LIC, Life Insurance Corporation of India, was founded in 1956 and is still the sole public sector company that deals with life insurance in the country. For over 63 years, this veteran company has been the most-trusted name in the field of insurance. With its headquarter in Mumbai, LIC now functions with a total of 8 zonal and 113 divisional offices.
LIC has a firm belief that different people have different needs and necessities. LIC policies, therefore, are diversified in nature and each of them offers divergent solutions to different demands. Many endowment plans have been launched by LIC, one of them being LIC’s New Endowment Plan.
A participating endowment plan, LIC’s New Endowment Plan, offers a composition of safe-keeping and saving. The basic plan offers both death as well as maturity benefit. Ideal for long-term investors, the plan is also considered to be a good option if the investor wants to follow a disciplined way of saving.
LIC’s New Endowment Plan helps an individual with his long-term plans. With a protection cover he is able to keep up with the financial requirements of himself as well as his family at different stages of life. The key features of the plan are given below:
|Age of Entry||8 Years||55 Years|
|Sum Assured||INR 1 lakh||No Limit|
|Policy Term||12 Years||35 Years|
|Maturity Age||75 Years|
Mentioned below are the benefits of LIC’s New Endowment Plan which make it a popular choice for insurance seekers.
Some of the other benefits that the policyholder can enjoy with the plan are as follows:
|Age of the Insured/ Policy Tenure||15 years Policy||25 years Policy||35 years Policy|
|20 years||71.20/Rs 1000 Sum Assured||40.10/Rs 1000 Sum Assured||28.10/Rs 1000 Sum Assured|
|30 years||71.50/Rs 1000 Sum Assured||40.75/Rs 1000 Sum Assured||29.40/Rs 1000 Sum Assured|
|40 years||72.85/Rs 1000 Sum Assured||43.25/Rs 1000 Sum Assured||33.15/Rs 1000 Sum Assured|
|50 years||77.10/Rs 1000 Sum Assured||49.40/Rs 1000 Sum Assured||NA|
This policy offers a rebate for High Sum Assured as well as encourages annual premium payment by offering a discount.
|Mode||% of discount|
|Yearly||2% of the Tabular Premium|
|Mode of Premium Payment||Half-Yearly||2% of the Tabular Premium|
|Quarterly and Salary Deductions||NIL|
|Sum Assured||% of discount|
|Rs 1,00,000 to Rs 1,95,000||NIL|
|Sum Assured Discount||Rs 2,00,000 to Rs 4,95,000||2% of Basic Sum Assured|
|Rs 5,00,000 and above||3% of Basic Sum Assured|
35 year old non-smoker male
Policy tenure= 25 years
Sum Assured is Rs 3,00,000
Premium factor: 40.75/1000 * 3,00,000= Rs 12,225 + taxes
But with discount it comes to Rs 11,381 + taxes.
LIC’s New Endowment Plan would be invalid if the insured individual, whether sane or insane, commits suicide.
This regulation explains the situations under which the money paid towards this policy is not forfeited.
To make the death claim the claimant nominee first has to lodge the claim with LIC office. He then has to submit the following documents:
Maturity Claim and Surrender Claim
In case the policyholder has to make a maturity claim or a surrender claim, he needs to submit the following papers:
LIC’s New Endowment Plan is a participating endowment plan that offers a combination of safe-keeping and savings. The basic plan offers a death as well as maturity benefit. The plan is considered to a good option for long-term investors who are looking for an insurance cover too. The plan is also considered to be an ideal and disciplined way of saving.
The policyholder can add-on LIC’s Accident and Disability Benefit Rider to his policy. This rider may be purchased either at the time of buying the plan or at a later stage, provided that the plan is in force.
If the insured individual has regularly paid all his premiums regularly for the initial three years of purchasing the policy, he is eligible for a surrender value. After three years only, the policy collects a claimable surrender value.
In case the premium paying frequency that you have selected is monthly, then you have a grace period of 15 days. In case of quarterly, semi-annual and annual frequency there is a 30-Day grace period. The policy will lapse if you do not pay your dues within this period.
If the policyholder does not pay the premium amount even in the grace period provided, the policy will lapse. However, the policyholder can revive it within a time limit of two years from the first unpaid premium date. But, it should be remembered that the revival has to be done before the maturity date.
If the policyholder does not pay the premium even during the grace period, the policy will fail. Nevertheless, the policy can be revived within a time period of two years from the first unpaid premium date. But it is crucial that the revival is done before the policy’s maturity date.
LIC’s New Endowment Plan would be invalid if the insured individual, whether sane or insane, commits suicide. If the individual has committed suicide within a year of buying the policy, LIC will not present any claim other than 80% of the amount paid through premiums, if the policy is in force. If the individual does so within a year of revival of the policy LIC will not present any claim other than 80% of the premiums paid till the date of death.
If the policyholder wishes to add the Accidental and Disability Benefit Rider to his base plan, he can do so by adding a small amount to the premium amount. If in case the policyholder’s death or disability in an accident, during the term of the policy, the nominee would receive an extra amount apart from the sum assured.
The maturity benefit under LIC’s New Endowment Plan, which is received by the surviving policyholder when policy term matures, is tax-free under Section 10 (10D) of the Income Tax Act.
An endowment plan which participates in the profits of the company, i.e. gets bonus for the company’s profits, is called a “participating” endowment plan.
Other LIC’s Endowment plans