LIC New Endowment Plan Overview
LIC New Endowment Plan 814 is one of the best policies of LIC India. LIC offers many policies to its customers to satisfy the different needs of people. Each policy provides different benefits to the policyholders. One such plan that provides guaranteed returns is LIC New Endowment Plan. The plan is a non-linked LIC policy that offers a great time in the policy term. The duration of the policy plan is from 12-35 years.
Why should you buy LIC New Endowment Plan?
LIC new endowment plan is best for people because of the following reasons:
- This plan is a perfect combination of investment and life insurance
- It provides a great bonus to its policyholders
- One has to pay a low premium amount when compared to other plans
- Rider gets double accidental benefits
- The Policyholder is eligible to get a bonus and final addition bonus from LIC
- The maturity amount is tax-free
- One can save the tax amount on premium payment under section 80C
- It serves as one of the secure investment options for getting monetary gains
LIC New Endowment Plan – Key Features
The key features of the LIC endowment plan are as follows:
- The LIC plan is a non-linked traditional plan.
- One has to pay the premium payment for the whole tenure.
- When the policyholder survives at the end of the policy term, he/she will gain the benefits of the plan.
- In the event of the death of a policyholder, the nominee gets the plan benefits. The plan will come to an end after that.
- One can ask for the additional life cover after paying an additional premium amount.
- The LIC plan 814 offers a simple reversionary bonus either on maturity or after the death of the insured person.
- Massive sum assured rebate is another advantage of this plan.
- One can buy this plan, as it offers guaranteed returns and bonuses.
- An insured person can also avail other benefits such as Disability Benefit Rider and Accidental Death.
Plan Parameters of LIC New Endowment Plan
| Entry Age | 8-55 years |
| Policy Term | 12-35 years |
| Premium Mode Rebate | Nil on Quarterly, 1% on Half Yearly, 2% on Annually |
| Loan Facility | One can avail the loan after three years of the policy term |
| Basic Sum Assured | 100000 and above |
| Sum Assured Rebate | 0% on 0 to 1,95,000 of Sum Assured
2% on 2,00,000 to 4,95,000 of Sum Assured 3% on 5,00,000 and above Sum Assured |
| Surrender | After 3 years of making full premium payment |
| The revival of the Policy | Within 2 years |
| Premium Paying Mode | Monthly, Quarterly, Half Yearly, and Yearly |
Benefits of LIC New Endowment Plan
There are a lot of benefits that a LIC new endowment plan 814 offers to its insured person. Let us discuss them in detail:
Death Benefit
In the event of the death of an insured person during the policy term, the nominee receives the death benefit. Such a death benefit includes the
- Sum Assured on Death
- Simple Reversionary Bonuses
- Final Addition Bonus
The sum assured on death is a higher sum that includes:
- Basic Sum Assured that you choose at the starting of the policy
- 10 times more than the Yearly Premium amount
- 105% of all the paid premium amounts till that date
Maturity Benefit
LIC new endowment plan 814 provides a maturity benefit to the insured person at the end of the tenure. If the insured person survives until the end of the plan, he/she will receive the maturity benefit. Such a maturity benefit includes a lump sum amount that helps the insured person to meet financial goals.
Maturity Benefit = Sum Assured + Reversionary Bonus
Participation in Corporation Profit
Based on the experience of the LIC, it allows the policy to participate in profits. Such participation may allow you to get a Simple Reversionary Bonus. The plan declares the bonus amount at the end of the policy term. Based on the year of claiming the policy, the insured person is eligible to get Final Addition Bonus.
Tax Benefits
When your premium amount reaches INR 1.5 lakhs under LIC endowment plan 814, then the amount is free from taxes. It is applicable under the law of Section 80C. Also, the maturity benefit and death benefit are tax-free under the law Section 10D.
Rider Benefit
An insured person has the facility to avail Accidental Death and Disability Benefit Rider. It means that in the event of the death of an insured person due to accident or disability, he/she receives an extra benefit. It applies to only adults. This rider benefit is optional, and an insured person can decide about it.
