LIC Limited Premium Endowment Plan - Table No. 830:
LIC’s Limited Premium Endowment Plan is a participating endowment plan which offers both investment and insurance benefits. Being a limited-pay policy, the premium payment term is less than the policy term. The customer has the option of selecting of a policy term of 12, 16 or 21 years - but needs to pay premiums for 8 or 9 years depending on the choice made at the beginning of the policy. We will understand the workings of this plan with the help of a few examples.
| Launch Date | 01st December 2014 |
| Plan Details | Table No. 830 |
| Policy Type | Endowment |
| UIN | 512N293V01 |
LIC Limited Premium Endowment Policy (Plan No:830):
LIC’s Limited premium endowment policy (Plan No: 830) is a non-linked guaranteed life insurance plan which provides protection with investment. This plan is having fixed premium paying terms of 8 & 9 years and fixed policy terms 12, 16 & 21 years which allows the policyholder to plan for financial requirements by paying less number of years and secure life and receive maturity at the later stage.
This plan may be recommended for everyone because of the following reasons.
- A sound combination of Life insurance and investment.
- Less number of premium paying term than policy term.
- Eligible for bonus and Final Addition bonus declared by LIC.
- Comparatively High Bonus
- Double Accidental benefit with the rider.
- Tax saving on premium paid.
- Tax-Free maturity amount.
Plan Parameters
| Age of Entry | 18 to 62 years |
|---|---|
| Premium Paying Mode | Yearly, Half Yearly, Quarterly, Monthly (ECS Only) |
| Premium Payment Term | 8 or 9 Years (Fixed) |
| Policy Term | 12, 16 and 21 Years (Fixed) |
| Basic Sum Assured | 300000 and above ( in multiple of 10000) |
| Policy Revival | within 2 year |
| Rebate Premiums | 2% on yearly, 1% on Half Yearly, Nil on Quarterly |
| Loan | After 2 years |
| Surrender | After 2 years of full premium payment |
| Guaranteed Surrender Value | From 30% to Maximum 80% of the total premium paid |
How does LIC Limited Premium Endowment Policy work?
When buying the LIC Limited Premium Endowment Plan, the customer has to decide on the following:
- Basic Sum Assured - this is the amount of cover that you want. You can choose a minimum amount of Rs. 3,00,000. There is no upper limit.
- Policy Term - this is the period for which you wish to have the cover. The term can be 12, 16 or 21 years.
- Premium Payment Term - you need to pay premiums for this many years. You can choose between 8 or 9 years.
- Riders selected - you will have to pay an additional premium for the same. You have the choice of 2 riders:
- Accidental Death & Disability Benefit Rider
- New Term Assurance Rider
Benefits in the LIC Limited Premium Endowment Plan
Death Benefit in LIC Limited Premium Endowment Plan
In case of the death of the policyholder before the end of the policy term, the nominee will receive all of the following:
The Sum Assured on Death mentioned above is defined as the highest of the following:
Maturity Benefit in LIC Limited Premium Endowment Plan
At the end of the policy term, the policyholder will receive the following:
In case of the death of the policyholder before the end of the policy term, the nominee will receive all of the following:
- “Sum Assured on Death” - this is defined below
- Simple Reversionary Bonus
- Final Addition Bonus
The Sum Assured on Death mentioned above is defined as the highest of the following:
- 10 times the Annualised Premium
- 125% of Basic Sum Assured
- 105% of all premiums paid
Maturity Benefit in LIC Limited Premium Endowment Plan
At the end of the policy term, the policyholder will receive the following:
- Basic Sum Assured
- Simple Reversionary Bonus which has accrued
- Final Addition Bonus if declared
Click here to Know Bonus Rates of LIC Limited Premium Endowment Plan
LIC Limited Premium Endowment Plan with an Example:
We have Raghav Saxena, age 30 who wishes to buy this plan. He goes in for the plan with the following:
Sum Assured - Rs. 3,00,000
Term - 12 years
Premium Payment Term = 9 years
Riders - None selected
Based on these parameters, his annual premium is Rs. 29,944 + Taxes = Rs. 31,291. Here we have assumed the current tax rate of 4.5%.
Death Benefit
Scenario 1 : If Raghav dies after 4 policy years.
Now Sum Assured on Death is the highest of the following:
His nominee gets the sum of the following:
His nominee will get Rs. 3,75,000 + Rs. 48,000 = Rs. 4,23,000
Scenario 2 : If Raghav dies after 8 policy years
Now Sum Assured on Death is the highest of the following:
Hence the Sum Assured on Death = Rs. 3,75,000
His nominee gets the sum of the following:
Here we have assumed the Simple Reversionary Bonus Rate of Rs. 40 per 1,000 Sum Assured. So the bonus in a year will be 40 x 3,00,000 / 1,000 = Rs. 12,000. Please keep in mind that is an assumption - the actual bonus rates will only be known when LIC declares it every year. The Final Addition Bonus is also an assumption.
His nominee will get Rs. 3,75,000 + Rs. 96,000 = Rs. 4,71,000
Maturity Benefit
Scenario 3 : If Raghav survives till the end of the policy term of 12 years - He will get the sum of the following:
Basic Sum Assured = Rs. 3,00,000
Simple Reversionary Bonus = Rs. 1,44,000
Final Addition Bonus = Nil
Here we have assumed the Simple Reversionary Bonus Rate of Rs. 40 per 1,000 Sum Assured. So the bonus in a year will be 40 x 3,00,000 / 1,000 = Rs. 12,000. Please keep in mind that is an assumption - the actual bonus rates will only be known when LIC declares it every year. The Final Addition Bonus is also an assumption.
