Single-Premium Endowment policy from Life Insurance Corporation, India is a participating yet non-linked, one-time lump-sum premium payment plan. This particular plan only commences when the premium is paid in full.
The most attractive thing about this plan is that the policyholder is awarded savings and a life cover at the same time. These dual benefits are good for those that don’t want to compromise with the financial safety of their families while also managing their wealth.
Depending on what the buyer wishes to use the corpus on, the LIC single premium policy can be used as a retirement or savings fund for dependents that they can inherit.
As opposed to the term plans, the endowment or single premium policies offer both death and maturity benefits. Death benefits can be accompanied with some bonuses as stipulated in the policy document.
The Life Insurance Corporation single premium endowment plans (UIN allotted by IRDAI: 512N283V02) function as insurance policies that can provide a financial cover to the dependents of the insured individual while generating a sizeable return, which can also come with some bonuses (reversionary and terminal).
This particular plan has substituted the Jeevan Vriddhi plans, which used to be the LIC single premium policies. And similar to the Jeevan Vriddhi plans, the sum assured for this plan depends upon the period being opted for, and other details furnished by the applicant at the time of purchase.
This is a long-term plan, as the increase in the plan tenure helps amass better returns, just like most other insurance cum investment plans in the market. However, there are rebates and other additive bonuses that can also be availed if the applicant goes for a higher assured sum.
Another prominent feature of this plan is that it takes care of the immediate liquidity needs of the insured through loans. This is why most experienced advisors recommend this plan to investors that can afford to part with the one-time premium amount. Getting returns and an insurance cover from a single product is, after all, a very lucrative offer and makes them some of the best policies.
Being an insurance product, it also comes with tax-saving benefits. LIC also provides some riders that can be bought alongside the basic plan, which enhances the cover and risk protection ability of the policy.
But the best facets of this plan must be the one-time premium payment (a lump sum) and a guaranteed return on the investments, which translates into getting either death benefits or maturity benefits from the policy. So, if the insured individual expires during the tenure of the plan, the nominees and dependents are provided with financial benefits. On the other hand, if the insured individual survives beyond the term of the plan, they are given the stipulated sum as maturity benefits from the plan.
Therefore, these are the perfect single premium policies for investors that are usually deterred by the concept of getting just death benefits from their insurance plans.
Just like traditional insurance plans, the LIC single premium policies also come with some really attractive features and benefits. These are:
|Mode of payment or intervals||Minimum amount to be opted for (INR)|
Final or additional bonuses are announced or added by LIC in the policy benefits, but these might vary from year to year. The amount of these bonuses depends upon the year in which the death or maturity claim is filed and are regulated by the terms and conditions stipulated for that year by LIC
Rebates offered for opting a higher assured cover, which is as follows:
|Assured Cover Amount (INR)||Rebate (INR)|
|50,000 - 95,000||Not applicable|
|1, 00,000 - 1, 95,000||18% of the assured cover|
|2, 00,000 - 2, 95,000||25% of the assured cover|
|3, 00,000 - above||30% of the assured cover|
There are two riders that are offered under this plan by LIC which have to be bought with the plan and aren’t available for purchase later on. These are:
UIN allotted by IRDAI: 512B209V02. This rider offers additional protection against death or disabilities (partial or total) occurring due to accidents during the term of the policy. An additional cover amount is paid after an accidental death claim is filed; however, the disability cover only kicks in if the disability has arisen within 180 days of the accident. The disability benefits are also paid in monthly instalments over the duration of 10 years
UIN allotted by IRDAI: 512B210V01. This rider provides additional term assurance sum if the insured individual meets an untimely demise during the policy tenure
LIC single premium endowment plan is an ideal choice for investors as it offers multiple realistic benefits:
All claims made after the death of the policyholder are entertained for paying out the entirety of death benefits or assured sum, except the claims made for deaths arising from suicides or self-harm. The benefits are governed under the provisions mentioned below:
LIC single premium endowment policy has the following limitations and eligibility conditions:
|Eligibility criteria||Stipulated details|
|Minimum entry age for the plan||90 days|
|Maximum entry age for the plan||65 years|
|Minimum age at the time of maturity for the plan||18 years|
|Maximum age at the time of maturity for the plan||75 years|
|Minimum Policy tenure||10 years|
|Maximum Policy tenure||25 years|
|Minimum assured amount||Rs. 50, 000|
|Maximum assured amount||No upper cap (but has to be a multiple of Rs. 5,000)|
|Premium payment intervals||Single or one-time-only (for riders as well)|
|The date for risk commencement||For a minor policyholder below the age of 8 years:The risk will commence under the plan 2 years from the date of policy commencement or from the policy anniversary coinciding with the completion of 8 years of age, whichever falls the earliest.For policyholders above the age of 8 years:Risk commences immediately, with no waiting period.|
The claim settlement process is an indelible part of any insurance plan, which is also applicable on the LIC single premium policies. As the process is an integral part of the services offered to all policyholders, LIC puts an emphasis on the claim settlement process. LIC has a claim settlement ratio (CSR) of 97.79% for the fiscal year 2018-19, which makes their plans some of the best policies for the average Indian consumer.