Loan Benefit
The policyholder can avail of a loan after three years of the policy term. The policyholder can apply for a loan after completing the premium payments. The loan amount depends on certain parameters such as surrender value, etc.
Bonus Benefit
The maturity value of the insured person may increase through the final addition bonus and simple revisionary bonus. Also, such bonuses may increase if the LIC Company generates profits.
Other Policy Details of LIC New Endowment Plan
Free-Look Period
If the insured person is not happy with the terms and conditions of the new endowment plan, he/she can cancel the plan within the Free-Look period. The Free-Look period is the time duration of 15 days from the date of purchase of the plan. Once, you cancel the policy, the plan credits the money back to your bank account.
Surrender Value
When the insured person surrenders the policy, he/she has to pay a certain amount called the Surrender Value. Sometimes, the insured person can’t make premium payments, in such a case he/she can surrender it. But the insured person can make a surrender claim only after paying the premium amount.
Grace Period
An insurer provides an additional time to make the premium payment is called the Grace Period. In such a period, the insured person doesn’t have to pay any penalty for delaying premium payment. Concerning to the LIC table no 814l,
- The customer gets the grace period of 30 days – For premium payment frequency is yearly, half-yearly, or quarterly
- The customer gets the grace period of 15 days – For premium payment frequency is monthly
If the policyholder is not able to clear the dues during the grace period, then the policy will fail. If the policyholder dies during the grace period, the nominee will get the benefits.
Revival Period
The policyholder has the facility to activate the plan, once the plan lapses due to failure of premium payments. But the revival should happen within 2 successive years of the policy term.
Flexibility in Premium Payment
The policyholder has the right to choose the frequency for making premium payments. So, there are four premium paying frequencies such as
- Monthly
- Quarterly
- Half Yearly
- Annually
Add-on Benefits
The policy offers some optional benefits, which you can add to this policy. Such optional benefits cover additional risks related to the life of the policyholder. The riders of this plan include
- New Critical Illness Benefit Rider
- Premium Waiver Benefit Rider
- Accident Death Rider
- New Term Assurance Rider
- Accidental Death and Disability Benefit Rider
Paid-up Benefits
If the insured person discontinues the premium payment after paying it continuously for 2 years, then the person will receive the paid-up value. It reduces the maturity benefits and death benefits of the plan when you discontinue the premium payment after 2 years of tenure.
How does The New Endowment Plan work?
Under the LIC table 814 new endowment plan an individual invests for the policy between 12-35 years. Also, the policyholder has to select the sum assured of more than 1 Lakh. On completion of making premium payments, the policyholder gets the maturity benefit. Such a benefit is the sum of the basic sum assured and bonus.
In the event of the death of the policyholder, the nominee gets the death benefit. Such a benefit is the sum of the basic sum assured and reversionary bonuses. Death benefit provides the higher sum money, as it includes basic sum assured and 10 times of the Yearly Premium amount.
Sample Calculation
Consider,
Policyholder’s age: 25
Sum Assured: Rs. 25 lakhs
Premium Payment Term: 35 Years
Policy Term: 35 Years
So, the premium amount that the policyholder has to pay is Rs. 5,800/month
Maturity Value = Sum Assured + Simple Reversionary Bonus + Any special bonus + Final Addition Bonus
Maturity Amount = Rs. 60, 00,000 at 4% reversionary bonus
Bonus in LIC Plan no 814
There are two types of bonuses available under this LIC plan no 814. They are
- Simple Reversionary Bonus
- Final Addition Bonus
Simple Reversionary Bonus
A simple reversionary bonus is an amount per thousand of sum assured yearly. This bonus amount gets added to the maturity value during the selected term. One will get the reversionary bonus at the end of the premium paying term. If earlier death of the insured person occurs, the nominee gets the reversionary bonus with the final addition bonus.
