LIC Nomura has re-launched its open-ended tax-saving scheme — Unit Linked Insurance Scheme — with additional benefits such as no exit load, free accident cover and maturity addition benefit of 2.5 to 10 per cent of target amount, among others.
“This is the right time to re-launch this product as investors would be looking at tax relief under section 80C,” said Nilesh Sathe, Director and CEO of LIC Nomura Mutual Fund.
The scheme will provide life insurance cover up to Rs 15 lakhs and free accident cover up to Rs 1 lakh. The auto cover facility will be available if the contribution for the target amount has not been received from the investor. In such a case, the premium will be paid from the existing units. However, the value of this investment cannot go below Rs 5,000.
The scheme has a lock-in period of three years. “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 There is no comfort in management when the money is withdrawn by investors from time to time,” said Sathe.
About 20-35 per cent of the investment will be in debt instruments, while 65-80 per cent 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.