Introduction
LIC’s New Endowment Plus is a unit linked non-participating endowment assurance plan which offers investment cum insurance cover during the term of the policy. This plan is specially designed for you to provide a very good combination of protection and long term savings and also provides you greater flexibility to build a better life and realise your dreams.
Table No.
835
Plan Type
unit-linked insurance plan popularly called as ULIPs.
Plan Basis
Individual
Eligiblity Criteria
Entry Age
Minimum :
90 days
Maximum :
50 Years
Maturity Age
Minimum
18 Years
Maximum
60 Years
Basic Sum Assured
10 X annualized premium or 105% of the total premiums paid, whichever is higher
Premium
Minimum
Yearly – Rs. 20,000
Half-yearly – Rs. 13,000
Quarterly – Rs. 8,000
Monthly – Rs. 3,000
Maximum
No limit
Policy Term
10 to 20 years
Policy Paying Term
Same as policy term
Premium Payment Modes
Yearly, Half-yearly, Quarterly & Monthly
Commencement of risk
- If the age of the Life Assured at entry is less than 8 years, the risk will commence either one day before the completion of 2 years (of policy commencement) or one day before the policy anniversary coinciding with or after completion of 8 years, whichever is earlier.
- If the age of Life Assured is 8 years or more at entry, risk will commence immediately.
Top Up
Not Allowedd
Coverage
Death Benefit
- Death Benefit
- Maturity Benefit
- Accidental Death Benefit
Key Features
1.Death benefit
2. Maturity benefit
3. Income tax benefit under section 80 C
4. Fund switching option
5. Partial withdrawal option
6. Policy acquires paid up and surrender value
7. Loans cannot be raised against the policy
8. Opportunity to invest in market instruments
9. Fund of Policyholder is skillfully managed
10. Differentiated fund options for different risk preferences
Policy Benefits
Death Benefit
If the Life Insured dies, before the Risk commencement date: the Fund Value is paid to the nominee.
If the Life Insured dies, after the Risk commencement date: an amount equal to the higher of the following is paid out:
- 10 times the Annualized Premium
- 105% of the total premiums paid
- Fund Value
Risk Commencement Date
- In case the age of the policyholder is less than 8 years at the time of taking the policy – The risk cover benefits will start one day before the completion of 2 years from the policy start date OR one day before the policy anniversary after the policyholder becomes 8 years old, whichever is earlier.
- In case the age of the policyholder is 8 years or more – The risk cover starts immediately.
For better understanding, we have used some examples for the Risk Commencement Date in LIC New Endowment Plus Plan.
Maturity Benefit
If the Life Assured survives the maturity date, an amount equal to the Policyholder’s Fund Value is paid. The maturity benefit is paid either as a lump sum or in equal instalments.
Linked Accidental Death Benefit Rider
LIC’s Linked Accidental Death Benefit Rider can be opted for within the policy term provided the minimum outstanding policy term is 5 years. This rider will be available till maturity date. However, this will not be available on the life of minors. It will be available from the policy anniversary after completion of 18 years of age. If a policyholder opts for this rider, an additional amount equal to accident benefit Sum Assured is paid in the event of death due to accident. Accident benefit charges will be deducted at the start of the policy month. Policyholders have the option to cancel this rider during the policy term. If this rider is cancelled, it cannot be revived during the policy term. If the basic policy is not in force, this rider will stand terminated. While this rider may not be revived in isolation, it can be revived along with the basic policy during the revival period.
- Accident benefit charge: This covers the cost of the accidental death benefit rider at the start of each month by cancelling proportionate number of units from the Fund Value of the policyholder (level annual charge at the rate of Rs. 0.40 per 1000 accident benefit Sum Assured per policy year).
Salient features of the accident benefit rider are listed in the table below:
Minimum entry age 18 years Maximum entry age 55 years Maximum maturity age 60 years Minimum accident benefit sum assured Rs.10,000 Maximum accident benefit sum assured 10 times of annualized premium, subject to aggregate limit of accident benefit Sum Assured (in-built riders taken under both individual and group policies) should not exceed Rs.1 crore
Ideal Plan
This plan is specially designed for you to provide a very good combination of protection and long term savings and also provides you greater flexibility to build a better life and realise your dreams.
Tax Benefits
Like many other Endowment plans of LIC, the New Endowment Plan offers tax benefits to the insured person. Under this benefit, the life insurance paid by the insured person up to Rs. 1,50,000 are eligible for deduction from the taxable income under the Income Tax Act, Section 80 ( C). The maturity benefit is also tax-free under the Income Tax Act, Section 10 ( D) subject to the fulfilment of all terms and conditions.
Loans
There is no loan available under this plan.
Surrender Value
- If the policy is surrendered on or before the expiry of the 5 years’ lock-in period, then the Policyholder’s Fund Value after deducting the Discontinuance Charges, if any, shall be transferred to the Discontinued Policy Fund and the amount shall be paid after 5 years.
- If the policy is surrendered after the expiry of 5 years’ lock-in-period, then the fund value is paid immediately.
Investment Fund Options
| Fund Name | Risk – Return | Investments |
| Bond Fund | Low Risk | At least 60% in Government Guaranteed Securities & Corporate Debt. Rest in other money market instruments and listed shares |
| Secured Fund | Low to Medium Risk – Steady Income | At least 45% in Government Guaranteed Securities & Corporate Debt. Rest in other money market instruments and listed shares |
| Balanced Fund | Medium Risk – Balanced Income & Growth | At least 30% in Government Guaranteed Securities & Corporate Debt. Rest in other money market instruments and listed shares |
| Growth Fund | High Risk – Long term Capital Growth | At least 20% in Government Guaranteed Securities & Corporate Debt. Rest in other money market instruments and listed shares |
The Daily NAVs of these funds are mentioned in the links at the end. You can track how your funds are performing on a daily basis.
