LIC New Endowment Plus Plan - Comprehensive Guide

The LIC New Endowment Plus Plan is a unique offering from the Life Insurance Corporation of India, combining insurance and investment to provide financial security and growth. This blog will delve into its features, benefits, and eligibility criteria, with a focus on residents of India.

Table of Contents

Features of LIC New Endowment Plus Plan

  1. Dual Benefit of Insurance and Investment:
    The plan offers both a risk cover and an investment opportunity, making it a comprehensive financial product.

  2. Choice of Investment Funds:
    Policyholders can choose from four types of funds based on their risk appetite: Bond Fund, Secured Fund, Balanced Fund, and Growth Fund.

  3. Partial Withdrawal Facility:
    After five years, partial withdrawals are allowed, offering liquidity to the policyholder in case of emergencies.

  4. Premium Payment Options:
    Flexible premium payment options including regular, limited, and single premium modes.

  5. Maturity Benefit:
    On maturity, the policyholder receives the Fund Value, which is the total value of the units accumulated in the policy.

  6. Death Benefit:
    In case of the unfortunate demise of the policyholder during the policy term, the nominee receives the highest of the Basic Sum Assured, the Policyholder’s Fund Value, or 105% of the total premiums paid till death.

Benefits of LIC New Endowment Plus Plan

  1. Wealth Creation:
    The investment component of the plan helps in wealth creation over the policy term, ensuring a substantial corpus at maturity.

  2. Life Cover:
    Provides financial security to the policyholder’s family in case of an untimely death.

  3. Tax Benefits:
    Premiums paid under this plan qualify for tax deductions under Section 80C of the Income Tax Act, and the maturity proceeds are tax-free under Section 10(10D).

  4. Flexible Fund Management:
    Policyholders can switch between different fund options during the policy term to optimize returns as per market conditions.

  5. Loan Facility:
    Policyholders can avail of loans against their policy after it acquires a surrender value.

Eligibility Criteria for LIC New Endowment Plus Plan

  1. Age at Entry:
    Minimum: 90 days (completed)
    Maximum: 50 years (nearest birthday)

  2. Age at Maturity:
    Minimum: 18 years (completed)
    Maximum: 60 years (nearest birthday)

  3. Policy Term: 
    10 to 20 years

  4. Sum Assured:
    Minimum: 10 times the annualized premium
    Maximum: 20 times the annualized premium

  5. Premium Payment Term:
    Equal to the policy term for regular and limited premium payment modes
    Single premium payment option available

Exclusions of LIC’s New Endowment Plus

        If the insured commits suicide within 12 months from the commencement of the plan, the death benefit shall be paid as per the terms and conditions stated in the policy. The death occurred due to suicide, alcohol abuse, an overdose of illegal substances, drugs, disability due to participation in terrorism will count as exclusions of this plan.

 

Benefit Illustration for All Fund Types

The LIC New Endowment Plus Plan offers a variety of investment options, allowing policyholders to choose funds based on their risk appetite and financial goals. Below is a benefit illustration for each type of fund: Bond Fund, Secured Fund, Balanced Fund, and Growth Fund.

Assumptions for Illustration:
  1. Policyholder’s Age: 30 years
  2. Policy Term: 20 years
  3. Sum Assured: 10 times the annual premium
  4. Annual Premium: ₹50,000
  5. Premium Payment Mode: Regular
  6. Premium Payment Term: 20 years
Fund Types and Expected Returns:

  1. Bond Fund:
    Objective: To provide steady returns with minimal risk.
    Assumed Annual Return: 6%

  2. Secured Fund:
    Objective: To provide moderate returns with low risk.
    Assumed Annual Return: 8%

  3. Balanced Fund:
    Objective: To provide balanced returns with moderate risk.
    Assumed Annual Return: 10%

  4. Growth Fund:
    Objective: To provide high returns with higher risk.
    Assumed Annual Return: 12%

Benefit Illustration:

  1. Bond Fund:

    • Maturity Benefit:
      Fund Value at 6% return: ₹17,60,000

    • Death Benefit:
      1.Highest of Sum Assured, Fund Value, or 105% of total premiums paid.
      2.Example: ₹5,00,000 Sum Assured or Fund Value or ₹10,50,000 (105% of ₹5,00,000)

  2. Secured Fund:

    • Maturity Benefit:
      Fund Value at 8% return: ₹21,25,000

    • Death Benefit:
      1.Highest of Sum Assured, Fund Value, or 105% of total premiums paid.
      2.Example: ₹5,00,000 Sum Assured or Fund Value or ₹10,50,000 (105% of ₹5,00,000)

  3. Balanced Fund:

    • Maturity Benefit:
      Fund Value at 10% return: ₹25,85,000

    • Death Benefit:
      1.Highest of Sum Assured, Fund Value, or 105% of total premiums paid.
      2.Example: ₹5,00,000 Sum Assured or Fund Value or ₹10,50,000 (105% of ₹5,00,000)

  4. Growth Fund:

    • Maturity Benefit:
      Fund Value at 12% return: ₹31,65,000

    • Death Benefit:
      1.Highest of Sum Assured, Fund Value, or 105% of total premiums paid.
      2.Example: ₹5,00,000 Sum Assured or Fund Value or ₹10,50,000 (105% of ₹5,00,000)

Explanation:
  • Maturity Benefit: This is the total amount you will receive at the end of the policy term based on the chosen fund’s performance.
  • Death Benefit: In case of the policyholder’s demise, the nominee will receive the highest of the Sum Assured, the Fund Value, or 105% of the total premiums paid.

Conclusion:

The LIC New Endowment Plus Plan offers a range of fund options to suit different risk appetites and financial goals. Whether you prefer the stability of the Bond Fund or the high potential returns of the Growth Fund, this plan provides a flexible and secure way to build wealth while ensuring financial protection for your loved ones.

For a personalized illustration and more details, please contact our advisor or Whatsapp +918428695209