LIC Endowment Plan

  • Double Benefit of Saving & Protection
  • Guaranteed Additions
  • Limited Premiums to Pay
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LIC Endowment Plan: An Overview

Do you spend your money without any prior planning? Are you worried about your long-term financial goals? Does it cause your family a nightmare of financial security in case of any unfortunate event with you? A savings account isn’t enough to free you from all these miseries. A strategically planned investment and life protection policy can help save you money. But is it possible to buy a plan having multiple benefits? LIC of India, the pioneer of insurance in India, offers a wide range of insurance products at the cheapest premium rates.

An endowment plan is one of the beneficial life insurance plans offered by LIC. Life insurance corporation of India offers a wide range of endowment products under LIC insurance offering the opportunity to save & grow your financial corpus and financially secure your future with a life cover. Let’s understand LIC endowment plans and their benefits in the article.

Table of Content

What is LIC Endowment Plan?
Why Should You Buy LIC Endowment Plan?
Benefits of Endowment Plan from LIC of India
List of Endowment Plans Provided by LIC of India
What to Consider While Purchasing a LIC Endowment Plan?
How Does LIC Endowment Plan Work?
Riders Available Under LIC Endowment Plan
How to Buy LIC Endowment Plan?
How to File a Claim?
How to Check LIC Endowment Policy Status?
FAQ of LIC Endowment Plan

What is LIC Endowment Plan?

LIC endowment plan is a type of life insurance plan that covers the risk against the policyholder's life and works as a saving plan to collect a financial corpus provided at the time of maturity. Simply put, if the policyholder dies during the policy term, then a death benefit is provided to the nominee. In the fortunate scenario, a maturity benefit is offered when the policyholder survives the whole policy tenure. Hence, the plan is a combination of life insurance and investment options. LIC of India offers a variety of endowment plans that perfectly complement the needs of India's diversified consumer base.

Why Should You Buy LIC Endowment Plan?

Several life insurance policies with specific benefits are available in the market, but endowment plans are considered a perfect saving tool and risk management asset. The endowment policies offer guaranteed returns on the invested amount. If you are still looking for decent reasons to invest in an endowment plan, reading this article will help you understand how LIC endowment plan obtains long-term investment goals.

Here’s a short overview of the types of endowment policies that will help you make a buying decision per your financial requirements.

01

Risk Cover

Being the LIC life insurance plan, the key feature of a LIC endowment plan is that they provide life insurance protection. So, even if you are no more around your family, your loved ones receive the guaranteed death benefits. Endowment plans are proven to become a significant source of income for your family in your absence.

02

Wealth Creation

Saving is a good habit, but regular saving can defend you from ambiguous situations in life. Endowment plans are the best option to instil the habit of saving through one-time, regular, or limited premium payouts. LIC endowment plans offer mid to high-level returns on the premium invested. The policyholder gets these returns as a fixed guaranteed lump sum amount known as a maturity benefit.

03

Risk Profile

The endowment policies are considered low-risk investments; hence, the associated returns are similar. The investment made in endowment plans is less risky as they do not indulge in direct market investments that help to minimize the overall portfolio risk.

04

Tax Benefits

LIC endowment plan allows you to save on taxes as per the Income Tax Act 1961. You can claim a refund of up to Rs. 1.5 lakh annually on the premiums paid towards the policy under Section 80C. Also, the death and maturity benefits received at the end of the endowment plan are tax-free under Section 10 (10D).

05

Additional Benefits

LIC endowment plan offers additional benefits like the availability of riders under the base plan to enhance the coverage, loan against the policy, guaranteed additions, and others that boost the total value of the benefits you receive. Also, the plan allows you to withdraw partial cash in any emergency.

Benefits of Buying an Endowment Plan from LIC of India

Endowment plans build a corpus through disciplined savings and help achieve long-term financial goals. The secured amount can accomplish your dream of buying a dream home, providing quality education to your child, or planning for retirement. You can prefer buying an endowment plan from the Life Insurance Corporation of India for certain reasons. Let’s look at them in detail.

