LIC to close Money Plus

Life Insurance Corporation of India (LIC) will be closing Money Plus, a unit-linked insurance plan (ULIP), in the first fortnight of the next month and introducing Fortune Plus.

Money Plan was introduced in December 2006. At present, LIC has two ULIPs "" Money Plus and Market Plus. Together the two ULIPs generated 79.81 per cent of the first premium income for FY07.

Confirming the news, D K Mehrotra, managing director, LIC, said, "We plan to close Money Plus in the first fortnight of the next month. We have filed two to three products with the Irda and are awaiting a clearance, which we are likely to get next month."

Of the three plans filed by LIC with the insurance regulator, two are ULIPs and the other is a traditional plan. Industry sources said the public sector behemoth would launch Fortune Plus, a ULIP, next month.

The first year premium income in 2006-07 from ULIPs was Rs 31,556.80 crore, which constituted 79.81 per cent of the total new business premium.

Money Plus is a unit-linked endowment plan that offers investment plus insurance during the term of the policy. A person can choose the level of cover within the limits, which will depend on whether the policy is a single premium or a regular premium contract, term chosen and on the level of premium. The minimum policy term is five years and the maximum is 20 years.

Partial withdrawals are allowed from the third year of the policy.

Additional reporting with FALAKNAAZ SYED & RAJESH KURUP