = Premium(year) \times \big(1 - PAC(year)\big)$$

Mortality charge. Deducted from the fund every year, based only on the Sum at Risk (the Sum Assured still not covered by the Fund Value) and attained age - the core ULIP idea that as the fund grows, less pure insurance cover (and therefore lower mortality charge) is needed:

$$SumAtRisk = \max(SumAssured - FundValue,\ 0)$$ $$MortalityRate(age) = 0.5 + age \times 0.06 \quad (\text{₹ per ₹1,000 Sum at Risk})$$ $$MortalityCharge = \frac{SumAtRisk}{1000} \times MortalityRate(age) \times SmokerFactor \times GenderFactor$$ $$SmokerFactor = \begin{cases} 1.6 & \text{Smoker / Tobacco User} \\ 1.0 & \text{Non-Smoker} \end{cases} \qquad GenderFactor = \begin{cases} 0.9 & \text{Female} \\ 1.0 & \text{Male} \end{cases}$$

Fund growth. After deducting the mortality charge, the fund grows at your chosen assumed rate, net of the 1.35% p.a. Fund Management Charge (FMC):

$$FundValue_{end} = \big(FundValue - MortalityCharge + NetPremium\big) \times \big(1 + AssumedRate - 1.35\%\big)$$

Maturity Benefit. On survival to the end of the Policy Term, you receive the accumulated Fund Value plus a full refund of every mortality charge deducted along the way:

$$MaturityBenefit = FundValue_{maturity} + \sum MortalityCharges$$

Death Benefit. At any point during the Policy Term, the death benefit payable is the higher of the Basic Sum Assured or the Fund Value at that time:

$$DeathBenefit = \max(SumAssured,\ FundValue)$$

Note: these charges, mortality rates, and growth assumptions are illustrative approximations for planning purposes, not LIC's official IRDAI-approved rates, which depend on full medical underwriting and can change over time. Fund growth is never guaranteed in a ULIP. Always confirm exact figures with LIC or an authorized agent before purchasing a policy.

How to Use

1. Enter your Age at Entry in years (18 to 65).
2. Select your Gender and Smoking/Tobacco Habit - both affect the mortality charge.
3. Choose your Policy Term - 10, 15, 20, or 25 years.
4. Choose your Premium Paying Term - Single Premium, or 5/7/10/15 years (must not exceed the Policy Term).
5. Enter your Premium Amount - annualized, or a one-time amount if you picked Single Premium.
6. Enter your desired Basic Sum Assured (minimum ₹2 crore).
7. Choose an Assumed Fund Growth Rate for illustration (4% or 8% p.a.).
8. Choose your Premium Payment Mode (ignored for Single Premium).
9. Click Calculate Fund Value to see your projected fund value, maturity benefit, death benefit, and the year-by-year schedule.

Worked Example

Suppose a 35-year-old non-smoker male chooses a Policy Term of 20 years, a Premium Paying Term of 10 years, an Annualized Premium of ₹2,00,000, a Basic Sum Assured of ₹2,00,00,000, and an assumed growth rate of 8% p.a.

Year 1:

$$NetPremium = 2{,}00{,}000 \times (1 - 0.03) = ₹1{,}94{,}000$$ $$SumAtRisk = 2{,}00{,}00{,}000 - 1{,}94{,}000 = ₹1{,}98{,}06{,}000$$ $$MortalityRate(35) = 0.5 + 35 \times 0.06 = 2.6$$ $$MortalityCharge = \frac{1{,}98{,}06{,}000}{1000} \times 2.6 = ₹51{,}496$$ $$FundValue_{end\ of\ year\ 1} = (1{,}94{,}000 - 51{,}496) \times (1 + 0.08 - 0.0135) \approx ₹1{,}51{,}981$$

Continuing this year by year to the end of the 20-year Policy Term (with ₹2,00,000 paid annually for the first 10 years, then no further premiums):

• Total Premiums Payable: ₹20,00,000
• Cumulative Mortality Charges: approximately ₹11,50,800
• Projected Fund Value at Maturity: approximately ₹30,87,400
• Total Maturity Benefit (Fund Value + mortality charge refund): approximately ₹42,38,200

If death occurs at any point during the Policy Term, the family receives the higher of the ₹2,00,00,000 Sum Assured or the Fund Value at that time - which for most of the term is the Sum Assured, since the Fund Value stays well below it.