India’s largest Insurance Company Life Insurance Corporation of India (LIC) has launched a scheme on 1st January 2014 like every year to woo its customer who looks for tax saving methods. A state-owned Company LIC sells policies of nearly 367.82 Lakh every year. With a slogan of “Yogakshemam Vahamtaha” meaning “Your Welfare is our Responsibility”. LIC is India’s most trusted Insurance Company.

LIC’s Single Premium Endowment Policy Isis a participating non-linked saving cum protection plan, where premium is paid in lump sum at the beginning of the policy. At the end of the policy term, the policyholder will be paid the sum assured + Bonus + Final additional bonus. Only sum assured will be paid to the nominee in case of the death of the holder.

Key features of the LIC Single Premium Endowment Policy

Minimum entry age: 3 months completed.
Maximum age:    65 years.
Maturity age of the customer:  Minimum: 18 years, Maximum: 75 years.
Policy term:  Minimum: 10 years,  Maximum: 25 years.
Premium paying way: single premium only.
Sum assured: Maximum: 50,000 INR, Minimum: No limit.

Sum Assured Rebates

Sum Assured                                Rebates

Rs. 50,000/- to Rs. 95,000/      –   NIL
Rs. 1,00,000/- to Rs.1,95,000/  – 18.00% Basic Sum Assured
Rs. 2,00,000/- to Rs. 2,95,000/ – 25% Basic Sum Assured
Rs. 3,00,000/- and above                 30.00 % Basic Sum Assured

Benefits of LIC Single Premium Endowment Policy

Maturity Benefits: At the end of the policy term the policy holder will get Maturity benefit =Sum Assured + vested Simple Reversionary Bonuses + FAB, if any.
Death Benefits: Life Assured After or on the Commencement of risk in the policy period, the nominee will receive Death Benefit = Sum Assured + vested Simple Reversionary Bonuses + FAB, if any.
While the death before the commencement of the risk during the policy term, the nominee will receive Death Benefit = Return of Single premium – service tax and extra premium, if any, without interest.

Other Clauses of Single Premium Endowment Policy
  • If a person is below the age of 8 years the commencement of risk will start after 2 years from the date of commencement or it will commence when the person attains the age of 8 years.
  • The policy allows the owner to surrender any instance during the policy period with two conditions.
  • If the holder surrenders during the first year, he will get 70% of the premium amount- service tax and extra premium, if any.
  • If the holder surrenders aftermath, then he will get 90% of the premium – service tax and extra premium.
  • In suicidal case, if the assured has committed suicide before 1 year from the commencement of the risk, he shall be returned 90% of the premium excluding taxes.
  • If the policy owner is not satisfied with the policy, he can return the policy within 15 days from the starting of the policy.
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Our Suggestion for the Plan
If you are planning to invest in this plan, be careful while calculating the profit you will get. The expected return this policy offers you is between 4% – 6%, which is quite less with respect to the premium invested.