Final Addition Bonus
In the event of the death of an insured person, the nominee or family members receive the sum assured with the final addition bonus. One may get this bonus when the policy runs for a certain minimum period. Also, LIC new endowment plan with profits may increase your bonus amount.
So, the Total Bonus = Simple Reversionary Bonus + Final Addition Bonus
How to calculate Bonus?
To calculate Bonus Value, one has to use the following formula:
Bonus Value = (Sum Assured * Bonus Rate) /1000
Consider an individual buys a plan for 25 years and the sum assured is Rs 10 lakhs. If the bonus rate is 30, then the simple reversionary bonus is
Simple Reversionary Bonus
Bonus = (Sum Assured * Bonus Rate) /1000 = (30 * 10, 00,000) /1000 = 30,000
So, the simple reversionary bonus = 30000 * policy tenure = 30000 * 25 = Rs. 7, 50,000
Final Addition Bonus
Assume that Rs. 200 is the value of sum assured per thousand
Final Addition Bonus = (Sum Assured * Bonus Rate)/1000 = (200 * 10, 00,000) /1000 = Rs. 2, 00,000
Total Bonus
Total Bonus = Simple Reversionary Bonus + Final Addition Bonus
Total Bonus = Rs. 7, 50,000 + Rs. 2, 00,000 = Rs. 9, 50,000
Premium and Maturity Calculator for LIC New Endowment Plan
One can use the endowment plan premium calculator to calculate the various things such as
- Premium Sum
- Development Esteem
- Surrender Esteem
- Credit Esteem
- Returns of the Policy
To get the premium value, you need to provide various data such as age, policy tenure, etc.
To calculate the maturity value, one can use the LIC new endowment maturity calculator. To get the maturity value using a calculator, you need to provide the following details
- Sum Assured in your plan
- Premium payment term
- Month and Year of the purchase of the plan
Online Premium and Maturity Calculator of endowment plan 814 provides you the clear details of premium and maturity benefits. The online premium calculator calculates the premium amount in both ways of with or without riders.
Riders for LIC New Endowment Policy
The LIC endowment policy offers additional items to an insured person for the benefit of him/her. Some of the riders who can access such additional benefits are as follows:
- Critical Illness
- Accidental Death
- Hospital Cash
- Waiver of Premium
- Sum Assured Earlier
- Physical Challenged Person
LIC New Endowment Plan 814 – Riders Available
LIC’s Accidental Death and Disability Benefit Rider
According to this benefit, the rider gets an additional amount which is equal to Accident Benefit Sum Assured. This benefit is applicable when the person is in force at the accident time. If the person suffers from accidental permanent disability, then the person will get an amount equal to the Sum Assured. The person gets such amount in installments for 10 years.
Critical Illness Benefit Rider
Critical Illness Benefit Rider helps to protect the financial loss of the person who suffers from major diseases. The plan provides the risk cover for the critically-suffering individual. LIC has a list of 15 critical illnesses. When the individual suffers from any one of these illnesses, then the individual gets the Sum Assured amount.
Term Insurance Rider
This rider helps an individual to gain some additional insurance coverage. An individual already has the insurance coverage of the plan. In addition to this plan coverage, he gains additional coverage through this rider.
Who should buy LIC New Endowment Plan?
An individual who is in between 8-55 years of age can purchase this LIC new endowment policy. It is the best policy, as it offers secure investment and life cover with good money returns. A person gets life protection under this plan, as it offers good lump sum money back at the end of the tenure.
How to purchase LIC New Endowment Plan?
One has to visit the nearest LIC branch to purchase this plan. An insurer provides you the proposal form 300/340/360, which you need to fill with correct details. Once you fill the form under the guidance of an insurer, you can submit it with a medical history and other KYC (Know Your Customer) documents. Depending on the sum assured and the age of the policyholder, he/she has to take a medical test. After submitting the documents and proposal form, you can wait for the approval of your policy.
