New Delhi: Indian insurer (Life Insurane Coporation) and Japanese Nomura have bought back their open ended tax saving scheme called the Unit Linked Insurance Scheme which will have for investors multiple benefits in the long term period. The main attractions of this scheme shall the absence of exit load, free accident cover, and maturity benefit of 2.5% to 10% depending on target amount. With the income tax declaration coming soon, LIC Nomura has made the right decision to launch the product at time, when people will be looking to save under Section 80C.
Not just the brand name, but the facilities of the plan are just as attractive for investors. The life insurance cover of Rs 15 lakhs, and a free accident cover of Rs 1 lakh. Also, there is the option of Auto cover, where the existing units of the policy will be used for paying the premium, incase the investor fails to pay up for it. Also, there has been a compolsury 3 year lock-in period for the scheme. Explaining this clause, Nilesh Sathe, CEO of LIC Nomura said “The lock-in period helps in better management of the investments by the fund manager and thereby, higher returns. There is no comfort in management when the money is withdrawn by investors from time to time.”
Looking into the break up of investment for this fund, about 20-35% of the investment will be in debt instruments, while 65-80% in equity instruments. The minimum amount for monthly SIP investment is Rs 100, half yearly SIP investment is Rs 500, and yearly investment is Rs 1000. The scheme was originally launched in 1989 and has so far garnered assets worth Rs 140 crore. The expense ratio of the fund is two per cent and at no point will it exceed 2.25%.