LIC New Endowment Plan

Under LIC New Endowment Plan, an individual invests regularly for a selected period chosen between 12 to 35 years. Additionally, for the plan, a sum assured of more than INR 1 lakh has to be selected by the buyer. On completion of the premium paying term, the individual receives a Maturity Benefit which is a lumpsum comprising of the basic sum assured and accrued bonus.

In case on death of the insured, during the policy term his nominee receives the Death benefit that is a lumpsum amount called sum assured on death including reversionary bonuses. The sum assured on death paid is a higher value among;

1. Basic Sum assured or
2. 10 times of the yearly premium amount paid till death

Note that the death sum assured paid > 105% of the premiums paid till death Plus Accrued bonuses.

Illustration:

Consider,

Person’s age: 25
Sum assured: Rs. 25 lakhs
Premium Paying Term: 35 years
Policy term: 35 years

A 25 year old individual pays a premium of Rs 5800 per month for a policy term of 35 years. On completion of the policy paying term, he will receive a lumpsum of Rs. 60,00,000 as the maturity amount which is inclusive of accrued bonus(consider 4% reversionary bonus every year).

In-case on death of the individual before the end of policy term, his nominee will receive death benefit lumpsum which includes accrued bonus and is of a higher valuation from basic sum assured or total annual premium paid till his death.