All you wanted to know about LIC’s New Endowment Plan – Table No.914 – Requirements, Benefits, Maturity, ROI

Endowment Plan is always Ever-green and has always been the TOP SELLING PLAN of LIC since the day LIC was formed on 1.9.1956. It has got the Greatest Universal Appeal with Clients age group ranging from 8 to 55 years. The product is Very Transparent, Cost-effective and offer Spectacular Returns in the form of High Bonus and Higher FAB for Several Years. Our Endowment Plan is a Time-tested Product which has withstood Several Financial recessions in India as well as in the World.

From a layman’s perspective LIC’s New Endowment Plan (Table No: 914), is an essential life insurance plan which gives sufficient protection, amid the policy term, to cope up with the untimely death of the bread winner. Where as if the policy matures this arrangement gives a sound lump sum, which can be utilized to satisfy monetary prerequisites like kids’ advanced education, marriage, generation of pension corpus and more.

In its core, this plan incorporates the principles of financial planning by encapsulating the complexities. Moreover this policy is targeted for a more wider age group and their multi various needs in mind. You can buy this policy here.

Technical Details of New Endowment Plan

Criteria Requirement
Age Minimum : 8 years
Maximum : 55 years
Premium Paying Mode Yearly

Half Yearly


Monthly (NACH Only)

Policy Term Minimum : 12 years
Maximum : 35 years
Premium Paying Term (PPT) Same as policy term
Basic Sum Assured 1,00,000 and above (additional sum assured in multiples of 5000 only)
Policy Revival within 2 year from the last unpaid premium date.
Rebate on Premium Mode 2% for Yearly

1% for Half Yearly

Nil for Quarterly & Monthly

Higher Sum Assured (SA) Rebate 0% for 0 to 1,95,000 of SA
2% for 2,00,000 to 4,95,000 of SA
3% for > 5,00,000 SA
Loan facility After 3 years of full premium payment
Surrender possibility Minimum 3 full years of premium payment

Benefits of New Endowment Plan

Death Benefit

If there should be an occurrence of death amid the plan term, given all due premiums have been paid, Sum Assured, characterized as aggregate of “Sum Assured on Death” and vested Simple Reversionary Bonuses and Final Additional bonus (FAB), assuming any, will be payable. Where, “Sum Assured on Death” is characterized as higher of Basic Sum Assured or 10 times of annualized premium. This demise advantage will not be below 105% of all the premiums paid as on date of death.

The premium is defined as the net amount payable by the customer, deducting  administration charge, additional premium and rider premiums, applicable any.

LIC’s Accidental Death and Disability Benefit (AD&DB) Rider

AD&DB Rider is accessible as a discretionary rider by paying an extra premium.

In the event of unintentional (accidental) demise, the Accident Benefit Sum Assured will be payable as lump sum alongside the death benefits stated under the basic arrangement.

In the event of accidental permanent disability emerging because of a mishap, but the policy holder survives, a sum equivalent to the Accident Benefit Sum Assured will be paid as regular scheduled monthly payments spread more than 10 years (meaning 10 years * 12 months = 120 installments) and future premiums for Accident Benefit Sum Assured & premiums for Basic Sum Assured part under the policy agreement, will no longer be payable by the policy holder. Certificates related to the disability has to be submitted to the corporation within 180 days from the date of accident.

Maturity Benefit

Basic Sum Assured, alongside vested basic reversionary bonus and Final Additional bonus, assuming any, will be payable in single amount on Survival as far as possible, provided all due premiums have been paid.

Cooperation in Profits

The plan will take part in benefits of the Corporation and will be qualified for to get Simple Reversionary Bonuses proclaimed according to the experience of the Corporation, assuming the policy is in full power. FAB may likewise be announced in the year, when the policy results into a case either by death or by maturity, provided the plan was in force for certain base term.

Financial Planning using LIC’s New Endowment Plan

There are 4 Corner Blocks of Financial Planning. They are life insurance, income protection, education planning and retirement planning. Life Insurance Corporation of India‘s New Endowment Plan in effect never leaves any of these four stones unturned. In our case studies we are taking the basic protection opted by the policy holder as Rs.10 lakhs. Anyways customer is free to choose any sum assured starting from Rs. 1 lakh to Crores, depending upon the socio economic status and premium paying capacity.

  1. Life Insurance

    The prime motto of any life insurance plan is to protect the family financially from the demise of the policy holder. Life is not replaceable, but a financial help may help the beloved to recover and continue from that impact. In this case study we will discuss how the new endowment plan is equipped to help us in this regard.

    Case Study 1
    Age 30
    Policy Term 20 years
    Basic Sum Assured 10,00,000
    (minimum amount payable by LIC to the family in case of the untimely death of the policy holder before maturity)
    Accidental Death Sum Assured (DAB) 10,00,000 (an additional sum payable by LIC to the family in case of the accidental death of the policy holder before maturity)

    So the policy holders family will be benefited with rupees 10 lakhs in case of a natural death and 20 lakhs in case of an accidental death.

  2. Income Protection

    Life is not a bed of roses, all the time. Difficult situations like accidents or critical illness may arise. How this plan can be helpful in facing such eventualities and helping the victim and their family to face that condition with the help of a continued income. We would resume our case study above to explain .

