LIC, the state-owned insurance group, with over 2000 branches in the country, is India’s largest insurance company. Incorporated in the year 1956, LIC has touched the lives of millions and millions of people in India. With a network of over 2000 branches all around the country, LIC offers a variety of insurance policies to the customers.
LIC also offers a number of endowment plans and one of their very effective life insurance plans has been LIC’s Single Premium Endowment Plan. This plan is a participating, non-linked endowment plan. As there is only one premium that is paid at the beginning of the plan, the policyholder is the policyholder is free from the cycle of premium payment. He also need not worry about a policy lapse or non-payment of returns.
An endowment plan is basically a life insurance policy with an element of savings. Thus, in Endowment Plans, the policyholder needs to pay a premium for a specific tenure and he would get a maturity benefit at the end.
There are multiple types of Endowment Plans with several modes of premium payment. LIC’s Single Premium Endowment Plan is an endowment plan wherein premium needs to be paid in a lumpsum at the beginning and maturity benefit is paid at the end of the policy tenure.
LIC’s Single Premium Endowment Plan gives a dual advantage of protection along with regular savings.
Mentioned below are the key features of the plan :
As the policy is a single premium policy, there is no other payable mode. The other criteria for the eligibility of the plan are :
|Age of Entry||90 days||65 Years|
|Sum Assured||INR 50,000||No Limit|
|Policy Term||10 Years||25 Years|
|Maturity Age||18 years||75 Years|
Given below is a sample premium and the corresponding Sum Assured for a 30-year-old male. The premium amount is mentioned in INR, for a policy term of 25 years.
|Age at Entry||30 years|
|Policy Term||25 years|
|Basic Sum Assured||INR 50,000|
|Amount of Single Premium||INR 23,545|
|Single Premium Endowment Plan premium per Rs 1,000 Sum Assured|
|Age (Nearest birthday)||Term|
|10 years||15 years||25 years|
|10 years||756.90/ Rs 1,000 Sum Assured||640.30/ Rs 1,000 Sum Assured||463.10/ Rs 1,000 Sum Assured|
|20 years||757.60/ Rs 1,000 Sum Assured||641.55/ Rs 1,000 Sum Assured||465.85/ Rs 1,000 Sum Assured|
|30 years||757.95/ Rs 1,000 Sum Assured||642.60/ Rs 1,000 Sum Assured||470.90/ Rs 1,000 Sum Assured|
|40 years||759.75/ Rs 1,000 Sum Assured||647.65/ Rs 1,000 Sum Assured||488.35/ Rs 1,000 Sum Assured|
|50 years||766.05/ Rs 1,000 Sum Assured||662.25/ Rs 1,000 Sum Assured||527.35/ Rs 1,000 Sum Assured|
|60 years||777.50/ Rs 1,000 Sum Assured||688.60/ Rs 1,000 Sum Assured||–|
If the policyholder opts for a higher sum assured, he gets a discount in the premium amount. He can, therefore, get a bigger life cover from the same premium amount.
|Sum Assured in INR||Percentage of Rebate (Of the Sum Assured)|
|1,00,000 to 1,95,000||18%|
|2,00,000 to 2,95,000||25%|
To make the death claim the nominee needs to lodge the claim at LIC of India’s office. The following documents are to be submitted:
Maturity Claim and Surrender Claim
In case the policyholder survives the policy, he will receive the maturity benefit. He has to make a maturity claim for which he needs to submit the following :
LIC’s Single Premium Endowment Plan would be invalidated if the insured, whether sane or insane, commits suicide within 12 months of buying the plan. LIC will not present any claim other than 90% of the amount paid through the single premium, not including the extra premium paid and taxes.
LIC’s Single Premium Endowment Plan is a participating, non-linked endowment plan. As there is only one premium that is paid at the beginning of the plan, the policyholder is the policyholder is free from the cycle of premium payment. It helps the policyholder to get a life cover along with assured returns.
As LIC’s Single Premium Endowment Plan is, after all, a life insurance policy, they also are eligible for tax benefits under Section 80C as well as Section 10 (10 D). But the policyholder needs to be careful when purchasing the policy else, the benefits might not be availed.
If the policy is surrendered during the first year then the guaranteed surrender value is equal to 70% of the premium+taxes and extra premium, if there is any. After the first year then the guaranteed surrender value is equal to 90% of the premium+taxes and extra premium if there is any.
By opting for a higher sum assured, the policyholder can get a discount in the premium amount. He, therefore, gets a bigger life cover from the same premium amount.
The grace period is not applicable in LIC’s Single Premium Endowment Plan as after paying a single premium amount, there is no further premium amount due.
After the completion of one year of buying the policy, the policyholder can ask for a loan. The loan amount has to be within the surrender value of the plan. The interest rate on the loan is compounded half-yearly at a rate that is defined by LIC at the time of sanctioning the loan.
Other LIC’s Endowment plans