LIC Single Premium Endowment Plan

LIC Single Premium Endowment Plan- An Overview

The LIC Single Premium Endowment Plan is a life insurance policy offered by the LIC of India that offers protection and savings benefits. It requires a one-time premium payment and provides a lump sum payment upon maturity or in case of the insured's unfortunate demise during the policy term. Additionally, the plan allows for loans against the policy after completion of one year, with the loan amount being 90% of the surrender value. This plan aims to provide financial security to the insured and their family, combining insurance coverage with a savings component for future financial goals.

Key Features of LIC Single Premium Endowment Policy 

• The premium under this LIC single premium policy is paid as a lump sum at the plan's start.

• This LIC one time investment plan provides returns and protection against the untimely demise

• This policy can be taken for anyone between 90 days to 65 years

• On survival till the end of a policy tenure or on earlier death, the entire Sum Assured, along with accrued Bonuses, will be paid, and the policy terminates

• This policy participates in the profits of LIC and offers a simple Reversionary Bonus and Final Additional Bonus if any

Eligibility Criteria Of LIC Single Premium Endowment Plan

LIC Resources

Benefits of LIC Single Premium Endowment Plan

1. Death Benefit:

   If the policyholder dies within the policy tenure:

   • Only the Single Premium will be paid to the nominee if the Life Insured dies before the commencement of the risk.

   • After risk commencement, the Sum Assured and accrued bonuses, if any, would be paid as the Death Benefit.

2. Maturity Benefit: 

   On survival of the policyholder till the end of the policy tenure, the Sum Assured, along with a simple Reversionary Bonus and Final Addition Bonus, if any, would be paid to the policyholder as Maturity Benefit, and the policy terminates

3. Participation in Profits:

   LIC Single Premium Endowment Plan takes part in LIC’s profits. It earns Simple Reversionary Bonuses, depending on LIC’s performance. If the policy ends due to maturity or death, a Final (Additional) Bonus may also be added, as per LIC’s terms at that time. Bonus payouts under this LIC single premium endowment plan are based on LIC’s surplus and approved by the Central Government under the LIC Act, 1956.

4. Tax Benefits

   For this LIC one time investment plan, any taxes imposed by the Government of India will apply as per current tax laws and rates. The tax will be added to your one-time premium, including any extra or rider premiums. This tax amount is not counted when calculating your plan’s benefits.

Sample Premium Illustration for LIC Single Premium Endowment Plan

An individual looking to buy an LIC single premium endowment policy should know various aspects of its premium calculation. For instance, they must know how the premium changes based on the different sum assured and according to the age of the insured individual holding the policy, what the sample premium is for every increase of, say, Rs. 1000 in Sum Assured for different policy periods, and so on. 

The illustration of the annual premium for the basic SA of Rs. 1 Lakh is: 

Riders Available With LIC Single Premium Endowment Plan 

LIC Single Premium Endowment Plan offers two optional riders for extra protection. You can choose them at the time of buying the policy by paying an extra premium:

1. Accidental Death & Disability Rider

   This rider will be chosen only at the time of policy inception. If this rider is opted in case of an accidental death, the sum assured amount from the Accidental Benefit rider will be paid in a lump sum. In case of an accidental disability causing beacuse of accident (within 180 days from the accident date), an amount equivalent to the accidental benefit SA will be paid in equal installments (monthly) for over 10 years. 

2.  LIC’s New Term Assurance Rider

   This rider is available at the policy's inception only. In case the rider is opted for, an amount that is equivalent to the sum assured amount of the term assurance rider so will be paid in case of life assured’s death during the policy term. The premium of this rider should not exceed 100% of the premium amount under the base policy. The premium under all riders shall not go above 30% of the premium under the base plan.

Policy Details of LIC Single Premium Endowment Plan

• Grace Period: Not applicable as there is no need for further premium payment under a LIC single premium endowment policy.

• Policy Termination or Surrender Benefit under the LIC single premium policy: The Surrender Benefit is available under this plan:

  • Within the first year: 70% of the Single premium paid, excluding taxes and extra premium, if any

  • From the 2nd year onwards, 90% of the Single premium paid, excluding taxes, extra premium, if any, and all survival benefits paid earlier. 

• Surrender Value: The LIC one time investment plan single premium policy has a guaranteed surrender value. Policyholders will receive 70% of the premium paid if the LIC single premium endowment policy is surrendered within the first year and 90% of the single premium paid from the second year onwards.

• Free Look Period: If you are not pleased with the coverage and terms and conditions of the LIC single premium policy, you have the option of canceling the policy within 15 days of receipt of the policy documents, provided there has been no claim. 

• Policy Loan: A policy loan can be obtained under this plan after one full year of the policy being in force. The loan amount will be 90% of the surrender value when the loan is approved.

• Rebates for LIC Single Premium Endowment Policy : The policy offers discounts for a higher sum assured, helping the individual get more coverage for a lower premium.

Exclusions under LIC Single Premium Endowment Policy

Suicide: The policy will not be valid if the policyholder, whether in a sound mental state or not, commits suicide within 12 months from the start of coverage. In such an event, the company will pay an amount equal to the higher of either 90% of the Single Premium for the Base Policy (excluding taxes, additional premiums, and rider premiums except for term assurance rider premium, if any) or the Surrender Value as of the date of death. No other claims will be considered by the company under this policy.

In case of a suicide committed within 12 months of policy inception, only 90% of the single premium paid is returned to the nominee. 

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