01

Over 6 Decades of Trust

With the most customer-centric approach, LIC maintained the trust from its inception and has successfully settled over 98% of claims made by the nominees in the financial year 2021-22 (as per the annual report of IRDAI). The customer’s trust prevails LIC as the top insurance company in India and secures 5th position in the world.

02

Sense of Security

You will only invest your hard-earned money if you know that it is only in safe hands. With the LIC Act 1956, the life insurance corporation of India is backed up by the central government and guarantees to pay the return as mentioned in the policy term.

03

PAN India Network

To provide customers with the most accessible customer experience, LIC India operates 2048 computerized LIC branch offices and 1572 satellite offices. This network helps the policyholders to reach head offices at the earliest convenience and help solve the issues.

04

Technologically Advanced

To help the insurance industry opt for paperless documentation, the organization uses the most advanced technology, such as WAN, IVRS, LAN, and EDMS. Also, LIC of India has launched LIC e-services to ease the policy buying and customer support processes.

05

Variety of Products

LIC of India offers one of the most comprehensive policy ranges in the life insurance or group insurance as per customer requirements. It has the most extensive portfolio of group schemes. LIC of India offers different plans in the category of pure life insurance plans, child plans, endowment plans, retirement plans, pension plans, micro-insurance plans, and more to meet the needs of various customers.

06

Simplified Consumer Support

Whether you purchase a LIC policy online or offline, LIC company offers 24X7 customer support to simplify the process and solve any issue. The support team listens to your concerns and provides the most suitable solution as soon as possible.

List of Endowment Plans Provided by LIC of India

Life Insurance Corporation of India has an extensive list of products offered in the range of endowment plans under the life insurance category. These plans are curated and can be customized per the individual’s financial requirements. Let’s look into the plans

What to Consider While Purchasing a LIC Endowment Plan?

The policy buyers prefer buying a LIC endowment plan because of its comprehensive nature. Besides considering the death and maturity benefits, there are other considering factors to enhance the financial corpus for long-term goals. Be careful and consider the following vital factors while purchasing a LIC endowment plan.

01

Early Investment

The early investment allows a long horizon to invest and enhance the benefits under a plan. If started at the right time, you can ensure a good return with the power of compounding. The early investment allows you to enjoy the benefits at the right age and accomplish your goals with the amount received.

02

Decide on Insurance Coverage

Before you decide to buy an endowment policy, take your time to analyze your financial goals, calculate your expenses, and then choose a suitable sum assured. To make an informed decision, consider your liabilities, financial dependents, risk appetite, family’s lifestyle, future goals, etc. and then select a coverage amount so that your family is financially independent even when you are not around.

03

Research Various Plans

Different types of endowment plans are available to purchase at an affordable premium cost. A part of the premium is used to purchase the life insurance policy, and the other part is invested in profit-making assets. Do thorough research, compare the plans, pick one that complements your financial goals, and then make purchasing decisions.

04

Flexibility in Cover

You should check the different flexibility options available with the plan to enhance the base policy coverage and gain maximum benefits. Different options like multiple premium payment modes, add-on riders, grace period, and many others are available to enhance the flexibility of the plan.

05

Check Insurer and Insured Related Factors

An informed decision is always appreciated and yields maximum benefits at the right time. Make sure you choose the right life insurance company in India by checking the insurers’ financial position, premium rates, claim settlement ratio, customer satisfaction record, bonus rates, and other additional factors. Also, research what benefits are available for the life assured so that the policy tenure is effortless and gains the short and long-term objectives.

How Does LIC Endowment Plan Work?

Life Insurance Corporation of India offers endowment plans with the flexibility to pay premiums at a preferred frequency of monthly, half-yearly, monthly, or all at once in a single premium. The policyholder or the nominee receives the death and maturity benefits if all the premiums are duly paid towards the policy. Let’s understand how does LIC endowment plan work.

