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LIC Single Premium Endowment Plan Review

LIC Single Premium Endowment

LIC is the most prominent and successful public sector enterprise in India. Currently LIC is selling 6 Endowment plans. one of which is LIC single Premium Endowment Plan. Lets see some Key features and review about this plan.

  • This is a Single premium Endowment Plan- You have to invest only 1 year.
  • You can choose the Term Between 10 to 25
  • This plan participates in the profit of LIC every year
  • The Maturity benefit is SUM ASSURED+BONUS declared till date.

 

LIC Single Premium Endowment- Review

What is the Net Return you get from this plan?

You can make your money grow to a maximum of 5.20 times in 25 years term. The maximum IRR which can be expected from LIC Single premium Endowment plan is 6.82% Compounded Annually(Calculated with latest bonus declaration as constant for full term and hence this is Not Guaranteed)**.

Example: if you invest Rs.1 lakh today(2015), you can get a return of Rs 5.20 Lakh in the year 2040**.

 

Is the Return on this plan is guaranteed when buying the plan?

No. Since this is a participating endowment plan, the returns of this plan depends on LIC’s profit and Bonus declaration each year. The Initial Guaranteed Amount is Sum Assured only. Each year bonus declared by LIC will be added to the Guaranteed amount. However to enjoy the full benefit of this plan you have to complete the full policy term as taken initially.

Bonus Declared For LIC Single premium Endowment for the year 2013-14 is as below.

LIC SINGLE PREMIUM ENDOWMENT PLAN BONUS FOR 2013-14
POLICY TERMBONUS(PER THOUSAND SUM ASSURED)
10 TO 15 YEARS                                              40
16 TO 20 YEARS45
20 + YEARS50

 

Flexibility\Liquidity of this plan:

This plan can be surrendered any time after buying. However surrender value may be much lower when surrendered before maturity.

 

Do you have tax benefits for this plan?

NO. Since LIC single Premium Endowment Plan is a single term premium payment policy, you cannot enjoy tax benefits of 80c and 10(10d). Hence you have to pay tax for the capital gains received from this policy at the time of maturity.

 

Waytoinsurance score:

2.27/5

 

Why you should Buy LIC single Premium Endowment Plan?

  1. Single premium- No yearly commitment
  2. Safer investment
  3. LIC is a promising brand in India
  4. Have a good Bonus declaration in the past
  5. Simple Plan

Why you shouldn’t Buy LIC single Premium Endowment Plan?

  1. Life Cover is Very less
  2. No tax Benefit
  3. Only Sum assured is Guaranteed
  4. Maturity is Taxable
  5. other savings plans are providing better returns.(NSC, KVP and Sukanya Samruddhi Schemes)

 

**Disclaimer:

This post on LIC single Premium Endowment Plan is just a review of what the plan offers to the customers. We aim at educating ins and outs of this plan. We are trying to simplify the product and make it easy to understand. The Returns provided in this post are for Illustrative purpose only and are Not Guaranteed.  The waytoinsurance score is given by our own metrics of calculation and are no way related to the performance of this plan. All these details are derived from the below links.

http://www.licindia.in/single-premium-endowment-plan-01-parameters-2014.htm

http://www.licindia.in/pages/Bonus2014Annex.pdf

 

you can have a complete and detailed features and illustrations of this plan in the above link.

 

3 Comments

Add a Comment
  1. I want to in rs 50000 for 25 year termthrough plan 817 for my son who is 3 months old. Please give all details about amount I will get on maturity.

    1. I want to invest ₹50000/ for 25 years for my child who is 3 months old. please give me all details of maturity amount. Thanking you in advance

      1. Dear Hardik Patel,

        This is an single premium endowment plan and you can pay only for 1 year.

        If you would like to save for your Kids future, I can suggest you the following plans.

        1. Aviva Young scholar secure
        2. ICICI Prudential Smart Kid
        2. HDFC Life YoungStar Udaan

        Thanks

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