LIC is the most trusted insurance company in India. LIC offers a wide range of insurance products to satisfy the insurance needs of its customers. LIC offers a range of insurance products like endowment plans, term plans, unit-linked plans etc. to satisfy varied insurance needs of citizens. One of the most popular endowment plans of LIC is the Limited Premium Endowment Plan.
LIC Limited Premium Endowment Plan is a plan that offers a dual safety net to citizens. The plan is beneficial for people who are looking for an investment instrument that offers both financial security and handsome savings. Here are some of the quaint essential features and benefits of the Limited Premium Endowment Plan.
What are the features of the Limited Premium Endowment Plan?
LIC’s Limited Premium Endowment Plan has attractive features as under:
- This is a traditional endowment plan that boosts savings and offers financial security
- It is a Limited Premium plan i.e. the premium is to be paid for a limited period of either 8 years or 9 years
- The plan offers flexibility to choose policy term i.e. 12 years, 16 years or 21 years as per the convenience of the customer
- On survival till the end of the policy term, the policyholder is eligible for maturity benefit
- In event of the death of the life assured, the death benefit is paid to the nominee
- The plan offers additional coverage by paying an additional premium of rider sum assured
- The plan is a participating plan so the policyholders are entitled to simple revisionary bonus and final additional bonus if any.
What are the benefits offered by the LIC Limited Premium Endowment Plan?
LIC’s Limited Premium Endowment Plan hosts a range of benefits as under:
Death Benefit : Death benefit refers to benefit payable to the nominee in event of the death of the policyholder. In event of the death of the life assured during the policy term nominee shall receive the death benefit as under:
- Sum assured on death + simple reversionary bonus (if any) + final additional bonus (if any)
- Here the ‘sum assured on death’ is maximum of:
- 10 times of the annualized premium
- 125% of the Basic Sum Assured
Kindly note that the death benefit under the LIC’s Limited Premium Endowment Plan shall not be less than 105% of the entire premiums paid up to the date of death.
Maturity Benefit : In the case of survival of the life assured till the maturity of the policy the policyholder is eligible to receive “the Guaranteed Sum Assured on Maturity” which is equivalent to Basic Sum Assured along with the Simple Reversionary Bonuses as well as the Final and Terminal Additional Bonus if any. The sum assured on maturity will be paid to the policyholder in a lump sum at the end of the policy term.
Participation in Profits : The LIC’s Limited Premium Endowment Plan is a participatory plan i.e. the policy is eligible to participate in profits earned by LIC and the policyholders of this policy are entitled to receive the Simple Reversionary Bonuses and Final additional bonus if any, as declared by LIC. Policies can participate in profits provided that the policy is inforce at that time.
Loan Facility : Loan facility is also available under LIC’s Limited Premium Endowment Plan subject to certain terms & conditions specified in the policy document.
Rebates and Discounts : Attractive Rebates and Discounts are available under the plan. Rebates and discounts are allowed on certain premium payment modes and for higher sum assured.
Optional Benefit: Apart from the above-given benefits following optional benefits are also available under this plan.The policyholder can opt one or both of the following Riders:
- LIC’s Accidental Death and Disability Benefit Rider
- LIC’s New Term Assurance Rider
Policyholders can attach rider sum assured to the policy in order to increase the cover offered by the LIC Limited Premium Endowment Plan. Kindly note that the rider sum assured availed cannot be more than the basic sum assured opted under the plan.
What are the eligibility conditions of the LIC Limited Premium Endowment Plan?
LIC’s Limited Premium Endowment Plan can be purchased only upon satisfying the following eligibility conditions of the plan.
|Min. Basic Sum Assured (SA)||Rs. 3,00,000|
|Max. Basic Sum Assured (SA)||No Limit|
|Policy Term||12 years, 16 years and 21 years|
|Premium Paying Term||8 years and 9 years|
|Min. Age at entry||18 years completed|
|Max. Age at entry||Max. age at entry is different for different policy term and premium paying term as under:|
57 years completed for policy term 12 years and premium paying term 8 years
62 years completed for policy term 12 years and premium paying term 9 years
59 years completed for policy term 16 years and premium paying term 8 years and 9 years
54 years completed for policy term 21 years and premium paying term 8 years and 9 years
|Max. Maturity Age||69 years for 12 year policy term and 8 years of Premium Paying Term|
74 years for 12 year policy term and 9 years of premium paying term
75 years in all other scenarios
How to calculate premium of Limited Premium Endowment Plan?