Switching
There are 4 free switches allowed in each policy year beyond which there is a charge of Rs. 100 applicable to each switch. Switching is basically moving your investments from one fund to another. In case you want to change the Fund Options you had earlier decided, you can do the Switch
Partial Withdrawal
Partial withdrawal is allowed after the 5th policy anniversary. Partial withdrawal shall be allowed subject to maintaining a minimum balance of:
- From 6th to 10th policy year: 3 annualized premiums or 50% of Policyholders’ Fund Value, whichever is higher
- From 11th to 20th policy year: 3 annualized premiums or 25% of Policyholders’ Fund Value, whichever is higher
Charges in the LIC New Endowment Plus Plan
Premium Allocation Charge
Every time you pay your premiums, this amount is deducted from it before it is invested in the Funds of your choice.
| Policy Year | Charge |
| 1st | 7.5% of premiums |
| 2nd to 5th | 5% of premiums |
| 6th onwards | 3% of premiums |
We now have plans with ZERO Premium Allocation Charges. Click to Compare ULIPs.
Mortality charges – LIC’s Endowment Plus (Plan 835)
Mortality charge is the cost of Life Insurance cover and is deducted at the beginning of each policy month by cancelling the proportionate number of units. The charge shall depend on the Sum at Risk which is equal to the difference between the Basic Sum Assured and policy holders fund value.
Policy Administration Charge
This is the charge for the administrative working of the policy and is deducted by cancellation of units on a monthly basis. The rates mentioned here are for Annual premiums – in case of other modes of premium payments, the charges are marginally higher.
| Policy Year | Charge |
| 1st year | Lower of Rs. 100 or (0.35% x Premium) |
| 2nd year | Lower of Rs. 70 or (0.25% x Premium) |
| 3rd year | 2nd year charge x 1.03 |
| 4th year | 3rd year charge x 1.03 |
| 5th year | 4th year charge x 1.03 |
| 6th year onwards | Rs. 52.17 in 6th, increasing by 3% annually |
In case of modes of payment other than Annual, the following Factor needs to be multiplied to the Annual Mode charges shown above.
| Mode of Payment | Factor |
| Half yearly | 1.6 |
| Quarterly | 2.6 |
| Monthly | 7 |
Fund Management Charge
This is deducted daily as a percentage of the Fund Value. So the NAV reported for the day will be net-off this charge
| Fund Type | Charge |
| Bond, Secured, Balanced & Growth | 0.7% per annum |
| Discontinued Policy Fund | 0.5% per annum |
Discontinuation Charge
In the event that you discontinue your plan before the end of the policy term, this charge will be applicable. This is charged by deducting the units which you hold.
| Year of Discontinuation | Annual premium <= Rs. 25,000 per annum | Annual premium > Rs. 25,000 per annum |
| 1st | Lower of 15% of (Annual Premium or Fund Value) subject to a maximum of Rs. 2,500 | Lower of 6% of (Annual Premium or Fund Value) subject to a maximum of Rs. 6,000 |
| 2nd | Lower of 7.5% of (Annual Premium or Fund Value) subject to a maximum of Rs. 1,750 | Lower of 4% of (Annual Premium or Fund Value) subject to a maximum of Rs. 5,000 |
| 3rd | Lower of 5% of (Annual Premium or Fund Value) subject to a maximum of Rs. 1,250 | Lower of 3% of (Annual Premium or Fund Value) subject to a maximum of Rs. 4,000 |
| 4th | Lower of 3% of (Annual Premium or Fund Value) subject to a maximum of Rs. 750 | Lower of 2% of (Annual Premium or Fund Value) subject to a maximum of Rs. 2,000 |
| 5th onwards | Nil | |
Service Tax on LIC’s New Endowment Plus – ULIP Plan
Service Tax shall be applied only on the charges levied for ULIP plans. Current service tax rate after the implementation of GST is 18% and will be applied on the charges applicable on the policy. As the required units are cancelled from the fund, the customer need not pay any increased premium.
Other Details
Revival Period
If due premium is not paid within the grace period, policyholders will get a notice
Free Look Period
If the policyholder is not happy with the plan, he can cancel the policy within 15 days of receiving the policy documents. This period is called the free-look period. Upon cancellation, the premium paid, net of any applicable expenses would be returned.
Grace Period
| A period of 30 days is allowed for payment of yearly, half-yearly and quarterly premiums while 15 days is the grace period for monthly premiums. If the Life Assured dies within the grace period but prior to premium payment date, the policy will be valid. The death benefits will, therefore, be paid after deduction of all applicable charges. |
Nomination
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Assignment
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What happens if...
You stop paying the premium before 5 years – the policyholder has the following options:
- Pay the due premium(s) within the 30 days from the due date – benefits under the policy shall continue
- Revive the policy at any time within a revival period of two years from the date of discontinuance – Fund Value after deducting the Discontinuance Charge, if any, shall be transferred to the Discontinued Policy Fund.
- Complete withdrawal from the policy without any risk cover: The fund value will be paid after 5 years.
You stop paying the premium after 5 years – the policyholder has the following options:
- Pay the due premium(s) within the 30 days from the due date – benefits under the policy shall continue.
- Revive the policy at any time within a period of two years from the date of discontinuance or up to the date of maturity, whichever is earlier
- Complete withdrawal from the policy without any risk cover – the policy shall be terminated on the date of intimation for complete withdrawal and the balance amount in the Policyholder’s Fund shall be refunded.
- Convert the policy into paid-up policy – Policy will be treated as paid-up policy and no premiums shall be payable thereafter.
Claim Process
Death Claim
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Maturity Claim
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Surrender Claim
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Examples
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FAQs
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