All You Need To Know About LIC Limited Premium Endowment Plan 830

LIC is the largest insurance company in India, and one of the most trusted insurance providers in the country. Providing a wide array of insurance plans to citizens, the LIC Premium Endowment Plan 830 is one of their most popular insurance products. Here is a review of the overall features of this plan, for the objective of gaining an insight as to what its main benefits are:

The LIC Limited Premium Endowment Plan 830

The LIC Endowment Plan 830 provides a combined benefit of savings and protection. Having such a plan helps both, in financially safeguarding the family in the event of the policyholder’s untimely demise before maturity of the plan, as also providing a lump sum amount on maturity of the plan if the policyholder survives. In addition to this, it also provides a bonus, which is declared on this policy on a yearly basis.

This plan is a limited period plan, as the name itself indicates. What this means is that in comparison to the policy term, the payment of premiums is limited to a particular time frame. This is one of the main features of this plan.

So if it is a 12-year policy, the policyholder would have to pay premiums for either 8 or 9 years at the most, as this timeline is the limited period within which, premiums payments have to be made.

The maturity amount of this policy is payable either on the demise of the policyholder or at the end of the term of the policy – whichever is earlier.

Entry Age

An individual would have to have completed 18 years of age to be eligible for this plan. The maximum entry age however, is affixed as per the term of the policy as well as the premium payment term, as explained in the table below:

Policy Term	Premium Payment Term (8 Years)	Premium Payment Term (9 Years)
12	Maximum age is 57 years	Maximum age is 62 years
16	Maximum age is 59 years	Maximum age is 59 years
21	Maximum age is 54 years	Maximum age is 54 years

 

Eligibility and Terms and Conditions

The following are the salient features of the policy, along with certain specific terms and eligibility conditions that need to be fulfilled in order to avail of this policy –

Policy Term	Either 12,16 or 21 years
Premium Payment	8 or 9 years
Premium Payment Mode	Monthly (ECS or SSS)/Quarterly/Half-Yearly/Yearly
Sum Assured	Minimum – Rs.3,00,000 Maximum – No Limit
Minimum Accident Death Benefit	Rs. 1,00,000
Maximum Accident Death Benefit	Rs. 1 crore
Maximum Cover Ceasing Age	69 years (nearest birthday) for a 12-year policy term and 8-year premium payment term 70 years (nearest birthday) in every other case
Grace Period (Delays)	15-day extension for monthly mode 30-day extension for quarterly/half-yearly/yearly mode

Benefits

This plan provides two primary benefits – a death benefit and maturity benefit.

• In the case of the death benefit, if the policyholder should meet an unexpected demise within the policy term, then their nominee will receive the ‘Sum assured on death’, a simple reversionary bonus and a final additional bonus if any. The sum assured on death equals 125% of the basic sum assured, or 10 times the annualised premium or 105% of all premiums. The death benefit would not be less than 105% of all the premiums paid as on the date of the policyholder’s death. 

• As far as the maturity benefit is concerned, if the policyholder should survive the term of the policy, then they will receive a sum assured on maturity, a bonus and a final additional bonus, if any. The sum assured on the maturity of the plan is equal to the basic sum assured. 

• In addition to these 2 main benefits, loan facilities are also available to policyholders, after the payment of premiums for at least 2 years. The maximum loan amount which is granted will be 80% for paid-up policies and 90% for policies in force.

Examples of Benefits of this policy:

Akash, aged 30 years has taken up the Limited Premium Endowment Plan 830 for a premium paying term of 9 years and a policy term of 21 years. He selects a basic sum assured of Rs.3,00,000. He would have to therefore pay a premium of Rs.24,320  per year, for a period of 9 years which is the premium paying term.

• Scenario 1: Death during the policy 

If Akash dies during the term of the policy, his nominee will receive the death sum assured, which is 125% of the basic sum assured (i.e. 125% of Rs.3,00,000) as well as the accrued bonus. After the nominee receives this amount, the policy will be terminated. 

• Scenario 2: Accidental Death during the policy 

Should Akash die due to an accident during the policy term, the nominee will receive the death sum assured (which is 125% of Rs.3,00,000), the additional accident sum assured (Rs.3,00,000) as well as the accrued bonus. The policy will be terminated after this.

• Scenario 3: Survival of Policyholder till maturity 

If Akash survives till the end of the term of the policy, he will receive the basic sum assured, which is Rs.3,00,000 as well as the accrued bonuses and the policy will be terminated thereafter.