LIC’s Limited Premium Endowment Plan premium can be easily calculated by referring to the premium rate chart available online. Following is a sample illustration of premium rate chart that will help you in calculating the premium amount of your LIC Limited Premium Endowment Plan.
Let us understand with an example of how the tabular premium rate chart can be used to derive the premium amount of the LIC Limited Premium Endowment Plan.
- Mr X = Age 40
- Basic Sum Assured = Rs. 3,00,000
- Policy Tenure = 12 years
- Premium Paying Term = 9 years
- Premium factor: 103.35
= 103.35/1000 * Rs. 3,00,000
= Rs. 31,005 + Tax
(Since premium rates are of Rs. 1000 per basic sum assured)
What are the various modes of premium payment?
LIC Limited Premium Endowment Plan offers the following modes of premium payment namely annual, half-yearly, quarterly and monthly. Customers as per their convenience can choose the mode of premium payment.
What are the various rebates and discounts offered?
LIC’s Limited Premium Endowment Plan offers attractive rebates and discounts as under:
Rebates on premium paying mode
|For premium payment in yearly mode||2% rebate|
|For premium payment in half-yearly mode||1% rebate|
|For premium payment in Quarterly or monthly mode||NIL|
Rebates on High Sum Assured
|Basic Sum Assured||Rebate|
|Rs 3,00,000 to Rs 4,90,000||NIL|
|Rs 5,00,000 to Rs 9,90,000||0.50 percent of the basic sum assured|
|Rs 10,00,000 and above||0.75 percent of the basic sum assured|
What are various methods of payment?
For the ease of transaction, LIC accepts premium payment in various methods namely
- Net Banking
- Phone Banking
- Debit Card or Credit Card
- Salary Deduction
Further, the premium of LIC Limited Premium Endowment Plan can be paid at various centers namely
- LIC Office and Branches
- Authorized premium collection centers
- LIC Authorized Banks
Thus LIC aims to give utmost flexibility to their customers and freedom to choose their mode, method, and centers for premium payments.
How to buy LIC’s Limited Premium Endowment Plan?
If you wish to purchase the LIC Limited Premium Endowment Plan then the following are the most convenient and simplified ways:
- LIC Office: You can visit the nearest LIC office or branch to purchase the plan
- Authorized Agents: LIC has a huge network of authorized agents and brokers from whom you can purchase the plan
- Online: alternatively, you can also visit the official website of LIC (www.licindia.in) to purchase the Limited Premium Endowment Plan online.
What are the documents required for buying the plan?
In order to purchase the LIC Limited Premium Endowment Plan you need to submit the following required documents:
- A recent coloured passport-sized photograph
- A copy of Identity Proof
- A copy of Address Proof
- A copy of Age Proof
- A completely filled proposal form
What is the procedure to make claim under Limited Premium Endowment Plan?
Claim settlement under LIC Limited Premium Endowment Plan is as under:
Maturity Claim : Payment of eligible dues on the maturity date is called as maturity claim. Following is a list of mandatory documents required to be submitted at LIC for processing maturity claim:
- A completely filled discharge form
- Original copy of the policy document
- Copy of Identity Proof
- completely filled and duly signed NEFT mandate form
Kindly note, the documents required for processing surrender of LIC Limited Premium Endowment Policy is same. After submitting the above documents maturity claim or surrender value of your policy shall be credited in your bank account.