You can check the status of the plan through the online LIC portal website. Use your policy number to check the status. One can also purchase the plan online using LIC portal website. You need to do a similar offline procedure like filling the online proposal form and submitting the documents.
Required Documents to buy Endowment Policy
One has to submit the following documents to apply for the LIC policy 814.
- Passport size photograph
- Proposal form with filled details
- Medical test reports
- Residence proof like Electricity bill, Ration card, Voter ID, bank passbook, Credit card bill, Driving license, Telephone bill, Water bill, and Rental agreement
- Age Proof documents like Birth certificate, Passport, and Aadhar card
Exclusions in LIC’s New Endowment Plan
LIC endowment plan table 814 becomes invalid if the policyholder commits suicide during the policy term.
- If the policyholder commits suicide within one year of purchasing the endowment plan, LIC will not provide any claim to the policyholder’s family. LIC just provides 80% of the premium amount paid, only when the policy is still in force.
- If the policyholder commits suicide within one year of revival of the endowment plan, LIC may present 80% of the premium amount paid till the death of the policyholder. Other than that LIC will not present any other claim.
Non-Forfeiture Regulations
The non-forfeiture regulation explains the various conditions under which the policyholder’s premium amount paid during the tenure is not forfeited.
Premium amount paid for the policy term for less than 3 years
- The termination of the LIC policy occurs when the grace period is over. The LIC policy starts counting from the first unpaid premium date.
- After termination of the LIC policy, all benefits like maturity benefit and death benefit, etc, may stop to exist.
Premium amount for 3 years of the tenure
- The LIC plan is not going to end completely
- The sum assured amount may reduce to the ‘Paid-Up Sum Assured’. This sum assured may include the total premiums that the policy has specified.
- The policyholder may get an existing bonus but not further profits that the insurer may gain after the policyholder’s death.
Claiming for LIC New Endowment Plan
Death Claim
In the event of the death of the policyholder, the nominee has to claim the LIC policy. To claim the plan, the nominee has to submit the following documents:
- Claim forms that are required by LIC
- NEFT Mandate
- Primary Policy Documents
- Death proof such as Death Certificate of the policyholder
- ID and Address Proof of the Nominee
- Medical Treatment Proof before the death of the policyholder
Maturity Claim and Surrender Claim
If the policyholder is alive till the end of the policy term, then the policyholder has to make a maturity or surrender claim. To claim the plan, the policyholder has to submit the following documents:
- Original Policy Papers
- Bank Account Details
- Discharged Form
- NEFT Mandate from the Claimant
If the policyholder fails to make premium payments within the grace period, the policy will lapse and all benefits of the policy will stop. However, the policy may provide some paid-up value for the reduced sum assured to the policyholder, if the policyholder has paid premiums for at least three years.
Reduced Sum Assured = Basic Sum Assured *(Number of Premiums Paid / Total Number of Premiums Payable)
The revival of the policy happens within 2 consecutive years from the date of not making premium payment.
What happens if the Policyholder wants to surrender the policy?
One can surrender the policy plan only after completing at least 3 years of premium payments. The percentage of the cash value depends on the policy year and the policy tenure.
What happens if the Policyholder wants a loan against the policy?
One can apply for the loan after completing the premium payments of the policy term. One can also avail of the loan when the policy gets the surrender value and meets the terms and conditions.
Conclusion
Apart from the LIC New Endowment plan, the LIC offers other endowment plans such as
- Single-Premium Endowment Plan
- LIC New Jeevan Anand
- LIC Jeevan Rakshak
- LIC Jeevan Lakshya
- Limited Premium Endowment Plan
One can also buy any one of these plans if you are not happy with the terms and conditions of the New Endowment plan. But the endowment plan is special about its combination of saving cum protection. It helps the family members of the policyholder to meet financial goals. Thus, the plan is the best option for an individual who wants a saving option along with risk cover. With the help of endowment policy, one can meet their long-term financial goals in a well-planned way.