Single Premium Endowment Plan (Plan No. 817)

Single Premium Endowment Plan

Single Premium Endowment Plan (Plan No. 817)

LIC's Single Premium Endowment Plan is a savings cum protection plan. The plan provides financial protection against death during the policy term with the provision of payment of lumpsum at maturity on survival. This plan also takes care of liquidity needs through its loan facility. 

Features

• Single Premium Endowment Plan
• Life risk cover for the life insured
• Savings Oriented Plan
• Loan facility available after completing one policy year
• Moderate Premium, high bonus rate

Eligibility Conditions

Minimum age at entry	90 days
Maximum age at entry	65 years
Minimum Term	10 years
Maximum Term	25 years
Minimum age at maturity	18 years
Maximum age at maturity	75 years
Minimum sum assured	Rs 50,000.00
Maximum sum assured	No higher limit

Commencement of Risk

In case the age of Life Assured at entry is less than 8 years, risk under this plan will commence either 2 years from the date of commencement or from the policy anniversary coinciding with or immediately following the attainment of 8 years of age, whichever is earlier. 

For those aged 8 years or more, risk will commence immediately.

Tax Benefit

Tax benefit is available u/s 80 C and u/s 10 D.

Please note that sec 80 C tax benefit is limited up-to maximum of 10 % of the sum assured. Since it is a single premium plan, it is not a good tax saving instrument.


For example if someone opts for this plan for sum assured of Rs 1,00,000/- and he/she pays Rs 66,000 as single premium. He/she will only get maximum tax benefit for Rs 10,000/- only (10 % of Sum Assured).

Possible Events during policy duration

On Death before the commencement of risk

If the policy holder dies before the commencement of risk, the nominee will receive the single premium paid (excluding the service tax and extra premium).

On Death after the commencement of risk

If the policy holder dies after the commencement of risk, the nominee will receive following:

1. Basic Sum Assured

2. Reversionary Bonus

3. Final Additional Bonus (if any)

On Maturity

If the policy holder survives the term of the plan, he/she will receive:

1. Basic Sum Assured

2. Reversionary Bonus

3. Final Additional Bonus (if any)

Understand Single Premium Endowment Plan with an example

Mrs. Tagore aged 25 years, buys a single premium endowment plan for sum assured of Rs. 2,00,000/- for 15 years term

Single Premium : 1,27,192/-

Sum Assured     :  2,00,000/-

Tax benefit
She will only get a tax exemption of Rs 20,000/- (10% of sum assured) irrespective of the fact that she is paying premium of Rs 1,27,192/-

On Death

If Mrs. Tagore dies during the policy term, her nominee will receive the sum assured along with the accrued bonuses.

On Maturity

If Mrs. Tagore survives the policy term, she will receive the sum assured along with the accrued bonuses.

Amulya Jeevan II (Plan No. 823)

AMULYA JEEVAN II

Amulya Jeevan II (Plan No. 823)

Amulya Jeevan II is also a pure term insurance plan which is primarily for protection only.  This policy provides high risk coverage at low premiums but there is no maturity value.

The plan provides financial protection to the insured's family and dependent against unfortunate death of the policy holder during the policy term. In case, the policy holder survives the policy term, the insurance policy is terminated without any maturity returns.

The basic difference between Anmol Jeevan II and Amulya Jeevan II is the Sum Assured. Anmol Jeevan II is limited to the maximum sum assured of Rs 24,00,000.00 ( Rupees 24 Lakhs only). Amulya Jeevan II is for the customers who want even higher risk cover.

