LIC Limited Premium Endowment Plan

LIC Limited Premium Endowment Plan- An Overview

LIC Limited Premium Endowment Plan offers a unique combination of life protection and savings benefits with a short premium payment term of 8 or 9 years. In the event of the policyholder's unfortunate demise, the plan provides a death benefit to the nominee. Additionally, if the policyholder survives the policy term, they receive the maturity benefit.

The plan however, is no longer available for sale as it was withdrawn by the LIC of India in 2020

LIC Limited Premium Endowment Plan Features

• Premium needs to be paid only for 8 or 9 years while the policy continues for the entire policy tenure of 12, 16, or 21 years as chosen.

• On survival until the policy tenure, the maturity benefit is paid to the policyholder, and the policy terminates.

• Suppose the life insured dies within the policy tenure. In that case, the death benefit is paid to the nominee, and the policy terminates.

• There is additional coverage which can be opted for an additional premium.

Eligibility Criteria of LIC Limited Premium Endowment Plan

LIC Limited Premium Endowment Plan Benefits

• Bonus: This policy participates in the company's bonuses. The policy accrued Simple Reversionary Bonus and Final Addition Bonus, if any.

• Maturity Benefit: On survival till the end of the policy tenure, the Basic Sum Assured + accrued Bonuses are paid to the policyholder as Maturity Benefit, and the policy terminates

• Death Benefit: If the Life Insured dies within the policy tenure, then the Sum Assured on Death + accrued Bonuses would be payable to the nominee

  Sum Assured on Death is defined as higher of:

  • Guaranteed Sum Assured on Maturity or Basic Sum Assured

  • Absolute sum assured to be paid on death, i.e., 125% of Basic Sum Assured.

  • 10 times of annualized premium

  • Subject to a minimum of 105% of the total premiums paid as on date of death

• Additional Rider available: LIC's Accidental Death or Disability Benefit Rider and LIC's New Term Assurance Rider.

• Discount: There is a mode discount for yearly and half-yearly premium payments and for higher sum assured chosen.

• Tax Benefits: Income tax benefit on the premium paid as per Section 80C and on the claims received as per Section 10(10D) of the Income Tax Act.

Sample Premium Illustration of LIC Limited Premium Endowment Plan

The annual premium is mentioned in Rupees for a Sum Assured of Rs 5 Lakhs and a Premium Paying Term of 8 Years. Basic Premium is mentioned below (Tax not included).

Policy Details of LIC Limited Premium Endowment Plan

• Grace Period: 30 30-day grace period is allowed for premium payment. The policy lapses if the policyholder fails to make payment within the grace period. However, there are 2 years from the due date of the first unpaid premium for the policy to be revived.

• Free Look Period: If you are not pleased with the coverage and terms and conditions of the policy, you can cancel it within 15 days of receiving the policy documents, provided there has been no claim.

• Policy Termination or Surrender Benefit: The policy acquires a surrender value after 2 policy years and can also avail a loan.

Exclusions

In case of suicide committed within 12 months of policy inception, only 80% of premiums paid are returned to the nominee. In case of suicide within 12 months of revival, higher than 80% of premiums paid or acquired Surrender Value is paid.