LIC’s Single Premium Endowment Plan (917)

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LIC’s Single Premium Endowment Plan is a saving plan that is designed for long term saving to meet the need of liquidity in future and it also provides risk cover more than its paid-up value. It can be closely compared with Bank fix deposit scheme with added features of life risk cover and income tax rebate. Premium is paid as lump sum ( one time only ) when one buys the policy. This plan also takes care of liquidity needs before maturity, through its loan facility. This is an endowment or traditional plan- which means it is not linked to stock market. The return on investment will be based on the profit of LIC and thereafter the declaration of bonus rate for the particular product. To know more about this policy let us start with its features:

 Premium paying term: Single Premium only

 Policy term (time until your policy matures): 10 to 25 years

 Minimum Sum Assured: 50000

 Maximum Sum Assured: unlimited (with special medical reports and income proof)

 Minimum Entry Level Age: 90 days ( Completed )

 Maximum Entry Level Age: 65 years in nearest birthday

Minimum Maturity Age: 18 years ( Completed )

Maximum Maturity Age: 75 years in nearest birthday

 Maximum Accidental Death and Disability benefit rider applicable from the age of 18 to 70 years

 Maturity Benefit: Sum assured + Bonus  (for illustration keep on reading)

 Loan: Loan can be availed under this plan any time after completion of one policy year. The loan shall be equal to 90% of the surrender value as on date of sanction of loan.

Surrender: The policy can be surrendered at any time during the policy year. On surrender of the
policy, the Corporation shall pay the Surrender Value equal to higher of Guaranteed Surrender Value or Special Surrender Value.
The Special Surrender Value is reviewable and shall be determined by the Corporation from time to time subject to prior approval of IRDAI The Guaranteed Surrender Value allowable shall be as under:
- First year: 75% of the Single premium
- Thereafter: 90% of the Single premium

 Benefit illustration:

Ajay Singh ( 28 years age ) a builder has purchased LIC’s Single Premium Endowment Plan of Sum assured 1000000 INR for his wife Neeta at the age of  26 years, after considering following benefit illustration:-

LIC’s Single Premium Endowment Plan (917) Benefit Illustration
Policy Term 12 20 25
Premium Paying term Single Single Single
Sum Assured 1000000 1000000 1000000

Single Premium

without GST

679000 515850 438000
GST 30555 23213 19710
Total Premium Paid 709555 539063 457710
Return at Maturity
Sum Assured 1000000 1000000 1000000
Bonus 456000 860000 1200000
Final Additional Bonus 0 70000 450000
Total 1456000 1930000 2650000

All of these maturity is tax free under income tax act 10 (D)

*all maturity projection is based on current rate of bonus paid by LIC.