Endowment policies are those which promise a guaranteed corpus either on death during the policy tenure or when the plan matures. These plans, thus, let you create a secured corpus for your future. Endowment plans are suitable for individuals who are looking for guaranteed returns on their investments and would also like to have insurance coverage. LIC Single Premium Endowment Plan is one such endowment policy which takes care of the dual needs of individuals.
Overview of LIC Single Premium Endowment Plan
This LIC one time investment plan requires only a single premium while the tenure continues for longer. You need to pay one premium to buy the policy and then rest assured for the remaining duration of the plan. This LIC one time investment plan is a participating endowment plan which earns bonuses throughout the policy duration which further enhance the death and maturity benefits.
Key features of LIC Single Premium Endowment Plan
Here are the notable features which make this LIC one-time investment plan stand out from others –
- Simple reversionary bonuses are earned during the term of the plan. Moreover, along with death or maturity benefit, a final additional bonus might also be payable
- Premium discounts are available if you choose a high level of coverage under the plan
- You can avail a policy loan if you need funds over the duration of the plan
- The plan promises a guaranteed surrender value if you want to exit before the completion of the term
Benefits of LIC Single Premium Endowment Plan
This LIC one time investment plan offers many benefits which are listed below-
- Death benefit
If the insured dies within the term of the policy, a death benefit is paid. This benefit depends on the time when the insured dies. If the risk cover has not started for the insured and the insured dies, the premiums paid would be refunded. However, if the risk cover has started and then the insured dies, the sum assured, vested reversionary bonuses and any final additional bonus is paid. Risk cover does not start immediately if the insured is below 8 years. In that case, the coverage starts after two years of buying the policy or from the policy anniversary following the insured’s 8th birthday, whichever is earlier.
- Maturity benefit
If the insured survives the duration of the policy, the sum assured, vested reversionary bonuses and a final additional bonus is paid as the maturity benefit.
- Premium discounts
If you choose a sum assured of INR 1 lakh and above, you stand to earn a premium discount in the single premium which is payable for the policy. The discount would be as follows –
|Sum assured level opted||Discount available|
|INR 100,000 to INR 195,000||18% of the sum assured|
|INR 200,000 to INR 295,000||25% of the sum assured|
|INR 300,000 and above||30% of the sum assured|
- Policy loan
You can get a loan under the policy if the first year of the policy has been completed. The amount of loan allowed and the interest thereon is determined by LIC from time to time.
- Surrender value
You can exit the policy before the term of the plan comes to an end. This is called surrender and the plan allows surrender any time during the policy duration. When the policy is surrendered you get a surrender value which is higher of the guaranteed surrender value or the special surrender value. The guaranteed surrender value is calculated as follows –
- If the policy is surrendered in the first policy year – 70% of the single premium paid + (vested bonuses till surrender * surrender value factor for bonus)
- If the policy is surrender after the completion of the first policy year – 90% of the single premium paid + (vested bonuses till surrender * surrender value factor for bonus)
Tax benefit of LIC Single Premium Endowment Plan
The single premium paid for buying this LIC one time investment plan is considered to be a tax-free expense in your hands. You can claim a deduction for the premium paid under Section 80C of the Income Tax Act, 1961. The maximum limit of deduction which can be claimed on premium payments is up to INR 1.5 lakhs. Moreover, the death or maturity benefits that you receive from this LIC one time investment plan are also tax-free benefits. You don’t have to pay any tax on these benefits that you receive. They would be completely tax-free without any limits under Section 10 (10D) of the Act.
Exclusions under LIC Single Premium Endowment Plan
If the insured dies due to suicide within 12 months of buying the policy, the sum assured would not be paid as death benefit. In that case, 90% of the single premium paid by the policyholder would be refunded back and the policy would be terminated by the company.
Eligibility conditions of LIC Single Premium Endowment Plan
|Entry age||90 days to 65 years|
|Maturity age||18 years to 75 years|
|Term of the plan||Minimum – 10 years|
Maximum – 25 years
|Sum assured||Minimum – INR 50,000|
Maximum – no limit
|Single premium||Depends on age, term and sum assured|
Premium rates of LIC Single Premium Endowment Plan
The single premium payable to buy this LIC one time investment plan depends on your age, policy term and the sum assured that you select. Here are, therefore, the sample premium rates which you would have to pay at different policy terms and entry ages if the sum assured is assumed to be INR 10 lakhs
|Age of the insured||Term 10 years||Term 15 years||Term 25 years|
|30 years||INR 457,950||INR 342,600||INR 170,900|
|40 years||INR 459,750||INR 347,650||INR 188,350|
|50 years||INR 466,050||INR 362,250||INR 227,350|
Understanding LIC Single Premium Endowment Plan
Here’s an example to understand how this LIC one time investment plan works –
- Age of the insured – 30 years
- Term selected – 25 years
- Sum assured – INR 50,000
- Single premium paid – INR 23,545
If the insured survives the tenure, the sum assured of INR 50,000 would be paid with vested bonuses. On death during the policy term, INR 50,000 would be paid along with the vested bonuses accrued till the date of death.
How to buy LIC Single Premium Endowment Plan?
You can buy the LIC one time investment plan through an agent of the company or by visiting the company’s branch offices yourself. You would have to fill up an application form and submit the form with your documents and premium. The company would check the proposal form and issue the policy if you don’t present a very high death risk. Instead of buying offline, you can also choose to buy the LIC one time investment plan online through the official website of LIC.
Documents required for buying LIC Single Premium Endowment Plan
You would have to submit the following documents to buy this LIC one-time investment plan –
- Identity proof
- Address proof
- Age proof
- Proof of income
- Proposal form, filled and signed
How to make a claim under the LIC Single Premium Endowment Plan?
If the term of the plan comes to an end, the LIC one time investment plan is said to mature. On maturity, the maturity benefit is paid. To claim the maturity benefit you would have to fill and submit a claim discharge form along with the policy bond and identity proof. The company would then process the claim and pay it. In case of death of the insured, Claim Form 3783 should be filled and submitted by the nominee or the legal heirs of the insured. Along with the claim form, death certificate of the insured, policy bond and identity proof of the claimant would also be required. The company would then process the claim and pay it. You can also simplify the whole claim process if you claim through Turtlemint. If you have bought the policy through Turtlemint you can inform the company of your maturity or death claim. Turtlemint would then take the necessary steps to ensure that you get the settlement of your claims. To inform Turtlemint you just have to call 1800 266 0101 or send a mail to firstname.lastname@example.org and your claim would be registered.
Yes, if you avail a policy loan under the plan, you would have to pay interest on the amount of loan availed. The rate of interest depends on LIC’s policies and is fixed by the company at different time intervals.
The rate of bonus is not fixed. It entirely depends on the profits earned by LIC in a financial year. The rate, therefore, fluctuates every year and cannot be determined in advance.
The cooling-off period is the time allowed to a policyholder to cancel the plan after it has been bought. The period allowed under this LIC one time investment plan is 15 days from the policy issuance date. If the policy is cancelled within these 15 days, the premium would be refunded back.