An endowment life insurance policy is a policy that couples the benefits of the concept of life insurance with the concept of savings. These policies, unlike pure term insurance, provide death and maturity benefits. Many of these LIC policies also come with surrender values, which is a certain percentage of the premiums paid, and paid up values. The death benefits with these policies is the sum assured under the policy which can start from Rs. 50,000 and go on to any amount, depending on approval from the insurance underwriters. These policy can be enhanced using various riders that provide additional benefits if the policyholder passes away or is left disabled as a result of an unfortunate incident. Some of the policies that come in the purview of an endowment plan offer the option to pay the premiums in monthly instalments and some even offer discounts on premiums that are paid annually.
Endowment plans from LIC
The endowment plans offered by LIC offers some additional benefits too. For example, some plans participate in company profits while other generate savings through investments in the equity markets.
Single Premium Endowment Plan:
This plan offers no limits on the maximum sum assured and can be taken by paying the entire premium in one lump sum. Some of its other features are:
- The minimum sum assured is Rs. 50,000 and the maximum is unlimited.
- The policy offers maturity benefits and a guaranteed surrender value.
- It can be taken for periods ranging from 10 years to 25 years.
- The minimum age of entry for this plan is 90 days and the maximum age is 65 years.
- This policy can also be used to secure a loan.
New Endowment Plan:
The New Endowment Plans is a
- The minimum and maximum entry ages for this plan are 8 years and 55 years respectively.
- There is no limit on the maximum sum assured and the minim sum assured is Rs 1 lakh.
- The plan comes with tenures ranging from 12 years to 35 years.
- The premiums can be paid every month, quarter, 6 months or every year.
New Jeevan Anand:
- The maximum sum assured under this plan has no limits.
- The entry age for this policy ranges from 18 years to 50 years.
- The tenures available range from 15 years to 35 years.
- The cover under this policy continues till the age of 75 years.
- The cover can also be enhanced using the Accidental Death and Disability rider.
- The policy offers no limits on the maximum sum assured.
- It also offers Reversionary and Final Additional bonuses that are paid when the policy matures.
- The policy can be coupled with an accidental death and disability and term assurance riders.
- The death benefit provided by this policy will never be less than 105% of the premiums paid.
- If premiums are paid every year via the annual mode then the policy provides a discount of 2% on the premiums paid.
Limited Premium Endowment Plan:
- The minimum sum assured under this scheme is Rs. 3 lakhs and there is no limit on the maximum sum assured.
- There are 3 tenures available for the policies, 12 years, 16 years and 21 years.
- The premium paying term is either 8 years or 9 years.
- The plan offers both death and maturity benefits too.
The Jeevan Lakshya is a participating endowment policy that has been designed keeping children in mind. Some of the features of this policy are:
- The minimum sum assured under this policy is Rs. 1 lakh and there is no limit in the maximum.
- The tenure of the policy can be anything from 13 years to 25 years.
- The premiums can either be paid annually, half-yearly, quarterly or monthly.
- If premiums are paid annual or half-yearly then they are eligible for discounts of 2% and 1% respectively.
New Endowment Plus:
The New Endowment Plus is a ULIP (Unit Linked Insurance Plan) that invests the policyholder’s money in debt and equity markets to generate returns. Its other features include:
- A choice of various risk profiles ranging from low risk to medium and high risks.
- The minimum premium that can be paid towards this policy is Rs. 20,000 in a year and there is no limit on the maximum premium.
- The entry age for this plan ranges from 90 days to 50 years.
- The policy can also be taken for a tenure ranging from 10 years to 20 years.
- Policyholder also get the option to switch between various funds.
Apart from all the features that these policies provide, one big advantage of taking an insurance plan from LIC is that they have a really good claims settlement ratio.
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GST of 18% is applicable on life insurance effective from the 1st of July, 2017