Investment Plans 1078 views July 25, 2020

LIC New Endowment Plan

LIC is one of the trusted insurance companies that is held and controlled by the government of India. On the other hand, it has a variety of insurance plans that will help you to cover the risks and save some money for the future. One such plan is LIC New Endowment Plan that will help you to accumulate funds for your future. This insurance plan has death benefits and maturity benefits as well. You can add an accidental death rider and permanent disability rider to this policy. The company also allows you to take a loan against the policy in case of an emergency. So, let’s explore the key features of this endowment plan.

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Key Features of New Endowment Plan

  1. Flexibility of choosing the Sum Assured.
  2. Flexibility of choosing the term of the policy.
  3. Enjoy Death Benefits and Maturity Benefits in this policy.
  4. There is no limit for the maximum sum assured.
  5. You can also add riders to this endowment policy.
  6. Get a grace period if in case you didn’t pay the premium amount on time.
  7. Enjoy tax deductions under section 80C of the Income Tax Act 1961.

Benefits of New Endowment Plan

Now, you must explore all the key benefits of this plan and see how it will help you in the future. There are a lot of benefits available in this plan.

Death Benefits

In case of unfortunate death of the insured the nominee is entitled to receive the death benefits that will include Sum Assured on death and Simple revisionary bonus and final additional bonus. The value of the Death Benefit will be the highest of the following:-

  1. Basic Sum Assured
  2. 7 times of the annualized premium

The death benefit will never be less than 105% of the total premiums paid up to the time of the death.

Maturity Benefits

If the insured successfully survives the policy term then he is entitled to receive the following:-

  1. Sum Assured on Maturity
  2. Simple Revisionary Bonuses
  3. Final Additional Bonus

Bonuses

The value of the benefits will increase through revisionary bonuses and final additional bonus. These benefits will increase once the company generates profits in a year.

Option to Take Death Benefits in Instalments

You are allowed to take the death benefits in instalments in the LIC New Endowment Plan. The time periods available to take the death benefits are 5 years, 10 years, and 15 years. You can take the death benefits in instalments instead of taking the lump sum amount. Here are the different minimum amounts for different payment modes.

  1. Monthly Rs.5000
  2. Quarterly Rs.15000
  3. Half-Yearly Rs.25000
  4. Yearly Rs.50000

Various Modes for Paying the Premium

LIC gives you the freedom to pay the amount of premium on a yearly, half-yearly, quarterly, and monthly basis. You can use the NACH facility to make the payment of your premium amount.

Grace Period

If in case you miss the payment of the premium on the due date then the company will give you a grace period of 30 days to make the payment. A grace period of 30 days is only allowed if you are paying the premium yearly, quarterly, and half-yearly. If you are paying the premium monthly then you will get a grace period of 15 days.

Revival Benefit

You can revive the policy if it is lapsed due to the non-payment of the premium within the grace period. The company gives you a time of 5 consecutive years to make the payment of all the arrears including the interest and revive the lapsed plan.

If you discontinue the payment of the premium after paying it regularly for 2 years then you will get the paid-up value. It simply means that your death benefits and the maturity benefits will be reduced if you discontinue the payment of the premiums after 2 years of the policy term.

Surrender Benefits

You can surrender this policy in case of an emergency and take the surrender value. But the company allows you to surrender the policy only if you have paid all the premiums for 2 years regularly. So, surrendering the policy during the policy term is allowed in this endowment plan but on the condition that you have paid all the premiums for 2 policy years.

Loan Against Policy

If you don’t want to surrender the policy and still need some funds then you can take a loan against the policy from the company. But you are allowed to take a loan against the policy only if you have paid all the premiums for 2 policy years. The company will charge the applicable interest on the loan amount.

Free-Look Period

If in case you don’t find this policy interesting then LIC gives you a time of 15 days to return the policy. This is known as the free look period. You will get a free-look period of 30 days if you have purchased the plan online.

Add-on Benefits

There are some optional benefits in this plan that you can add to this plan. These benefits will cover some extra risks that are related to your life. You can explore the riders that you can add to this plan.

  1. Accidental Death and Disability Benefit Rider
  2. Accident Death Rider
  3. New Term Assurance Rider
  4. New Critical Illness Benefit Rider
  5. Premium Waiver Benefit Rider

LIC New Endowment Plan Eligibility Criteria

ParticularsDetails
Minimum Age of Entry8 Years
Maximum Age of Entry55 Years
Maximum Age of Maturity75 Years
Minimum Policy Term12 Years
Maximum Policy Term35 Years
Minimum Amount of the Sum AssuredRs.100000
Maximum Amount of the Sum AssuredNo Limit

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