Choosing the right insurance plan is very important, especially if someone wants to keep their family and their future financially safe and planned. People can choose various plans, but repeated premiums can be a headache as well for the insured. In such a situation, it is better if there is only one premium to pay. In the LIC single premium endowment plan, the policyholder will only have to pay the premium once at the very start of the policy term. There will be no payment until its maturity. At the end of the policy, one will get the maturity benefit tagged along with the accrued bonuses, as per the approval of the company. However, it needs to be kept in mind that the premiums of the policy are not completely exempted, only a part of it is.
The benefits that the assured can receive after getting this endowment plan are:
- Maturity benefit: The maturity benefit under this policy can be claimed only after the term of the policy is over. In this policy, the bonuses are accrued every year-end and are paid in the end with the maturity benefit. The maturity benefit is comprised of the basic assured sum of maturity, the reversionary bonuses which are added every year, and participation in profits if applicable.
- Death benefit: In the case of the death of the policyholder, the nominee of the policy will get the death benefit assured sum in a lump sum. The amount that is paid in the case of the death benefit claim is the assured sum in case of death, the accrued reversionary bonuses until that date and the bonus if applicable. In the case of a minor policyholder whose age is below 8 years, they can get death coverage only after two years of the policy initiating date or on reaching 8 years. If the assured in older than 8, then the policy’s death coverage starts immediately.
- Other benefits: In other benefits of the policy, the assured can get a loan and can also surrender the policy If need be. In the case of surrendering, the policyholder will get back 70 percent of the paid premium if done before 1-year completion. Also, the insured will get 90 percent of the surrender value if surrendered after 1 year of completion along with the accrued bonuses. Also, there is a free lock period, which is 15 days, so if the insured cancels the plan, he/she will get the entire premium back.
The major features of the single premium endowment plan are:
- This plan is a simple endowment plan in which the premium will have to be paid only once.
- Only a part of the premium paid will be exempted from tax.
- Death benefit is tax-free, but the maturity benefit is not tax-free.
- Minimum entry age: 90 days
- Maximum entry age: 65 years
- Minimum maturity age: 18 years
- Maximum maturity age: 75 years
- Policy term period: 10 years to 25 years
- Basic assured sum: 50 thousand
- Premium payment: once