For this plan, the date of the policy is the date of risk commencement, which will be mentioned in the documents related to the plan. Any claims arising before the risk commencement date are usually not entertained.
The claim settlement procedure is applicable to maturity, death or accidental death and disability benefits. These procedures are listed below:
The policy benefits are paid out after the policy has expired (the policy tenure mentioned in the policy documents are over) and the plan has attained its stipulated paid-up value.
Upon the death of the insured individual, if it has occurred during the tenure of the plan, then the insured’s dependents can file for a claim to get death benefits. LIC categorises death claims into either death claims arising within 3 years from the date of the policy (risk commencement) or death claims arising after 3 years from the date of the policy.
The documents for both cases differ slightly, which will be covered in the next section.
If any riders have been bought as well, then these can be claimed alongside the maturity or death benefits stipulated in the basic plan. These have to be mentioned in the claim form for both benefits.
Accident Benefits can be claimed if the policyholder has bought the appropriate rider attached with it. For claiming these benefits, the insured individual must have an active plan and should furnish some necessary documents like FIR, post-mortem report, and a valid disability certificate.
The riders are terminated alongside the base plan, as soon as a claim is successfully processed.
Policy documents along with, required KYC documents, a filled-out claim form (depending on the case) with an NEFT mandate form has to be provided to the insurer to process the claim. If the applicant submits photocopies of the forms, then these documents have to be self-attested as well as authorised by authorised personnel from LIC.
LIC settles numerous claims per year, provided that all these claims are substantiated and genuine. If the claimant suppresses information from the Corporation or provides fraudulent details, then the claim can be denied.
When a case is suspected for non-disclosure of pertinent information, the claimant is also allowed to appeal with the Reviewable committees (zonal or central offices). This maintains transparency in the claim process which ensures that the satisfaction of a policyholder is always at the forefront.
IRDAI and Government of India have established the Insurance Ombudsman scheme for settling grievances arising between an insured individual and the insurance provider. As such, claims that have been rejected and delayed by an insurer, disputes around premium payments, and other issues regarding a purchased policy can be brought before these ombudsmen, who address the complaints with no added costs.
Requirements for filing and settling a claim are:
These forms are required to satisfy the insurer about the veracity of the claims from the policyholder. For deaths arising due to accidents, the claimants also have to furnish the details mentioned above for filing a claim to procure death benefits.
All claim forms and the NEFT form, are available for download on the official website of LIC.
A prospective buyer for this plan has to make sure that they are getting the best out of their investments. To ensure this, the buyer can choose an appropriate option out of the following:
The cover amount being offered to the buyer can be from a minimum of Rs. 50,000, with no upper limit to the plan. The assured sum should, however, be a multiple of Rs. 5,000.
Once, the selection is made, and the customer is happy with it, the premium payment can be made via the online portal or at the dedicated cash counter. Even though the plan can be purchased through either of these modes, if the buyer is tech-savvy, then it is better to go with the online mode, as the premium doesn’t carry additional charges that are involved with the offline mode.
Documents required to purchase LIC single premium policies are:
The best and most attractive quality about single premium policies is the fact that the buyer has to make only one premium payment, which reduces the hassle that is involved around keeping up with due dates for renewal or grace periods.
It is a wise choice to compare plans online before settling for a specific option, as there are many suitable insurance plans online with added investment opportunities.
Ans. A prospective buyer has the facility of making a premium payment within the online portal of the insurer, LIC. Apart from that, LIC does have existing arrangements with certain banks and service providers (select cities) that have been authorised to collect premium payments on their behalf.
These are HDFC Bank, ICICI Bank, BillDesk.com, Citibank, Corporation Bank, Timesofmoney.com, Federal Bank, UTI Bank, Bank of Punjab, and BillJunction.com.
Ans. Offline payments can be made through:
Ans. The amount that is paid to the policyholder if the plan is discontinued in the midst of the plan tenure or surrendered to the insurer. The plan would attain its surrender value only if the premium has been paid in full. And if the policy is of the participating kind, then the policyholder is also awarded bonuses.
Surrender value can be calculated using this formula: Surrender value factor multiplied by assured sum plus total bonus.
Ans. The policyholder can register on the online portal of LIC and can then receive regular updates about the plan. Conversely, there is also a way to track the status of the plan through SMS updates. This reduces the hassle of going back to the online portal and manually check the status regularly.
The policyholder has to make sure to keep a note of the policy number and other required details at all times. They might be asked to furnish these details time and time again.
Ans. If the policyholder is not very well-versed with technology and would rather prefer knowing the status of the insurance policy by authorised LIC personnel, then they can visit an official LIC branch or office.
Ans. This plan is ideal for investors that have some dispensable income and wish to provide financial protection to their dependents in case of their untimely demise while making sure that their investment accrues returns that can be enjoyed if they survive beyond the term of the plan.
Risk-averse investors are often advised to invest in these plans as they are safer in comparison to other investment cum insurance plans.
Ans. Yes, LIC does have a few insurance plans specifically catering to NRI investors.