lic single premium endowment plan

LIC’s Single Premium Endowment Plan / Policy is a LIC’s Best Selling Single Premium Participating  non-linked savings cum protection Endowment Plan. It is a Traditional Endowment Plan which provide death and maturity benefits along with the bonus facilities to the insured. The policyholder has to pay the premium in starting in a lump sum amount.

LIC’s Single Premium Endowment Plan / Policy also provides loan to the policyholder after the completion of one year.

Benefits :-

Death Benefits :

  • The return of single premium ( excluding service tax and extra premium, if any, without interest) will be paid to the nominee, if the policyholder dies during the policy term before the commencement of risk.
  •  Sum Assured plus vested Simple Reversionary Bonuses and Final Additional Bonus, if any, will be paid to the nominee, if the policyholder dies during the policy term after the date of commencement of risk. 

Maturity Benefits :

  • If the policyholder survives till the end date of the policy tenure, he will get the Sum Assured plus Simple Reversionary Bonus and Final Additional Bonus, if any, as Maturity Benefiris 
  • As reward or appreciation to the insured, Final Additional Bonus is to be declared by the company if the policyholder has paid all premiums on time.
  • Simple Reversionary Bonus is declared as per the experience of corporation at the end of each year.

Other Benefits :

  • The insured will be eligible to apply for the loan after a year.
  • There are income tax benefits on premium paid and claims received as per Section 80C and Section 10(10D) of Income Tax Act .
  • In this policy there is a Free Look Period given to the policyholder. If he wants to cancel the policy, he can do it in the period of 15 days (Free Look Period) only if there’s no claim taken for the policy.
  • There is a guaranteed surrender value. If the insured surrenders within a year, he’ll receive 70% of premium paid and if he surrenders after the completion of a year, he’ll receive 90% of premium paid. He’ll also be eligible to receive vested Reversionary Bonus in a certain amount.

Let’s understand this with the help of an example: 

Ram wants to buy Single Premium Endowment Plan. The Sum Assured, Policy Term, Age at Entry and Amount of Single Premium will be the in all 3 cases as we’ve taken one fix. There will be three cases as follow. 

Sum Assured : 3,00,000

Policy Term : 20 years 

Age at Entry : 25 Years

Amount of Single Premium : 1,75,800

Death Benefit :

Case 1.

Sum Assured + Simple Reversionary Bonus+ Final Additional Bonus will be paid, in case Ram dies 2 years after the entry policy date. 

Reversionary Bonus : We assume that here Simple Reversionary Bonus is 40 per 1,000 Sum Assured for 2 Years. It is declared every year and can be more or less. As per this value it will be :

Rs. 40 × 300 × 2 =  Rs. 24,000

Final Additional Bonus : there will not be any because usually Final Additional Bonus is declared after a longer time than this.

So, the total amount that nominee will receive :

Rs. 3,00,000 + Rs. 24,000 = Rs. 3,24,000

Case 2. 

Sum Assured + Simple Reversionary Bonus + Final Additional Bonus will be paid to the nominee, in case Ram dies after 10 Years of the entry date of policy.

Reversionary Bonus : Again, the Simple Reversionary Bonus will be the i.e. Rs. 40 per 1,000 Sum Assured for 10 Years. Now it will be :

Rs. 40 × 300 × 10 = Rs. 1,20,000

Final Additional Bonus : Now, we assume that a one time Final Additional Bonus of Rs. 15 per 1,000 Sum Assured has given. In real it may be more or less. It’s just an assumption. In that case it will be:

Rs. 15 × 300 = Rs. 4,500

So, the total amount that nominee will receive :

Rs. 3,00,000 + Rs. 1,20,000 + Rs. 4,500 = Rs. 4,24,500

Maturity Benefits :

Case 3. 

A total amount of Sum Assured + Simple Reversionary Bonus + Final Additional Bonus will be paid to Ram, in case he survives till the end of maturity of the policy.

Reversionary Bonus : Here we again assumed that the Reversionary Bonus is 40 per 1,000 Sum Assured amount  for 20 Years. So, it will be:

Rs. 40 × 300 × 20 = Rs. 2,40,000

Final Additional Bonus : Again, we assume that a one time Final Additional Bonus of Rs. 15 per 1,000 Sum Assured has given. It will be :

Rs. 15 × 300 = Rs. 4,500

So now, the total amount that Ram will receive :

Rs. 3,00,000 + Rs. 2,40,000 + Rs. 4,500 = Rs. 5,44,500.

Calculate Your Premium Click On This Link :- https://ebiz.licindia.in/D2CPM/#qni/basicinfo 

For more details or more example in another way click on this link :-                               https://www.myinsuranceclub.com/life-insurance/companies/lic-of-india/single-premium-endowment-plan                  https://www.policybazaar.com/insurance-companies/lic-india-investment-plans/single-premium-endowment-plan/   https://www.policyx.com/life-insurance/lic-of-india/single-premium-endowment.php 

Click here to find LIC’s Jeevan Anand Plan :- lics-new-jeevan-anand-plan

LIC's Single Premium Endowment Plan Key Features

Documents required for buying the LIC Single Premium Endowment Plan :

  • Filled Application Form / Proposal Form
  • Address Proof
  • Identify Proof ( Aadhar Card, Passport, Pan Card)
  • Other KYC Documents

Medical examination maybe required in some cases.