LIC Single Premium Endowment Plan
LIC Single Premium Endowment (Plan No. 914, UIN No. 512N277V02) is a non-linked, participating endowment plan that combines life insurance and savings into a single package. This combination of protection and saving ensures that your family is always in a good financial position. You can make a single premium payment at the start of the policy term with this plan. As this plan is a participating endowment plan, the bonus will be paid during the policy’s term.
If the policyholder dies, the sum assured plus any bonuses is paid out according to the terms and conditions. The plan also stipulates that if the policyholder lives to the duration of the insurance term, a lump sum payment will be made to him or her. This insurance plan also includes a loan option for clients who require immediate cash.
Read more to know about the LIC of India Single Premium Endowment Plan in detail!
Key Highlights Of The Plan
|Launch Date||1st February 2020|
|Plan Type||Non-Linked, Participating, Individual Life Assurance, Savings Plan|
Features Of LIC Single Premium Endowment Plan
The following are some of the features of the LIC Single Premium Endowment plan:
- Single-Premium Plan: As it is a single premium plan, the whole premium is required to be paid before the commencement of the policy.
- Free Look Period: If the policyholder is unhappy with the plan, he/she has 15 days from the date of issuance to terminate it. The free-look period is the name given to this period. The premium paid, less any applicable expenses would be reimbursed upon cancellation.
- Guaranteed Surrender Value: If you cancel the plan, you will receive a back part of the single payment paid. The guaranteed surrender value is based on the untaxed premium amount. For surrendering in the 1st year, you will get 75% of the single premium. And for any time after that, you will get 90% of the single premium.
- Tax Benefits: The single premium paid for this LIC one-time investment plan is considered a tax-free expense. Section 80C of the Income Tax Act of 1961 allows you to deduct the premium you paid. Additionally, the death and maturity benefits you receive from this LIC one-time investment plan are tax-free. You are not required to pay any taxes on the benefits you receive.
- Rebate: The plan has the following rebates for the respective sum assured value:
|Sum Assured (In Rs.)||Rebates|
|50,000 To 95,000||Nil|
|1,00,000 to 1,95,000||18% Of S.A.|
|2,00,000 to 2,95,000||25% Of S.A.|
|3,00,000 & Above||30% Of S.A.|
Eligibility Criteria Of LIC Single Premium Endowment Plan
|Minimum Entry Age||90 Days (Completed)|
|Maximum Entry Age||65 Years|
|Minimum Policy Term||10 Years|
|Maximum Policy Term||25 Years|
|Minimum Sum Assured||Rs. 50,000|
|Maximum Sum Assured||No Limit|
|Premium Payment Mode||Single-Premium Only|
|Maximum Maturity Age||75 Years|
Benefits Available Under LIC Single Premium Endowment Plan
The plan includes a plethora of benefits that assist the policyholder. Some of them are mentioned below:
- Death Benefit: A death benefit is given if the insured dies during the policy’s term. This benefit is contingent on the insured’s death date. If the death of the insured occurs during the policy term before the commencement of risk, there will be the return of a single premium without any interest rates. However, if the insured dies after the date of commencement of risk, the sum assured, vested reversionary bonuses, and any final further bonuses are paid.
- Maturity Benefit: The policyholder will get the sum of ‘Sum Assured’, ‘Simple Reversionary Bonus’ (which is declared at the end of each year), and ‘Final Addition Bonus’ at the plan’s maturity. On survival, a lump sum payment will be made, and the policy will be terminated.
- Participation In Profits: The plan is a participating endowment plan, which means it will collect ‘Simple Reversionary Bonuses’ and, if applicable, a ‘Final Additional Bonus’.
How Does The LIC Single Premium Endowment Plan Function?
To understand how the LIC Single Premium Endowment plan functions, we need to go through an example:
Let’s assume that Mr. Suresh, age 35 years, wishes to buy this plan with the sum assured of Rs. 2,00,000 and policy term 20 years. We assume that the current tax rate is 4.5%. Therefore, Mr. Suresh needs to pay his single premium of Rs. 105200 + Rs. 4734 = Rs. 109934.
If Mr. Suresh dies within the policy period, let’s say after 10 years
If Mr. Suresh dies after 10 policy years, his nominee will get Sum Assured + Simple Reversionary Bonus + Final Addition Bonus.
SUM ASSURED: Rs. 2,00,000
SIMPLE REVERSIONARY BONUS: We’ve assumed that a bonus of Rs. 45 every 1,000 of Sum Assured is declared every year.
Therefore, the Simple Reversionary Bonus = Rs. 45 Per 1000 Sum Assured For 10 Years = Rs. 45 X 200 X 10 = Rs. 90,000
FINAL ADDITION BONUS: A one-time Final Addition Bonus of Rs. 20 per 1,000 Sum Assured has been assumed.
Therefore, Final Addition Bonus = 20 X 200 = Rs. 4000
TOTAL VALUE: The nominee will get Rs. 2,00,000 + Rs. 90,000 + Rs. 4000 = Rs. 2,94,000.
If Mr. Suresh survives the policy term
If Mr. Suresh survives the policy term, he will get Sum Assured + Simple Reversionary Bonus + Final Addition Bonus.
SUM ASSURED: Rs. 2,00,000
SIMPLE REVERSIONARY BONUS: Rs. 45 X 200 X 20 = Rs. 1,80,000
FINAL ADDITION BONUS: 20 X 200 = Rs. 4000
TOTAL VALUE: Rs. 2,00,000 + Rs. 1,80,000 + Rs. 4000 = Rs. 3,84,000
Therefore, Mr. Suresh will get Rs. 3,84,000 on the maturity of the policy
Optional Benefits Under LIC Single Premium Endowment Plan
Under the LIC Single Premium Endowment Plan, the following options are also available to the policyholder:
The plan provides two riders to the policyholder with an additional payment. They are as follows:
- Accidental death and disability benefit rider
- New term assurance rider
Settlement Option For Maturity Benefit:
Instead of a lump sum payment, the ‘Settlement Option’ under the plan allows you to receive the maturity benefit in installments over a 5-, 10-, or 15-year period. Installments must be paid in advance at yearly, half-yearly, quarterly, or monthly intervals, depending on the option selected.
Option To Take Death Benefit In Instalments:
Instead of receiving a lump-sum payment, this option allows you to receive death benefits in installments over a 5-, 10-, or 15-year period. Installments must be paid in advance at yearly, half-yearly, quarterly, or monthly intervals, depending on the option selected.
How To Purchase LIC Single Premium Endowment Plan?
Go to your nearest LIC branch to purchase the “LIC Single Premium Endowment” policy in person. Make sure you have all of the required papers in order to purchase the policy as soon as possible. For more information, contact the company at +91-022 6827 6827.
If you continue to have problems, you can seek help from Probus Insurance.
Frequently Asked Questions
- Age proof
- Address proof
- Identity proof
- Income proof
- Duly filled and signed proposal form