Life Insurance Corporation of India, founded in the year 1956 is the only public sector life insurance company present in India. Headquartered in Mumbai, LIC is the largest life insurance market player that has its presence in every corner of the country with over 2000 and more branches. LIC has wide range of life insurance plans in its offerings starting from pure protection plans to savings and investment plans for every type of customer need. With the highest brand equity, LIC has been serving the large customer base with various new offerings from time to time. LIC’s new Endowment Plus is one such innovative offering.
Endowment plans are savings cum protection plans. These plans help you save regularly for a certain period of time. For the regular investments that you make, endowment plans not only provide life protection (i.e. fixed sum assured in the event of death) but also helps you avail lump sum benefit on maturity. The benefit so received can be used to meet your long-term goals such as children’s education, marriage or for retirement etc. Endowment plans can be with profit or without profit plans. These plans also come in both non-ULIP and ULIP (Unit Linked Insurance Plans) variants. Dual benefit of savings and protection is the key element of any endowment plan.
LIC’s New Endowment Plus is a non-participating unit linked insurance plan. This ULIP policy is launched by LIC in August 2015 post new product regulations issued by the Insurance regulator, IRDAI (Insurance Regulatory and Development Authority of India). The scheme allows you to invest in equity and debt in four different combination of fund types to choose from. Premiums paid are invested in these funds as per your choice and risk appetite. The fund value of your investment is paid back on maturity as a survival/maturity benefit. In case of an unfortunate event during the policy term, death benefits would be paid out to nominee/beneficiary. Let’s know the plan in detail.
|Fund Type||Investment into listed equity shares||Short-term/money market investments||Investment in government securities or corporate debt|
|Growth fund||40% to 80%||Not more than 40%||Not less than 20%|
|Balanced fund||30% to 70%||Not more than 40%||Not less than 30%|
|Secured Fund||15% to 55%||Not more than 40%||Not less than 45%|
|Bond Fund||Nil||Not more than 40%||Not less than 60%|
Pattern of investment for discontinued policy fund
LIC’s new endowment plus can be bought by any type of investor seeking a dual benefit of long-term savings and protection. With various fund option, investor of every risk profile can customise their choices and invest accordingly.
Let’s take a look at suitability of investment funds.
There is also an option to switch from one fund to another depending on your choice.
Let’s take a look at the eligibility requirement for LIC’s new endowment plus
|Entry age||90 days (completed)||50 years (nearest birthday)|
|Maturity age||18 years (completed)||60 years (nearest birthday|
|Policy term||10 years||20 years|
|Premium payment term||Same as policy term|
|Eligibility condition for mode of premium||Minimum (in INR.)||Maximum (in INR.)|
|Monthly (through ECS)||3000|
10 times the annualised premium or 105% of the total premium paid – whichever is higher.
Below are some of the major charges applicable for LIC’s new endowment plus.
|Policy Year||Premium allocation charges|
|1st year||7.5% of premium|
|2nd year to 5th year||5% of premium|
|6th year onwards||3% of premium|
|Charges per annum per INR. 1000||INR. 1.23||INR. 1.60||INR.3.59||INR. 6.18|
|Fund Type||Fund management charges|
|All four types of funds (Bond fund, Secured fund, Balanced fund and Growth fund||0.7% p.a|
|Discontinued fund||0.5% p.a|
|Policy year||Policy administration charges|
|1st year||(0.35%*instalment premium) or INR. 100, whichever is lower|
|2nd year||(0.25%*instalment premium) or INR. 70, whichever is lower|
|3rd year||2nd year charge*1.03|
|4th year||3rd year charge* 1.03|
|5th year||4th year charge* 1.03|
|6th year onwards||INR. 52.17 In 6th year and yearly increase at 3% thereon.|
These charges are for annual mode of payment, charges need to be multiplied by below factors for other payment modes.
|Premium payment mode||Half-yearly||Quarterly||Monthly|
|Year of policy discontinuation/surrender||Charges for policies with annual premium of INR. 25,000 and below||Charges for policies with annual premium of more than INR. 25,000|
|1||Lower of 15% * (annualised premium or fund value) subjected to maximum of INR. 2,500||Lower of 6% * (annualised premium or fund value) subjected to maximum of INR. 6,000|
|2||Lower of 7.5% * (annualised premium or fund value) subjected to maximum of INR. 1,750||Lower of 4% * (annualised premium or fund value) subjected to maximum of INR. 5,000|
|3||Lower of 5% * (annualised premium or fund value) subjected to maximum of INR. 1,250||Lower of 3% * (annualised premium or fund value) subjected to maximum of INR. 4,000|
|4||Lower of 3% * (annualised premium or fund value) subjected to maximum of INR. 750||Lower of 2% * (annualised premium or fund value) subjected to maximum of INR. 2,000|
|5th year onwards||Nil||Nil|
Here are the documents required for LIC’s new endowment plus :
As LIC’s new endowment plus is dual benefit plan, both life cover and survival benefit is offered. Let’s take a look at all the scenarios to understand the scope of coverage.
In case of demise of the life assured during the policy term, the policy pays out the death benefits to nominee/beneficiary.
In case life assured survives through the policy term, maturity benefit or the survival benefit would be paid out to him/her at the end of the policy term.
If life assured has availed an additional optional rider i.e. LIC’s linked accidental benefit rider, additional sum assured availed by the life assured would be paid out only during an accidental death.
Yes, there is a grace period of 30 days given for yearly, half-yearly or quarterly mode of premium payment. The plan provides 15 days grace period for monthly (via Electronic Clearing System) premium payments.
Yes. You can! If you are not satisfied with the terms of the policy after buying it, you can cancel the policy within 15 days of free look period. Amount that includes value of fund units, unallocated premium with charges deducted will be refunded after deducting stamp duty and medical examination charges incurred, if any.
Yes, LIC’s new endowment plus plan allows you to surrender your anytime during the policy term with certain conditions.