LIC Special Endowment Plan; Insurance along with returns

 

Introduction:

The Single Premium Endowment Plan from LIC is a non-linked, participating individual life assurance savings plan that combines savings and protection elements in an enticing way. When the policy is first purchased, the premium is paid in full. Through the provision of a lump sum payment at the conclusion of the chosen policy period in the event of the insured's survival, this combination offers financial protection against death during the policy term.

Through its credit facility, this plan also addresses the issue of liquidity.

 

1. Benefits/ Advantages:

Amount on Death:

a) In the event of death of policyholder during the policy's term but prior to the start of the risk, the single premium (less any applicable taxes, extra premiums, and rider premiums) will be refunded without interest.

b) In the event of death during the policy's term following the start of the risk:

Sum Assured plus vested Simple Reversionary Bonuses and, if applicable, the Final Additional Bonus. Specifically, "Sum Assured on Death" is defined as the greater of the Basic Sum Assured or 1.25 times the Single premium (excluding taxes, extra premium and rider premiums, if any).

B. Maturity Advantage:

The sum assured at maturity, vested simple reversionary bonuses, and any final additional bonuses that may have accrued will all be paid if the life assured survives the insurance period. where the Basic Sum Assured is equal to the "Sum Assured on Maturity."

C. Profit-sharing participation

The policy will share in the corporation's profits and be eligible to receive Simple Reversionary Bonuses determined by the corporation's performance. On the terms and conditions that may be announced by the Corporation from time to time, Final (Additional) Bonus may also be declared under the policy in the year that the policy results in a claim, whether through death or maturity. According to the guidelines set forth in the LIC Act of 1956, the Central Government shall have final approval of the actual allocation to policyholders from the surplus resulting from the actuarial study.

2. Conditions for Eligibility and Additional Restrictions:

a) Minimum age required for purchasing this policy- 90-day (completed)

b) Maximum age for purchasing this policy- 65 years (nearest birthday)

c) 75 years is the maximum age of maturity (nearest birthday)

d) Ten years minimum insurance term

e) 18 years old minimum age of maturity (completed)

g) 25-year maximum policy duration

 

g) Rs.50,000  will be the Minimum Sum Assured

h) The maximum sum promised will only be in multiples of 5,000. There is no restriction

i)  Single Premium only for Premium payment mode

Beginning date of the risk:

In case the age of Life Assured at entrance is less than 8 years, risk under this plan will commence either 2 years from the date of commencement or from the policy anniversary coinciding with or immediately following the attainment of 8 years of age, whichever is sooner. For those who are 8 years old or older, the risk will start right away.

3. Other Choices/ Riders obtainable

I. Rider Advantages:

The following two extra riders are available under this plan by payment of additional price.

a.       Accidental Disability and Death Benefit Rider for LIC (UIN: 512B209V02)

This rider is only accessible at the beginning of the policy. If this rider is chosen, the Accident Benefit Rider Sum Assured will be paid out in one lump sum in the event of an accidental death. The Accident Benefit Sum Assured will be paid in equal monthly instalments over a 10-year period in the event of accidental disability resulting from an accident (within 180 days of the accident date).

b.      The New Term Assurance Rider from LIC (UIN: 512B210V01)

This rider is only accessible at the beginning of the policy. During the period of the policy, the benefit coverage provided by this rider will be available. If this rider is selected, the death of the Life Assured during the policy term will result in payment of an amount equal to the Term Assurance Rider Sum Assured.

Accidental Death and Disability Benefit Rider premiums cannot exceed 100% of base plan premiums, and the combined premiums for all other life insurance riders cannot exceed 30% of base plan premiums.

The Basic Sum Assured under the Basic Plan cannot be exceeded by any of the aforementioned Rider Sum Assured.

Consult the rider brochure or get in touch with the closest Branch Office of LIC for more information on the aforementioned riders.

II. The Maturity Benefit Settlement Option:

Settlement Option is an option to get Maturity Benefit in instalments over the set period of 5 or 10 or 15 years instead of lumpsum amount. This option can be utilised by the Policyholder during minority of the Life Assured or by Life Assured aged 18 years and above, for entire or part of Maturity funds payable under the policy. The amount selected for by the Policyholder/Life Assured (ie. Net Claim Amount) can be either in absolute value or as a percentage of the total claim funds payable.

The instalments shall be paid in advance at yearly or half-yearly or quarterly or monthly intervals, as selected for, subject to minimum instalment amount for different mode of payments being as under:

 

a.       Minimum monthly instalment is Rs.5,000.

b.       Minimum instalment is Rs.15000 per quarter.

c.       Minimum instalment is Rs.25,000 per half-year.

d.       Annual minimum instalment: 50,000/-

The claim proceeds must only be paid in one lump sum if the Net Claim Amount is less than what is necessary to cover the required minimum instalment amount under the option chosen by the Policyholder/Life Assured.

The interest rates that will be used to calculate the instalment payments under the Settlement Option will be those that are periodically set by the Corporation.

The Policyholder/Life Assured must exercise the option to pay the net claim amount in instalments at least three months prior to the maturity date in order to exercise the Settlement Option against Maturity Benefit.

The first payment will be made on the date of maturity, and subsequent payments will be made monthly, quarterly, semiannually, or annually from the date of maturity, depending on the mode of instalment payment selected by the policyholder.

Following the start of the settlement option's instalment payments:

a.       On receipt of a written request from the Life Assured, any request to withdraw the Settlement Option exercised against the Maturity Benefit and commute the unpaid instalments will be granted. In such a case, the higher of the following lump sum amounts shall be paid, and the policy shall expire.

(i)                  The discounted value of all upcoming payments that are due; or

(ii)                (The initial sum for which the settlement option was exercised) minus (sum of total instalments already paid).

b.       The interest rates that will be used to discount the future instalment payments will be established from time to time by the Corporation.

c.       The outstanding instalments will continue to be paid to the nominee in accordance with the option that the Life Assured chose to exercise after the Date of Maturity, and the nominee will not be permitted to make any changes of any kind.

III. Choice to receive Death Benefits in Payments:

Instead of getting the death benefit all at once, you can choose to get it over the course of 5, 10, or 15 years. This option may be used by the Policyholder while the Life Assured is a minor or by the Life Assured, who is 18 years of age or older, at any point throughout his or her lifetime, for all or a portion of the Death Benefits payable under the policy. The Policyholder/Life Assured may select a sum in either absolute dollars or as a percentage of the entire claim proceeds payable (i.e., Net Claim Amount).

The instalments must be paid in advance at chosen intervals of annually, half-yearly, quarterly, or monthly, with the following minimum instalment amounts for each manner of payment:

a.       Minimum monthly instalment is Rs.5,000

b.       Minimum instalment is 15,000 every quarter.

c.       Minimum instalment is 25,000 each half-year.

d.       Annual minimum instalment: 50,000/-

 

The claim proceeds must only be paid in one lump payment if the Net Claim Amount is less than what is necessary to cover the statutory minimum instalment amount under the option chosen by the Policyholder/Life Assured.

The interest rates that will be used to calculate the instalment payments under this option will be those that are periodically set by the Corporation.

When the policy is still in effect, the Policyholder may exercise the option to receive the Death Benefit in instalments at any time throughout his or her lifetime by designating the period of Instalment Payment and the Net Claim Amount for which the option is to be exercised. No changes of any kind may be made by the nominee before the death claim amount is paid to the nominee in accordance with the choice chosen by the Policyholder/Life Assured.