Features:

• High risk coverage at low premiums
• No maturity returns
• This plan has no surrender value
• Loan cannot be taken against this policy
• Tax benefit u/s 80 C and u/s 10(D)

Eligibility:

Minimum age at entry	18 years
Maximum age at entry	60 years
Minimum Term	5 years
Maximum Term	35 years
Maximum age at maturity	70 years
Minimum sum assured	Rs 25,00,000/-
Maximum sum assured	No higher limit

Double Tax Benefit:

U/S 80 C  : Premiums paid under this plan are eligible for tax rebate u/s 80C

U/S 10(D) : Death claim amount is also tax free u/s 10(D)

Possible Events during policy duration:

On Death

Nominee will get the sum assured immediately

On Maturity

Policy with terminate without any maturity returns

Other Points to consider:

• Double Accidental cover is not available in this policy
• Physically disabled person are not eligible for this policy
• People engaged in high risk work have to pay additional premium

Understand Amulya Jeevan II with an example

Mr. Suresh, aged 30 years takes Amulya Jeevan II policy for himself. He chooses sum assured of Rs 50,00,000/- (Rupees Fifty Lakhs only) for the duration of 20 years. 

The annual premium is Rs 12,850/- (Rupees Twelve Thousand Eight Hundred and Fifty only).

Possible Events

On Death

If Mr Suresh dies during the policy term, his nominee will receive the Sum Assured i.e. Rs 50,00,000/- (Rupees Fifty Lakhs only)

On Survival

If Mr. Suresh survives till the end of policy term, the policy will terminate without any maturity returns.

Anmol Jeevan II (Plan No. 822)

Anmol Jeevan II

Anmol Jeevan II (Plan No. 822)

Anmol Jeevan II is a pure term insurance plan which is primarily for protection only.  This policy provides high risk coverage at low premiums but there is no maturity value.

The plan provides financial protection to the insured's family and dependent against unfortunate death of the policy holder during the policy term. In case, the policy holder survives the policy term, the insurance policy is terminated without any maturity returns.

Features

• High risk coverage at low premiums
• No maturity returns
• This plan has no surrender value
• Loan cannot be taken against this policy
• Tax benefit u/s 80C and u/s 10(D)

Eligibility Conditions

Minimum age at entry	18 years
Maximum age at entry	55 years
Minimum Term	5 years
Maximum Term	25 years
Maximum age at maturity	65 years
Minimum sum assured	Rs 6,00,000.00
Maximum sum assured	Rs 24,00,000.00

Double Tax Benefit

U/S 80 C  : Premiums paid under this plan are eligible for tax rebate u/s 80C

U/S 10(D) : Death claim amount is also tax free u/s 10 (D)

Possible Events during policy duration

On Death

Nominee will get the sum assured immediately

On Maturity

Policy with terminate without any maturity returns

Other Points to consider

• Double Accidental cover is not available in this policy
• Physically disabled person are not eligible for this policy
• People engaged in high risk work have to pay additional premium

Understand Anmol Jeevan II with an example

Mr. Rahul, aged 30 years takes Anmol Jeevan II policy cover on his life. He chooses the Sum Assured of Rs 10,00,000/- ( Rupees Ten Lakhs only) for the duration of 15 years and pays an annual premium of Rs 2,812/- (Rupees Two Thousand Eight Hundred and Twelve only).

Possible Events

On Death

If Mr Rahul dies during the policy term, his nominee will receive the Sum Assured i.e. Rs 10,00,000/- (Rupees Ten Lakhs only)

On Survival

If Mr. Rahul survives till the end of policy term, he will not get any maturity returns and the policy will terminate.

TAX BENEFITS TO CONSIDER WHILE BUYING A LIFE INSURANCE POLICY

TAX BENEFITS TO CONSIDER WHILE BUYING A LIFE INSURANCE POLICY

While buying a life insurance policy one should look for the plan which gives double tax benefit as below:

(I) Under section 80 C

The policy should have section 80 C tax benefit. Under this section, customers get the tax rebate equal to the amount of premium paid in a financial year subject to following conditions:

1. Amount of premium paid in a financial year is not more than 10% of the total sum assured of that insurance policy. i.e if sum assured of an insurance policy is Rs 2 Lakhs, the annual premium eligible for tax rebate u/s 80 C cannot be more than Rs 20 Thousand.
2. Total exemption under section 80 C is within the permissible limit of Rs 1 Lakhs.