On Maturity Raghav will get = Rs. 3,00,000 + Rs. 1,44,000 = Rs. 4,44,000
Sum Assured - Rs. 3,00,000
Term - 12 years
Premium Payment Term = 9 years
Riders - None selected
Based on these parameters, his annual premium is Rs. 29,944 + Taxes = Rs. 31,291. Here we have assumed the current tax rate of 4.5%.
Death Benefit
Scenario 1 : If Raghav dies after 4 policy years.
Now Sum Assured on Death is the highest of the following:
- 10 times the Annualised Premium = 10 x 29,944 = Rs. 2,99,440
- 125% of Basic Sum Assured = Rs. 1.25 x 3,00,000 = 3,75,000
- 105% of all premiums paid = 105% x 4 x 29,944 = Rs. 1,25,765
His nominee gets the sum of the following:
- Sum Assured on Death = Rs. 3,75,000
- Simple Reversionary Bonus = 4 x 12,000 = Rs. 48,000
- Final Addition Bonus = Nil
His nominee will get Rs. 3,75,000 + Rs. 48,000 = Rs. 4,23,000
Scenario 2 : If Raghav dies after 8 policy years
Now Sum Assured on Death is the highest of the following:
- 10 times the Annualised Premium = 10 x 29,944 = Rs. 2,99,440
- 125% of Basic Sum Assured = Rs. 1.25 x 3,00,000 = 3,75,000
- 105% of all premiums paid = 105% x 4 x 29,944 = Rs. 1,25,765
Hence the Sum Assured on Death = Rs. 3,75,000
His nominee gets the sum of the following:
- Sum Assured on Death = Rs. 3,75,000
- Simple Reversionary Bonus = 8 x 12,000 = Rs. 96,000
- Final Addition Bonus = Nil
Here we have assumed the Simple Reversionary Bonus Rate of Rs. 40 per 1,000 Sum Assured. So the bonus in a year will be 40 x 3,00,000 / 1,000 = Rs. 12,000. Please keep in mind that is an assumption - the actual bonus rates will only be known when LIC declares it every year. The Final Addition Bonus is also an assumption.
His nominee will get Rs. 3,75,000 + Rs. 96,000 = Rs. 4,71,000
Maturity Benefit
Scenario 3 : If Raghav survives till the end of the policy term of 12 years - He will get the sum of the following:
Basic Sum Assured = Rs. 3,00,000
Simple Reversionary Bonus = Rs. 1,44,000
Final Addition Bonus = Nil
Here we have assumed the Simple Reversionary Bonus Rate of Rs. 40 per 1,000 Sum Assured. So the bonus in a year will be 40 x 3,00,000 / 1,000 = Rs. 12,000. Please keep in mind that is an assumption - the actual bonus rates will only be known when LIC declares it every year. The Final Addition Bonus is also an assumption.
On Maturity Raghav will get = Rs. 3,00,000 + Rs. 1,44,000 = Rs. 4,44,000
Sample Premium Illustration of LIC Limited Premium Endowment Policy:
Here are the sample tabular premium rates (inclusive of taxes) payable by a healthy, non-tobacco user male for different combinations of age, Sum Assured and policy term. We have gone with the current applicable tax rate of 4.5% for such policies.
Policy Term: 12,16,21 (years)
Premium Paying Term: 8 (year)
Sum Assured: Rs. 3,00,000
Age: 25,30,40 (years)
Premium Paying Term: 8 (year)
Sum Assured: Rs. 3,00,000
Age: 25,30,40 (years)
Tax Implications in LIC Limited Premium Endowment Plan:
- Premiums – The premiums paid for the plan are exempt from taxation under Section 80C of the Income Tax Act.
- Maturity Claim – Maturity amount is exempted from tax under Sec 10(10D) of the Income Tax Act
- Death Claim – Death claims received under the plan are free from taxation under Section 10(10D) of the Income Tax Act
Other Benefits in the LIC Limited Premium Endowment Policy:
- Free-look Period – If the policyholder is not happy with the plan, he can cancel the policy within 15 days of receiving the policy bond. This period is called the free-look period. Upon cancellation, the premium paid net of any applicable expenses would be returned.
- Grace Period - In case of Yearly, Half-yearly and Quarterly premium payment mode you have a grace period of 30 days from the premium due date. In case of monthly premium payment mode, the grace period is of 15 days.
- Loan - You can avail a loan against this plan once it acquires a Surrender Value
- Surrender Value - If you surrender the plan anytime before paying 3 years of premiums, you will not be paid anything back. In case you have paid at least 3 years premiums, the policy will acquire a Surrender Value. Check the Surrender Value of LIC Limited Premium Endowment Plan.
- Exclusions in case of Suicide - the following 2 conditions apply:
- In case the policyholder commits suicide within 12 months of the risk commencement date, the maximum claim can only be to the extent of 80% of basic premium (excludes taxes, extra premium, rider premium except for term assurance rider).
- In case the policyholder commits suicide within 12 months of reviving the policy, the maximum claim can only be to the extent of 80% of basic premium (excludes taxes, extra premium, rider premium except for term assurance rider) or the Surrender Value shall be payable.
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