Investing in a life insurance plan that offers not just financial security but also wealth creation is a smart choice in today’s world. The LIC Index Plus Plan 873 is a Unit Linked Insurance Plan (ULIP) introduced by LIC of India that combines life insurance coverage with the opportunity to invest in top stock market indices like the Nifty 50 and Nifty 100.

It is designed for individuals who want to protect their family’s future while tapping into the potential growth of the equity markets.

What is LIC Index Plus Plan 873?

The LIC Index Plus Plan 873 is a modern life insurance plan that gives you the dual benefit of life cover and market-linked investments. Unlike traditional insurance plans that offer only a fixed return, this ULIP allows part of your premium to be invested in the stock market through two major indices — Nifty 50 and Nifty 100.

This plan was launched on February 6, 2024, and focuses on providing both insurance protection and wealth accumulation over the policy term through unit-linked funds.

Key Features of LIC Index Plus Plan 873

Understanding the key features helps in assessing if this plan suits your financial goals.

• Life Insurance Cover: The plan provides a life cover to financially protect your family. In case of unfortunate demise, the nominee receives the higher of sum assured or the fund value.
• Unit Linked Plan: Part of your premium is invested in market-linked funds, meaning your returns depend on the performance of chosen indices (Nifty 50 or Nifty 100).
• Two Fund Options:
  • Flexi Growth Fund linked to Nifty 100
  • Flexi Smart Growth Fund linked to Nifty 50
• Flexible Premiums: You can choose to pay premiums monthly, quarterly, half-yearly, or annually. The minimum annual premium is ₹30,000.
• Sum Assured: The sum assured can be up to 10 times your annual premium based on age.
• Guaranteed Additions: From the 6th policy year onwards, guaranteed additions are credited to your fund, increasing the investment value.
• Partial Withdrawals: Allowed after completion of 5 years, with limits on the percentage of fund that can be withdrawn depending on policy year.
• Switching Facility: You can switch funds up to 4 times a year without any charges, allowing you to rebalance your investments according to market conditions.
• Refund of Mortality Charges: On survival till maturity, mortality charges deducted for life cover are refunded.
• Optional Rider: LIC’s Linked Accidental Death Benefit Rider can be added for enhanced death benefits.
• Surrender Option: Available after 5 years, allowing you to exit the policy and receive the fund value.

Benefits of LIC Index Plus Plan 873

Why should you consider this plan? Here are some important benefits:

1. Dual Advantage: Insurance + Investment

Unlike traditional plans, LIC Index Plus Plan 873 offers insurance coverage while helping you create wealth via the stock markets, combining protection with growth potential.

2. Market-Linked Growth

Returns are linked to the performance of major stock indices (Nifty 50/100), which generally provide higher long-term growth than fixed-income options.

3. Guaranteed Additions

This plan provides guaranteed additions starting from the 6th year, boosting your fund value irrespective of market conditions.

4. Premium Flexibility

Choose how frequently and how much premium you want to pay within plan limits, making it adaptable to your budgeting needs.

5. Partial Withdrawals

Post the mandatory 5-year lock-in, you have the option to make partial withdrawals, providing liquidity for life’s emergencies.

6. Tax Benefits

Premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, maturity proceeds are tax-free under Section 10(10D).

How Does LIC Index Plus Plan 873 Work?

When you invest in this plan, your premiums are split into two parts:

• Cost of Insurance: A portion of your premium goes towards life insurance coverage, including mortality charges.
• Investment in Units: The remaining amount buys units in the chosen fund (Nifty 50 or Nifty 100 linked fund).

The value of your units fluctuates according to stock market performance. At maturity, you get the fund value, including any guaranteed additions. In case of death, your nominee gets the higher of the sum assured or fund value, ensuring financial security.

Introducing LIC Index Plus Plan 873 Calculator

The LIC Index Plus Plan Calculator is an online tool designed to simplify understanding this plan’s financials. It helps you:

• Estimate your annual or monthly premiums
• Calculate the maturity benefit based on assumed market growth
• Understand the death benefits payable to beneficiaries
• Gauge the fund value and surrender value at any policy year

How to Use LIC Index Plus Plan Calculator?

Using the calculator is easy and user-friendly. Here is a simple step-by-step guide:

1. Enter Your Age: Your current age determines eligibility and premium rates.
2. Select Policy Term: Choose how many years you want insurance and investment to continue.
3. Input Sum Assured: Decide the insurance cover amount you need.
4. Enter Premium Amount: Specify how much annual premium you can afford (minimum ₹30,000).
5. Select Fund Option: Choose either the Flexi Growth Fund (Nifty 100) or the Flexi Smart Growth Fund (Nifty 50).
6. View Calculations: The calculator will display the expected maturity amount, death benefit, fund value, and surrender value based on your inputs.

Example Calculation Using LIC Index Plus Plan 873 Calculator

Let’s understand with a practical example how your policy might grow:

• Age: 34 years
• Policy Term: 21 years
• Annual Premium: ₹1,00,000
• Sum Assured: 10 times premium = ₹10,00,000
• Fund Chosen: Flexi Growth Fund (Nifty 100)

Policy Year	NAV Value	Premium Paid	Fund Value	Surrender Value	Death Benefit
1	₹10	₹1,00,000	₹1,00,000	₹0	₹10,00,000
5	₹14.6	₹5,00,000	₹5,00,000	₹0	₹10,00,000
10	₹23.5	₹10,00,000	₹15,13,487	₹15,13,487	₹15,13,487
15	₹34.5	₹15,00,000	₹26,79,459	₹26,79,459	₹26,79,459
21	₹67.25	₹21,00,000	₹61,85,851	₹61,85,851	₹61,85,851

Note: NAV values represent assumed market growth and are illustrative.

As seen above, after 21 years, your estimated maturity amount can be over ₹6 crores, depending on market performance. The death benefit also provides substantial security to your family.​

Advantages of Using LIC Index Plus Plan Calculator

• Quick Estimation: Get immediate premium and maturity projections.
• Better Planning: Helps in aligning your financial goals with policy benefits.
• Customization: Test different sums assured, premium amounts, and fund choices.
• Financial Clarity: Understand charges, fund values, and benefits clearly.
• Informed Decisions: Avoid surprises by knowing how market factors may impact returns.

Charges in LIC Index Plus Plan 873

Like all ULIPs, this plan has some costs deducted from premiums:

• Premium Allocation Charge: Deducted from the premium to cover initial expenses.
• Policy Administration Charge: Regularly deducted as a flat fee.
• Fund Management Charge: Charged for managing your investments.
• Mortality Charge: Covers life insurance risk cost; refunded at maturity if policy survives.

Using the calculator, you can factor these charges into expected returns to get a realistic picture of benefits.​

Important Tips While Using LIC Index Plus Plan Calculator

• Remember that ULIP returns depend on market performance, which can be volatile.
• Always use the calculator with updated NAV values for accuracy.
• Consider your risk tolerance before choosing the Nifty 50 or Nifty 100 fund.
• Use the partial withdrawal and switching features to adjust investments during the policy term.
• Check the premium payment mode and term for the most suitable plan structure.

Frequently Asked Questions

Conclusion

The LIC Index Plus Plan 873 offers an excellent opportunity to combine insurance protection with equity market growth potential, along with flexibility in premiums and fund choices. The LIC Index Plus Plan Calculator is an essential tool for prospective policyholders to evaluate the possible benefits, premiums, and returns based on personal inputs.