LIC’s New Endowment Plus Plan

LIC’s New Endowment Plus Plan

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.

What are endowment plans?

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 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.

Features of LIC’s New Endowment Plus Plan

• Unit linked endowment assurance plan
  LIC’s new endowment plus allows you to invest in both equity and debt market through any of the four funds available for you to choose. Premium paid by you is invested in to funds after the deduction of premium allocation charges. However, the investment involves market risk as the fund value of your investment is dependent on market driven unit price or net asset value (NAV).
• Four fund choices for investment
  LIC’s new endowment plus plan offers four different investment funds for you to choose as per your investment objective and risk appetite. After the deduction of charges, premium paid will be utilised for buying fund units. Here are the four investment funds with different combination are available for choice.

Pattern of investment for discontinued policy fund

• Money market instruments : 0% to 40%
• Government securities : 60% to 100%

• Flexibility to choose premium amount and payment frequency
  LIC’s new endowment plan allows you to choose the premium amount. In case of regular payment of premium, frequency can be chosen by you as per your convenience – yearly, half-yearly, quarterly or monthly (through ECS mode only). The plan also allows you to invest through single premium.

Who should buy LIC’s New Endowment Plus Plan?

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.

1. Growth fund : If you are an aggressive investor with a long-term goal, growth fund is an ideal choice for capital appreciation.
2. Balanced fund : If you are moderately aggressive investor who aims to strike balance between income generation and capital appreciation, balanced fund is an ideal choice
3. Secured fund : If your risk appetite is moderate, secured fund can help you avail a steady income.
4. Bond fund : This fund can be a best choice for conservative investors with low risk appetite.

There is also an option to switch from one fund to another depending on your choice.

Eligibility criteria for LIC’s New Endowment Plus Plan

Let’s take a look at the eligibility requirement for LIC’s new endowment plus

• Eligibility requirement for premium amount vary as per the mode of payment chosen. And the sum assured depends on the premium amount. Here is the eligibility conditions for the premium payment.

• Sum assured

  10 times the annualised premium or 105% of the total premium paid – whichever is higher.

• Date of commencement of risk
  • In case the life assured is less than 8 years of age at the time of availing the policy, the risk cover will commence from one day before the completion of 2 years from the date of policy commencement or one day before the policy anniversary after life assured becomes 8 year old, whichever is earlier.
  • In case age of the life assured is 8 years and more, the risk cover will commence immediately.

Charges in LIC’s New Endowment Plus

Below are some of the major charges applicable for LIC’s new endowment plus.

• Premium allocation charges
  When you make a premium payment each time, premium allocation charges are first deducted before the money is invested. Here is percentage of charges depending on the policy year.

• Mortality charges
  Mortality charges are basically the cost to provide life cover. This is age specific and depends on the sum assured. These charges are deducted at the beginning of every month by cancelling appropriate number of units out of your investment fund.
  Here is a mortality charge for a healthy life at different age.

• Fund management charges
  These charges are charged on daily basis while computing net asset value (NAV). Charges are as under :

• Policy administration charges
  These charges are deducted at the beginning of every month by cancelling appropriate number of units out of your investment fund. Monthly charges are as follows

These charges are for annual mode of payment, charges need to be multiplied by below factors for other payment modes.

• Partial withdrawal charges
  Flat charges of INR. 100 is charged by cancelling appropriate number of units out of investment fund on the date of partial withdrawal.
• Discontinuance charges
  These are the charges levied at the time of discontinuation or surrender of policy. Charges are deducted by cancelling the appropriate number of units from investment fund. Here are the charges :

• Accidental death benefit charges (in case rider is availed)
  In case you avail an additional rider, then the cost of cover will be taken at the beginning of every month by cancelling appropriate number of units from the fund value which is at the rate of INR. 0.40 per thousand of rider’s sum assured for every policy year.

Documents required to buy LIC’s New Endowment Plus Plan

Here are the documents required for LIC’s new endowment plus :

• Age proof (Birth certificate/Voter ID/ Driving license/10th class marksheet/ Passport etc)
• Income proof
• Identity proof (PAN card/Aadhaar car/Driving license/Voter’s ID/Passport)
• Address proof (Passport/Ration card/Voter’s ID/Driving license/Latest utility bills)
• Passport size photographs

Scope of Coverage under LIC’s New Endowment Plus Plan

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.

Scenario 1
In case of demise of the life assured during the policy term, the policy pays out the death benefits to nominee/beneficiary.

• Death benefits
  • If life assured dies before the date of commencement of risk, fund value of his/her investment shall be payable.
  • If life assured dies after the date of commencement of risk, then basic sum assured or the fund value whichever is higher would be paid out to nominee/beneficiary.

Scenario 2
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.

• Survival benefits
  Fund value of investment at the end of policy term is paid out as survival benefit.

Scenario 3
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.

Exclusions for LIC’s New Endowment Plus Plan

• Suicide clause is not applicable to life assured whose age was less than 8 years at the time of buying or reviving the policy.
• Suicide clause : In case of death due to suicide, within 12 months from the date of commencement of policy or revival of the policy, beneficiary or nominee of the life assured will be entitled to fund value available on the death of life assured’s death.

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