LIC Single Premium Endowment Plan

LIC Single Premium Endowment Plan is a non-linked, participating, individual, life assurance savings plan. Being a single premium payment plan, the policyholder needs to pay the premium in a lump sum at the time of policy issuance. The plan is a great way of securing attractive savings and protection benefits.

When an individual purchases the LIC Single Premium Endowment policy, the family remains financially protected upon the death of the life assured during the policy term. In case the life assured survives the selected policy term, he/she will receive a lump sum amount with the applicable bonuses. The policyholder can also avail of loans to fulfil the liquidity needs during the policy term.

LIC plan 917 is a one-time investment plan that offers policyholders multiple options to enhance the base policy coverage and benefits. The following optional benefits are available under the LIC Single Premium Endowment plan to gain maximum coverage:

Rider Benefits

The policyholder can avail of the following two optional riders under the LIC Single Premium Endowment plan by paying an additional premium (When a rider is added to the 917 LIC plan, the base policy coverage is enhanced):

• LIC Accidental Death and Disability Benefit Rider: The policyholder can opt for this rider only at the time of inception of the policy. When a policyholder opts for this rider, on the death of the life assured due to an accident, the nominee receives the accident benefit rider sum assured in a lump sum.
  In case of an accidental disability arising due to an accident (within 180 days from the date of the accident), the life assured receives ‘Accident Benefit Sum Assured’ in equal monthly instalments spread over 10 years.
• LIC New Term Assurance Rider: The policyholder can avail of this rider only at the time of policy inception. When you opt for the LIC New Term Assurance Rider upon the death of the life assured during the policy term, the nominee receives ‘Term Assurance Rider Sum Assured’.

Learn more about how LIC riders work.

Settlement Option for Maturity Benefit

Choosing this option allows the policyholder to receive the maturity benefit in instalments over a period of 5, 10, or 15 years instead of a lump sum amount. The instalments are paid in advance at the selected mode of payment, and the minimum instalment amount is as follows:

Receive Death Benefit in Instalments

The policyholder can choose to receive the death benefit in instalments over a period of 5, 10, or 15 years instead of a lump sum amount. The instalments are paid to the nominee at the instalment payment interval in the minimum amount as:

To understand the functioning of the LIC Single Premium Endowment policy, we have prepared an example in different scenarios.

Say, Rakesh, a professional advisor, buys a LIC Single Premium Endowment policy at the age of 32 for a sum assured of Rs. 3,00,000 and a policy term of 20 years. While buying the plan, the current tax is 4.5%. Hence, Rakesh pays a total of Rs. 1,55,550 + GST of Rs. 7,000 = Rs. 1,62,550.

Case I: Rakesh dies after 10 policy years

The nominee receives the death benefit under the LIC Single Premium Endowment plan in the following way:

Death Benefit = Sum Assured + Simple Reversionary Bonus + Final Additional Bonus

• Sum Assured = Rs. 3,00,000
• Let’s assume the simple reversionary bonus declared under the policy is Rs. 45 per 1000 sum assured.
  Hence, the total simple reversionary bonus for 10 years = Rs. 45 X 300 X 10 = Rs. 1,35,000
• Assume a one-time final additional bonus of Rs. 30 per 1000 sum assured is added. Hence, final additional bonus = Rs. 30 X 300 = Rs. 9,000

The total death benefit received by the nominee = Rs. 3,00,000 + Rs. 1,35,000 + Rs. 9,000 = Rs. 4,44,000.

Case II: Rakesh survives the whole policy term of 20 years

Rakesh receives the maturity benefit under the LIC Single Premium Endowment plan in the following way:

Maturity Benefit = Sum Assured + Simple Reversionary Bonus + Final Additional Bonus

• Sum Assured = Rs. 3,00,000
• The simple reversionary bonus declared for 20 years = Rs. 45 X 300 X 20 = Rs. 2,70,000
• Final additional bonus = Rs. 30 X 300 = Rs. 9000

The total maturity benefit received by Rakesh = Rs. 3,00,000 + Rs. 2,70,000 + Rs. 9,000 = Rs. 5,79,000.

* It is vital to note that the bonus declared every year may fluctuate and cannot be determined in advance. The above representation is to give you an idea of how the bonuses are calculated at the time of policy claimed for maturity or death.

Suicide committed within a specific period prevents the nominee from gaining the specified benefits under the LIC Single Premium Endowment Plan. The nominee receives the following death benefit:

If the life assured commits suicide at any time within 12 months from the date of commencement of risk, the LIC Single Premium Endowment plan shall be considered void. Under such conditions, the nominee receives an amount higher of:

• 90% of the single premium for the base policy (excluding any taxes)
• Surrender value available on the date of death