Premium Calculator

The following details need to be provided to calculate the premium rates for this plan:

• Name
• Age
• E-mail Address
• Mobile Number
• Policy Term
• Premium Payment Term
• Sum Assured 

Example of Premium Payments:

The following example demonstrates how premiums are determined:

Ranveer is 25 years old and has opted for the LIC Limited Premium Endowment Plan 830. His policy term is 12 years and the premium payment term is 8 years. The sum assured in this policy is Rs.10,00,000. Ranveer has to pay the premium with and without tax. The premium of the first year varies from the premium of the remaining years. The following table demonstrates the difference in premium payments from the first year, to the remaining years:

	FIRST YEAR PREMIUM			SECOND TO LAST YEAR PREMIUM
PAYMENT MODE	Without Tax	Tax	With Tax	Without Tax	Tax	With Tax
Monthly Premium	23,333	721	24,054	23,333	360	23,693
Quarterly Premium	70,000	2,163	72,163	70,000	1,082	71,082
Half-Yearly Premium	13,86,08	4,283	14,28,91	13,86,08	2,141	14,07,49
Yearly Premium	2,74,433	8,480	2,82,912	2,74,433	4,240	2,78,673

 

Discounts Provided

There are 2 main types of discounts provided by this policy, and they are based on the sum assured and the payment mode. These discounts, or rebates as they are referred to, are explained in the table below:

Sum Assured Rebate		Mode Rebate
Basic Sum Assured/ Policy Value	Rebate per Rs.1000 of Sum Assured	Premium Payment  Mode	Percentage
Rs.3,00,000 to Rs.4,90,000	NIL	Monthly & Quarterly	NIL
Rs.5,00,000 to Rs.9,90,000	0.50% of Basic Sum Assured	Half-yearly	1% of tabular premium
Rs.10,00,000 and above	0.75% of Basic Sum Assured	Yearly	2% of tabular premium

 

In addition to discounts provided to the public, LIC employees too, are entitled to a 5% rebate on all tabular premiums under the Corporate Employees Insurance Scheme (CIES).

Additional Riders

A policyholder can avail of 2 riders under this plan. They include the Term Assurance rider or the Accidental Death and Disability Benefit Rider.

• Term Assurance Rider:You can opt for this rider any time within the premium payment term, subject to the outstanding premium payment term being a minimum of 5 years. The minimum sum assured for the term assurance rider is Rs.1 lakh, and the maximum is Rs.25 lakh. The benefit cover will be available either before the anniversary of the policy where the age of the policyholder is closer to 70 years, or during the policy term – whichever comes sooner. 

• Accidental Death & Disability Benefit Rider: You can opt for this rider at any point in time within the term during which premiums for the basic plan have to be paid. This is provided the premium paying term is a minimum of 5 years. Thus, this rider can be opted for in the initial 3 years of a plan where the premium paying term is a minimum of 8 years. If the premium paying term is 9 years, then this rider can be opted for within the first 4 years.  The minimum sum assured under this rider is Rs.10,000 and the maximum is Rs. 1 crore. The benefit cover would be available before the policy anniversary where the age of the insured is closer to 70 years, or before the policy anniversary – whichever is earlier.

Procedure for Purchasing this Plan and Documents Needed

This plan can be bought by filling in the application form or proposal form along with a photo. In addition, the policyholder also has to provide age proof, address proof and medical reports, if required. The medical requirements could include having to do tests like FBS, Lipidogram Elisa for HIV and Hb % (Rs.1140), depending on the individual case of the applicant.

Claim Procedure and Documents Needed

In order to make a claim, the policyholder needs to provide a number of documents.  The Policy Bond and NEFT form need to be provided. Additionally, the discharge form and death certificate also need to be submitted, along with a cancelled cheque or bank pass book.

Additional Information

Before opting for this policy, there are certain additional details one needs to bear in mind as under:

Proposal Forms:Proposal Forms 300 or 340are used under this policy

Cooling off period:If a customer has purchased this policy and is not satisfied with it, then  he/she can return it within 15 days of the receipt of the policy.

Policy Revival: The policy will lapse if the premium is not paid within the grace period. If one wishes to continue this policy, then it can only be revived on or before 2 years from the date that the first premium went unpaid.

Riders: Riders are also available under this policy. Furthermore, disability and accidental death benefits are also available.

Service Tax:A service tax of 3.09% is applicable on this policy.

Backdating the Policy:This policy can be backdated, provided, it is within the same financial year.

Suicide Clause:If the policyholder commits suicide within 12 months of the date of revival or the date of commencement of risk, then 80% of the premium of what has already been paid, will be returned to the nominees or assignees of the policyholder. If the policyholder should commit suicide after 12 months, then the full sum assured, and the bonus due will be paid to the nominee.

Surrender Value:The surrender value is available after the completion of the payment of 24-months-worth of premiums. There are 2 types of surrender value as below –

• Special Surrender Value: The special surrender value will be the discounted value of the paid-up sum assured and the vested simple reversionary bonuses. 

• Guaranteed Surrender Value: The guaranteed surrender value would be a percentage of the total premiums paid (net of taxes) excluding the extra premium, if any. It also includes the premium paid for riders, if such an option has been taken. The guaranteed surrender value factor will be applicable to the vested simple reversionary bonus, if any.

Paid-up value:

• On the death of the policyholder, the paid-up value of the sum assured is as per the following formula – 

Paid up sum assured (Death) = Sum assured on death of policyholder x (number of premiums already paid/number of premiums that are payable during the premium paying term) 

• The sum assured due on maturity under a paid-up policy is as follows –  

Paid up sum assured (Maturity) = Sum Assured on Maturity of policy x (number of premiums already paid/number of premiums that are payable)

Policy Stamping: Stamping charges are also applicable to this policy, and will be 20 paise per thousand of the sum assured.

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