Case 1: If the life policyholder dies within the policy term

In such a case, the nominee receives the death benefit along with the guaranteed bonus or additions. The death benefit is the highest of

  • Sum Assured with accrued guaranteed additions or bonuses, or
  • Guaranteed Maturity Benefit with accrued guaranteed additions or bonuses, or
  • Minimum Death Benefit (105% of the premiums paid till death).

Case 1: If the life policyholder survives the policy term

In such a case, the policyholder receives the payout as the maturity benefits along with a guaranteed bonus or any other additions. This maturity amount is fixed as promised at the time of inception of the policy and is free from any market fluctuations.

Guaranteed Benefits: Guaranteed Maturity Benefit + Guaranteed Additions

Bonus on LIC Endowment Policy

The bonus is the additional money paid to the policyholder under an endowment plan. The life assured receives the bonuses if only the company has excess money after spending on expenses, claims, or any other costs (if applicable). LIC endowment plan offers two kinds of bonuses mentioned below

  • Reversionary Bonus
  • Terminal Bonus

The policyholder or the beneficiary receives these bonuses at the time of claim, either by maturity or death.

This bonus is paid directly from the profits made by the LIC of India at the maturity of the LIC endowment policy.

Riders Available Under LIC Endowment Plan

LIC endowment policies offer different optional riders that can be purchased to enhance the base plan coverage. The policyholder can buy the rider to robust their existing policy as per their requirements by paying an extra premium amount. The rider sum assured cannot exceed the basic sum assured of the base LIC endowment plan. Any of the following riders can be availed under the plan

  • LIC’s Accidental Death and Disability Benefit Rider: The policyholder can buy this rider anytime during the policy term of the base plan if the outstanding policy term is at least 5 years but before the policy anniversary on which the life assured turns 70. If the rider is selected on the accidental death of the policyholder, the nominee receives the Accidental Rider Benefit Sum Assured along with the death benefit under the base plan. In case of accidental disability caused by accident (within 180 days of the accident) Accident Benefit Sum Assured is paid in instalments for 10 years. The benefit cover under this rider is available during the policy term or before the policy anniversary, nearer the 70th birthday of the policyholder.
  • LIC’s Accident Benefit Rider: LIC’s accident benefit rider can be purchased anytime during the base plan policy term if the outstanding policy term is at least 5 years but before the policy anniversary on which the life assured turns 70. If the policyholder opts for the rider, the Accident Benefit Rider Sum Assured in case of accidental death is paid to the nominee along with the death benefit under the base plan. The benefit cover under this rider is available during the policy term or before the policy anniversary, nearer the 70th birthday of the policyholder.
  • LIC’s New Term Assurance Rider: The policyholder can buy this rider at the time of the inception of the policy, and the benefit cover is available during the policy term. If the rider is opted for and the life assured dies during the policy term, an amount equal to the Term Assurance Rider Sum Assured is provided to the nominee.
  • LIC’s New Critical Illness Benefit Rider: The policyholder can buy this rider at the time of the inception of the policy, and the benefit cover is available during the policy term. If the policyholder pays for this rider, the Critical Illness Sum Assured provided to the life assured on the first diagnosis of any one of the specified 15 critical illnesses covered under the rider.
  • LIC’s Premium Waiver Benefit Rider: This rider can be availed on the life of the proposer of the policy (when the life assured is minor) at any policy anniversary provided the outstanding premium paying term of the base policy and the rider remains at least five years. If this rider is selected, on the death of the proposer, the due base policy premium payments are waived after the date of death till the expiry of the rider term.

Final Words

LIC of India offers various endowment plans that fit the financial goals of the different customer bases. All the features and low-risk profile of the LIC endowment policies make them a preferable choice for policy buyers to protect their life against any uncertain event and provide investment options simultaneously. Investing in an endowment plan can generate a disciplined habit of saving that prepares you for your upcoming life events. The policyholder can also accomplish their liquidity needs under an endowment plan.

Want to buy an endowment plan to invest? Connect with our experts at RenewBuy and make the buying process easy.