LIC Limited Premium Endowment Plan

• LIC Limited Premium Endowment policy is a participating plan with limited payment facility. It is a simple life insurance endowment plan with death and maturity benefit.

• Policyholders need to pay premiums only for either 8 or 9 years whereas the policy continues for the chosen term of 12, 16 or 21 years as per the choice of the policyholder.

• On survival of the policyholder until the end of the policy term, the maturity benefit is paid, and the policy comes to an end.

• In case the policyholder dies during the policy tenure, the death benefit is paid to the beneficiary, and the policy comes to an end.

• Policyholders can opt for additional coverage with additional nominal premium charges.

Customers need to meet the following criteria in order to buy LIC’s Limited Premium Endowment Plan.

Entry age - Minimum: 18 years (completed) Maximum

Tax benefits: Premiums paid towards LIC Limited Premium Endowment Plan are eligible to receive tax benefits under Section 80C of the Income Tax Act, 1961. Additionally, maturity benefits and death benefits received against the policy enjoys tax benefits under Section 10(10D) of the Income Tax Act, 1961.

Free-look period: In case policyholder is not satisfied with the terms and conditions of the policy, they have an option to return the same to the insurance company stating the reason for such cancellation. However, such cancellation should be made within 15 days from the date of receipt of the policy document. This period is termed as free-look period. The customer needs to return the original policy document to the insurer, and the company will refund the premium, if paid.

Grace period: Policyholders are given additional time to pay the premium after the premium due date when the insurance policy is in force. LIC Limited Premium Endowment policy offers a grace period of 30 days for policies with yearly, half-yearly and quarterly premium payment mode. 15 days of grace period is provided to the policies with monthly premium payment mode. The policy remains in force during the grace period, and the insurance company is liable to honour the policy claim, if it arises.

Policy revival: In case the life insured fails to pay the due premium within the grace period, the policy is subject to lapse. However, the policyholder has an option to restore a lapsed policy. A lapsed policy can be revived within 2 years from the date of first unpaid premium. The plan can be restored by paying all the due premiums along with interest rate fixed by the insurance company. Paid-up value: If at least two full years premiums have been paid, and the subsequent premiums are not duly paid, the policy shall not be considered void, but shall remain in force as a paid-up policy. The sum assured payable on death under a paid-up policy is reduced to the sum called death paid-up sum assured. Death paid-up sum assured = sum assured on death x (number of premiums paid till date / total number of premiums payable during the premium payment term).

The sum assured on maturity under a paid-up policy shall be reduced to a sum called maturity paid-up sum assured. Maturity paid-up sum assured = sum assured on maturity x (number of premiums paid / number of premiums payable).

Surrender value: Policyholders can surrender the LIC Limited Premium Endowment Plan provided at least two full years' premiums have been paid. The guaranteed surrender value shall be a percentage of total premiums paid excluding extra premiums and premiums paid for riders.

Policy loan: Policyholders can avail loan against LIC Limited Premium Endowment policy, provided the policy has acquired a surrender value. The interest rate charged for such a loan is determined at regular intervals. Up to 80% of the surrender value can be availed as a loan amount.

Riders: Policyholders can avail two optional riders. They include term assurance rider and accidental death and disability benefit rider.

• Term assurance rider: Policyholders can opt for this rider at any time during the premium payment term. The minimum sum assured of the term assurance rider is Rs. 1 lakh and the maximum limit is Rs. 25 lakhs. The benefit coverage is available either before the anniversary of the plan where the age of the life insured is closer to 70 years or within the policy term, whichever is earlier.

• Accidental death and disability benefit rider: Policyholders can opt for this rider within the premium payment term. The minimum sum assured is Rs. 10,000 and the maximum sum assured is Rs. 1 crore under this rider. The benefit coverage is available before the policy anniversary where the age of the policyholder is near 70 years, or before the policy anniversary, whichever is sooner.

If the policyholder, whether sane or insane, commits suicide within 12 months from the date of policy commencement, the insurance company will not entertain any claim under the plan. 80% of the total premiums paid excluding any extra premiums will be paid to the nominee, provided the policy is in force.

In case the policyholder whether sane or insane commits suicide within 12 months from the date of policy revival, 80% of the premiums paid till death or the surrender value, whichever is higher is paid to the nominee. Apart from this, the insurance company is not liable to entertain any claim.