    Case study 2: Protection of Income (case study 1 continued)
    Case i : Accidental Death
    Amount Payable
    (to nominee)
    20,00,000 + Bonuses if applicable
    (Basic Sum Assured + DAB)
    Expected family income
    (by depositing the settlement amount @ 8% in any bank FD)
    160000 / year
    (approximately rupees 13300/month)
    Case ii : Total Permanent Disability
    Monthly Installment Amount
    (paid by LIC to the victim)
    8,333 (rupees eight thousand three hundred and thirty three)
    Total number of monthly installments 120 (10 years x 12 months)
  3. Education Planning

    One of the challenging milestone in every parent’s life is funding his / her child’s higher education. Life Insurance Corporation puts forward an option called maturity settlement, by which the accumulated sum will be distributed in 2 or more equal installments. Let us look at this procedure by way of a case study.

    Case Study 3
    Parent’s Age 27
    Kid’s Age 0 years (New born)
    Policy Term 18 years
    Basic Sum Assured 10,00,000
    (minimum amount payable by LIC to the family in case of the untimely death of the policy holder before maturity)
    Premium Payable (excluding taxes if any) Yearly : 54889 or

    Half yearly : 27735 or

    Quarterly : 14013 or

    Monthly : 4671

    Average Premium/Day (for Yearly Mode) Rs.153
    Total Approximate Paid Premium 10,11,467 (Rupees ten lakhs eleven thousand four hundred and sixty seven only)
    Approximate Return at Maturity Time Basic Sum Assured : 10,00,000 + Reversionary Bonus : 7,56,000 + F.A.B. : 35,000
    Total Approximate education corpus 17,91,000 (rupees seventeen lakhs ninty one thousand only)
    Here we are opting for settlement option as 4 annual Higher Education installments. Approximate return per year is given for your understanding.
    Higher Education Installment 1
    (@ kid’s age 19)
    4,81,027 (rupees four lakhs eighty one  thousand twenty seven only)
    Higher Education Installment 2
    (@ kid’s age 20)
    4,81,027 (rupees four lakhs eighty one  thousand twenty seven only)
    Higher Education Installment 3
    (@ kid’s age 21)
    4,81,027 (rupees four lakhs eighty one  thousand twenty seven only)
    Higher Education Installment 4
    (@ kid’s age 22)
    4,81,027 (rupees four lakhs eighty one  thousand twenty seven only)

    Advantage therefore is, we are getting tax free returns at regular intervals. Also money is coming when it is most needed; resulting in a more focused spending.

  4. Retirement Planning

    During our previous discussion on the money requirements of old age, we emphasized the need for an early retirement planning and how that is going to reward you with a pension corpus.  If you still did not happen to read that article, we recommend reading it here. Now let us discuss how the new endowment plan can be used to achieve this goal.

    Case Study 4
    Age 24 years
    Policy Term 35 years
    Basic Sum Assured 10,00,000
    (minimum amount payable by LIC to the family in case of the untimely death of the policy holder before maturity)
    Premium Payable (excluding taxes if any) Yearly : 25881 or

    Half yearly : 13083 or

    Quarterly : 6613 or

    Monthly : 2204

    Average Premium/Day (for Yearly Mode) Rs.72
    Total Approximate Paid Premium 9,26,788 (Rupees nine lakhs twenty six thousand seven hundred and eighty eight only)
    Approximate Return at Maturity Time Basic Sum Assured : 10,00,000 + Reversionary Bonus : 16,80,000 +
    F.A.B. : 23,00,000
    (A) Total Approximate retirement corpus
    (@ age 60)
    49,80,000 (rupees forty nine lakhs eighty thousand only)
    Approximate annual pension @ 8%
    (from any standard annuity plan eg. Jeevan Shanthi)
    3,98,400 (life long)

Return on Investment (ROI ) of LIC’s

New Endowment Plan

In order to calculate the ROI for this plan, we need to extend our case study 4 above.

Case Study 5 : ROI(Case Study 4 extended)
(B) Tax Saved Under 80(C)
@10%/annum on total premium paid
(C) Approximate Tax Saved Under 10(10(D))
@20% on total maturity return
Total approximate return (A+B+C)
considering the tax saving part
49,80,000 + 92,678 + 9,96,000 = 60,68,678 (rupees sixty lakhs sixty eight thousand six hundred and seventy eight only)
Return on Investment (ROI) considering the tax savings 554.81%

Why should we buy New Endowment Plan

To sum up, LIC’s New Endowment Plan is highly recommended because of the following reasons

  1. A sound mix of Life protection and Savings.
  2. Low premium and Further reduction in premiums in the form of Mode rebates and Higher Sum Assured Rebates.
  3. Qualified for Bonuses (Reversionary Bonus and Final Additional Bonus) pronounced by LIC.
  4. Higher declared Bonus rates, meaning greater returns.
  5. Minimum 2 times Sum Assured, for accidental deaths through  AB&DB rider.
  6. Premium paid is non taxable under 80(C).
  7. 10 (10(D)) Tax exemption for Maturity Benefits (Normal Death or Accidental Death)
  8. Wide spectrum of term to choose from ( Short Term 12 years to Long Term 35 years)
  9. Suitable as a Child plan or Retirement Corpus Generator plan.

This policy additionally deals with liquidity needs through its loan facility and surrender options. Subsequently, this is an exceedingly prescribed plan among every other one.

For further discussions about the tax freeness of LIC endowment based products and its significance, kindly read this article.

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