Death Claim : Death claim refers to the payment that is to be done in event of the death of the life assured. Once LIC is intimated about the death of the life assured and all required documents are submitted, LIC shall process and credit the death claim in the nominee’s account. Following is a list of required documents to be submitted for processing death claim:
- A completely and correctly filled claim form
- Original copy of the policy document
- Completely filled NEFT mandate form of nominee’s bank account
- Identity Proof of Nominee
- Proof of title
- Death certificate
- Records related to medical treatment, if any
If the death is due to accident or in case of partial or permanent disability claim then apart from that above documents LIC may ask for additional documents such as:
- A certified copy of FIR
- A copy of Police Inquest Report
- A copy of police punchanama
- A copy of the Post-Mortem Report
- A copy of Coroner’s Report
- Reports and records of hospital treatment
Other additional information
Above we have seen the basic features and benefits of the Limited Premium Endowment Plan now let us understand other additional important information related to the policy:
Revival of the lapsed policy
If the premiums of your LIC Limited Premium Endowment Plan are unpaid even after completion of the grace period then the status of the policy will change and it will be known as a lapsed policy. A lapsed policy does not enjoy the benefits and features offered by the plan so it is always recommended that the policy stays in full force. So if your policy has lapsed then you can revive it within 2 successive years commencing from the time of 1st unpaid premium. Revival of lapsed policy can be done by paying all the unpaid premiums i.e. arrears along with interest. For the revival, the policyholder has to submit satisfactory proof of good health. The revival of sum assured rider can be done along with the revival of basic policy and not separately.
If the premium of the first 2 years of the limited premium endowment plan is paid then the policy can be surrendered. The Guaranteed Surrender value calculated as a percentage of total premiums paid (excluding all the additional and extra premiums as well as premiums for the riders, if any). This percentage factor applicable for calculating the guaranteed surrender value will vary as per policy term and policy year. The surrender value will depend on the policy year when the policy is being surrendered. Following is a sample illustration of guaranteed surrender value factors applicable to total premium paid under the LIC Limited Premium Endowment Plan:
In addition to this, even the surrendered value of the simple and reversionary bonus, that has already been vested would be payable. The factors of guaranteed surrender value in percentage is applicable to the vested bonus are as under:
Loan facility is available under the plan. A policyholder can avail policy loan provided the plan has attained surrender value and subject to fulfillment of certain terms & conditions of the policy.
Service Tax, if any, at the current prevailing rate shall be applicable from time to time. The service tax shall be applicable on premium amount including extra premiums, rider premiums if any. Under this policy, the amount of tax paid shall be excluded while calculating death benefit or maturity benefit.
The cooling-off period also known as the free-look period is a benefit offered under this plan. If the Policyholder is not satisfied with the “Terms and Conditions” mentioned under the policy, the policyholder can return the policy to LIC within 15 days from the date of receipt of such policy document along with a letter stating the reasons of cancellation. On receipt of such request, LIC shall process the cancelation of policy and return the premium amount paid only after deducting certain charges and expenses if any.
Exclusion of the policy
In case of death due to suicide the LIC Limited Premium Endowment Plan shall stand void and the death benefit shall be paid as under:
If the Life Assured commits suicide within a period of 12 months from the date of commencement of policy- 80% of the premiums paid till the date of death excluding any taxes, extra premium and rider premiums other than term assurance rider, if any, provided the policy is in full force.
If the Life Assured commits suicide within a period of 12 months from the revival date of the lapsed policy then the higher amount of 80% of the total premiums that have been paid till the date of death or the surrender value of the policy, would be payable to the nominee.
Yes, additional coverage can be opted under the plan by way of riders and by paying an additional premium.
LIC’s Limited Endowment Plan offers 2 riders namely LIC’s Accidental Death and Disability Benefit Rider and LIC’s New Term Assurance Rider.
The policyholder can choose one or both riders available under the plan as per their convenience. However, the rider sum assured cannot exceed the basic sum assured availed under the policy.
No, even though LIC Limited Premium Endowment Plan is a participating endowment plan the payment of bonus is dependent on the performance of LIC. So there is no guaranteed bonus perhaps simple reversionary bonus and final additional bonus, if any, shall be paid depending upon the performance of the LIC.
If a policyholder fails to pay the premium within grace period the policy would lapse.
Yes, a lapsed policy can be revived within 2 years of the lapse by paying outstanding premiums plus interest thereon.
Yes, you can avail loan on LIC’s Limited Premium Endowment Plan provided the policy has attained surrender value