(II) Under section 10 D

Under this section, customers get the tax free maturity amount. If section 10 D tax benefit is not the part of an insurance policy then the maturity amount is clubbed with other incomes of the beneficiary in that year. He/She will therefore pay the taxes prevailing at that time.

Conclusion: 

1. It is always advisable to take a regular premium policy rather than a single premium policy. It is because you will not get the complete tax benefit in single premium policies since it's premium is always higher than 10% of the sum assured.

2. Before buying a policy always check that the policy gives tax free maturity under section 10 D.

New Money Back Plan - 20 Years

New Money Back Plan - 20 Years

New Money Back (Plan No. 820) - Term 20 Years

This is a money back plan which provides periodical returns of survival benefits during the policy term. In this plan 20% of the sum assured is payable at the end of 5th,10th and 15th year of the policy term, and the balance of 40% plus the accrued bonuses becomes payable at the 20th year.

In the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which have already been paid. Similarly, the bonus is also calculated on the full sum assured. 

Features

• Survival Benefits are paid periodically
• Balance of the sum assured along with accrued bonuses is paid at the end of policy term 
• Premium payment term is only 15 years
• Double Tax Benefit u/s 80 C and u/s 10 D
• Death risk cover is 125% of the basic sum assured
• Additional accidental sum assured
• Loan is available against this plan

Eligibility Conditions

Minimum age at entry	13 years
Maximum age at entry	50 years
Policy Term	20 years
Premium Payment Term	15 years
Maximum age at maturity	70 years
Minimum sum assured	Rs 1,00,000/-
Maximum sum assured	No higher limit

Periodical Survival Benefits

Year of Policy Term	Percentage of Sum Assured
5th year	20% of Sum Assured
10th year	20% of Sum Assured
15th year	20% of Sum Assured
20th year	40% of Sum Assured + Accrued Bonuses

Double Tax Benefit

U/S 80 C  : Premiums paid under this plan are eligible for tax rebate u/s 80C

U/S 10(D) : Maturity Returns / Death claim amount is also tax free u/s 10 (D)

Possible Events during Policy Term

On Survival

If the policy holder survives the policy term, he/she will receive survival benefits as below:
5th year    - 20% of Sum Assured
10th year  - 20% of Sum Assured
15th year  - 20% of Sum Assured
20th year  - 40% of Sum Assured + Accrued Bonuses

On Death

If the policy holder dies during the policy term, his/her nominee will receive:

1. 125% of the Basic Sum Assured or 10 times the annual premium (whichever is higher)
2. Simple Reversionary Bonus
3. Final Additional Bonus (if any)

The periodical survival benefits which have already been paid will not be deducted.

On Accidental death

If during the policy term, the policy holder dies due to an accident, his/her nominee will get following:

1. 125% of the Basic Sum Assured or 10 times the annual premium (whichever is higher)
2. Additional Accidental Sum Assured
3. Simple Reversionary Bonus
4. Final Additional Bonus (if any)

The periodical survival benefits which have already been paid will not be deducted.

Understand New Money Back Plan - 20 Years with an example

Mrs. Kapoor is a 25 years old working woman. She takes LIC Money back plan - 20 years for the sum assured of Rs 2,00,000/- (Rupees Two Lakhs only). She is required to pay annual premium of Rs 15,667.00 (Rupees Fifteen Thousand Six Hundred and Sixty Seven only) for 15 years.

Survival Benefits
5th year   - Rs 40,000.00 (20% of 2,00,000/-)
10th year  - Rs 40,000.00 (20% of 2,00,000/-)
15th year  - Rs 40,000.00 (20% of 2,00,000/-)
20th year  - Rs 80,000.00 (40% of 2,00,000/-) + Accrued Bonuses.

On Death
If Mrs. Kapoor dies during the policy term, her nominee will receive 125% of sum assured along with the accrued bonuses. Any survival benefit which has been already paid will not be deducted.

On Accidental Death
If Mrs. Kapoor dies due to an accident, during the policy term, her nominee will receive the 125% of Sum assured + Additional accidental Sum assured + Accrued bonuses. 
Any survival benefit which has been already paid will not be deducted.