LIC Single Premium Endowment (Plan No. 917)

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LIC Single Premium Endowment Plan 917 endows with death and maturity benefits. Endowment insurance plans help in covering risks while also offers guaranteed returns. It includes Sum Assured and amounts of bonus provided each year and at the end of the policy term. The policyholders are allowed to select the cover amount which also depends on policy features.

Features- LIC’s Single Premium Endowment Plan

  • The premium is paid at once during the plan started.
  • The one-time payment provides protection and returns in cases of demise.
  • The policyholder can be of the age of 90 days to 65 years.
  • On occasions of death or policy mature, Sum Assured is paid with accrued bonuses.
  • The policyholder is also entitled to receive Reversionary Bonuses and Final additional bonuses.
  • Sum Assured for this endowment policy shall commence from 50000 with no provision of the upper limit.
  • The Sum Assured over 50000 are covered in multiples of 5000
  • If the age of the policyholders is 8 years, then the policy starts 2 years before (that is 6 years of age).
Particulars Description
Entry Age of insurer Minimum age to be 90 days while the maximum must be 65 years
Maturity Age Minimum 18 years. maximum 75 years
Policy Terms Minimum 10 years and maximum 25 years
Frequency of Premium Payment Single
Minimum Assured Sum 50000

 

Benefits of the Plan:

Maturity Benefits

The Policy Holder receives an assured sum at end of the maturity which may be collated with Reversionary and final additional bonus. The policyholder might receive Simple Reversionary Bonuses at the end of each year as per the terms and conditions of a single premium endowment policy.  Even if the bonus amounts are added, the Sum Assured at the end of the period does not increase.

Final Addition Bonuses are generally declared at policy tenure end after considerations of timely payment of premiums. The bonuses received by the policyholders are rewards that LIC pays.

Death Benefits

The nominees receive assured sum, simple reversionary bonuses (as per the date of the policy), and a final additional bonus of that particular year.  If the insured dies before the risk commencement period, the nominee is entitled to receive a Single premium.

Also, if the policyholder attains death after the risk commencement period, the Sum Assured along with accrued bonuses are paid as death benefits.  The policyholder can also avail high sum assured discount under this policy

Other Benefits

The policyholder can seek loan facilities after completing one year of the plan. As per sections 10 (10D) and 80 C, this policy has tax benefits. The Single Premium Policy comes with a surrender value guaranteed to every policyholder. If the insured surrenders the policy within one year, then he shall receive 70 % of the premium paid. Also, if the policyholder decides to surrender within two years after taking policies, then he/ she is entitled to receive 90 % of the premium paid.

The surrender value might be added with reversionary bonuses, if any,  at the time of surrendering the policy. Individuals seeking to buy LIC must gain knowledge on calculations of premiums. Like premium changes as with assured sum in alignment with the age of the insurer.

Grace Period and Policy Termination

There is no grace period as the policyholder is required to pay the premium in lumpsum. On surrendering the policy within one year, the policyholder can retrieve 70 % of premiums which excludes taxes.  In the second year of surrendering, 90 % of Single Premium are retrieved that includes survival benefits while excluding taxes.

The bonuses are multiplied by the surrender value factor.  If the policyholder is not satisfied with the terms and features of the Single Premium Endowment Plan, they can cancel the policy within 15 days.  In case, the insured commits suicide within a year of taking the policy, 90% of paid premiums are realisable. The potential insurer must present accurate medical history with address and identity proof at the time of submitting the policy documents.

Tax Implications

 The premiums are exempted from taxes under sections 80 C of the Income Tax Act. However, only a part of the premiums is tax-free.  The claim amount at maturity is taxable as per the current tax rates and laws. Besides, death claims are not taxable under section 10 (10 d) of the Income Tax Act.

Frequently Asked Question

  1. What are the Singe Premium Endowment Plans?

 In the single premium endowment plans, premiums are paid in lumpsum for a fixed period as per the requirement of the policy.

  1. What are the minimum and maximum age for the policy?

The minimum age for taking the policy is 90 days while the maximum is 65 years.

  1. What documents are required for taking the policy?

Application forms need to be filled along with past medical records, address proof, identity proof along other documents of KYC.

  1. Are there any exclusions within the Single Premium Endowment Plan?

If the policyholder commits suicide within a year of taking the policy, the nominee will receive 90 % of the premium paid.

  1. What are policy termination and surrender benefits?

The policy can be terminated within a year of which 70% are realisable. The policy can be also be terminated within 15 days if the policyholder is not satisfied with the features.  On surrendering the policy, the premium is returned without any taxation.

  1. Are Single Premium Endowment Plans are beneficial?

It is beneficial for individuals who are willing to pay in a lump sum to save money for education and marriage.

  1. Can a Loan be Availed on this plan?

Yes, loans can be availed only after one year of completion.

  1. Can I surrender my policy within 5 years?

Yes, the Single premium endowment plan needs to be in an inactive mode for a maximum of 3 years.

  1. What are tax implications?

Only portions of premiums are taxable while death claims are tax-free. However, the sum assured at maturity is taxable under section 10 (10D).

  1. What are the maturity benefits?

The policyholder will receive an assured sum with a simple reversionary bonus and a final additional bonus

 

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