What is LIC New Endowment Plus Plan 935?

LIC’s New Endowment Plus (Plan No. 935, UIN: 512L301V02) is a Unit Linked, Non-Participating, Regular Premium, Individual Life Insurance Plan offered by Life Insurance Corporation of India. It is a ULIP (Unit Linked Insurance Plan) that combines life insurance protection with market-linked investment growth.

This plan is designed to help you create long-term wealth while simultaneously providing financial security to your family. Premiums paid into this plan (after deducting applicable charges) are invested in your chosen fund, and the fund value grows based on the Net Asset Value (NAV) of that fund.

For complete and official policy details, visit the LIC New Endowment Plus Plan No. 935 Official Details on the LIC India website.

How ULIP Plans Work

A Unit Linked Insurance Plan (ULIP) is different from traditional LIC plans. Here is how it works in simple steps:

• You pay premium – Yearly, half-yearly, quarterly, or monthly via NACH.
• Charges are deducted – Premium allocation charge, administration charge, and mortality charge are deducted.
• Remaining amount buys units – The net premium purchases units of your chosen fund at current NAV.
• NAV moves daily – As per market performance, the NAV increases or decreases each day.
• Fund Value = Units × NAV – Your policy value is the total number of units multiplied by current NAV.
• On maturity – You receive the Fund Value as the maturity benefit.

Fund Options Explained

LIC Plan 935 offers four fund types. Each fund has a different mix of equity (shares), government/corporate bonds, and money market instruments:

• Bond Fund – Zero equity. Focused on government and corporate debt. Best for very conservative investors. Low risk, stable but modest returns.
• Secured Fund – 15%–55% equity with rest in debt. Suitable for investors wanting some equity exposure with safety. Lower-medium risk.
• Balanced Fund – 30%–70% equity, rest in debt. Good mix for medium-term wealth building. Medium risk, medium return potential.
• Growth Fund – 40%–80% equity. Highest equity proportion. Suitable for long-term investors who can tolerate market fluctuations. High risk, highest return potential.

Fund Management Charge (FMC) is 0.70% per annum for all four fund types, deducted daily while computing NAV.

NAV Growth Explained

NAV stands for Net Asset Value. It is the per-unit value of the fund on any given day. LIC computes NAV daily using the formula:

NAV = (Market Value of Investments + Current Assets – Current Liabilities) ÷ Number of Units Outstanding

When you pay premium, you buy units at today’s NAV. When you surrender, withdraw, or the policy matures, units are redeemed at that day’s NAV. If NAV has grown over the years, the value of your units (and hence your fund value) is higher. There is no bid-offer spread in LIC Plan 935 — the buy and sell price of units is the same NAV.

Benefits of Long-Term Investing in Plan 935

• The plan term can be up to 20 years, allowing your investment to grow via the power of compounding.
• Premium allocation charges reduce over time — from 7.5% in Year 1 to just 3% from Year 6 onwards — meaning more of your money gets invested.
• The lock-in period of 5 years encourages disciplined long-term investing.
• Longer policy term typically means greater wealth accumulation through NAV growth.
• You get life cover throughout the policy term, ensuring your family is protected.

Charges in ULIP Plans (Plan 935)

Unlike traditional insurance plans, ULIPs clearly disclose all charges. In LIC Plan 935, the main charges are:

• Premium Allocation Charge: 7.5% (Year 1), 5% (Years 2–5), 3% (Year 6+). Deducted from each premium before buying units.
• Fund Management Charge (FMC): 0.70% p.a. of fund value. Deducted daily via NAV adjustment.
• Policy Administration Charge: Monthly charge deducted by cancelling units. Starts at lower of 0.35% of instalment or ₹100.
• Mortality Charge: Age-based cost of life insurance. Deducted monthly. Ranges from ₹1.23 to ₹6.18 per ₹1,000 Sum at Risk.
• Switching Charge: 4 free switches/year, then ₹100 per switch.
• Partial Withdrawal Charge: ₹100 flat per withdrawal.
• Discontinuance Charge: Applicable if surrendered within 5 years. Nil from Year 5 onwards.

Tax Benefits

LIC Plan 935 may offer tax benefits under Indian income tax laws, subject to prevailing provisions:

• Section 80C: Premiums paid towards LIC Plan 935 may be eligible for deduction up to ₹1.5 lakh per year.
• Section 10(10D): Maturity proceeds and death benefits may be tax-free, subject to conditions. Premiums should not exceed 10% of Sum Assured (which is already the case as SA = 10× annual premium in this plan).
• Tax laws are subject to change. Please consult a tax advisor for personalised guidance.

Risks and Rewards

LIC Plan 935 is a market-linked product. Unlike traditional LIC endowment plans, returns are not guaranteed. Important points to know:

• The investment risk in the portfolio is borne by the policyholder, not LIC.
• NAV can go up or down depending on market conditions.
• No liquidity is available in the first 5 years (lock-in period).
• Partial withdrawals are allowed from 6th year onwards, subject to minimum balance conditions.
• In case of death, the highest of — Sum Assured, Fund Value, or 105% of premiums paid — is payable to the nominee.
• On maturity, the entire fund value is paid.

Who Should Invest in LIC Plan 935?

• Working professionals aged 25–45 looking for long-term wealth creation with life cover.
• Those who want the flexibility to choose between conservative and aggressive investment options.
• Individuals comfortable with market-linked returns and a 10–20 year investment horizon.
• People who want insurance + investment in one product with tax benefits.
• Those looking to invest systematically with premiums starting from ₹20,000/year.