LIC Single Premium Endowment Plan 917
LIC Single Premium Endowment Plan 917 is a participating non-linked savings cum protection plan. Payments for the plan must be paid when it is initially purchased, in a lump sum. In the event of death during policy term, this combination provides cash protection. It also offers a lump sum payment at the end of chosen policy term provided the person survives.
Let’s look at Single Premium Endowment Plan chart:
Age | Min. Age – 90 days Max. Age -65 yrs. |
Policy Term | Min. Term -10 yrs. Max. Term -25 yrs. |
Sum Assured | Min. Sum Assured – Rs. 50,000/- Max. Sum Assured – No Limit (Depend on your income) |
Maturity Age | 18 yrs. (Min.) 75 yrs. (Max.) |
Premium Paying Mode | Single |
Riders (Optional) | a) Accidental Death and Disability Benefit Rider b) New Term Assurance Rider
|
Tax Benefits | u/s 80C up to 10% of SA. |
Maturity Amount | Basic Sum Assured + Accumulated Simple Reversionary Bonus during Policy Term + Final Additional Bonus |
Death Claim (after commencement) | Death Sum Assured + Accumulated Simple Reversionary Bonus till the time of Death + Final Additional Bonus + Rider (if taken) |
Death Claim (before commencement) | Return of single premium without interest. |
LIC Single Premium Endowment Plan details and benefits:
Death Benefit
If the policyholder dies during the term before risk coverage begins. A refund of the single premium paid goes back to them. Taxes, extra charges, and rider payments, if any, don’t return. No interest included.
If the policyholder dies after risk coverage starts. The nominee gets the sum assured. Vested Simple Reversionary Bonuses and Final Additional Bonus also go to them if allowed.
Maturity Benefit
A policyholder will get a maturity benefit given to him at the time of the policy’s maturity. The major factor of Single Premium Endowment Plan policy is that it allows you to receive the “Maturity Benefit,” which will be paid in instalments for 5, 10, or 15 years or in lumpsum amounts as chosen by the policyholder. The policyholder has to inform at least three months before the maturity claim.
Maturity Benefit = Basic Sum Assured + Accumulated Simple Reversionary Bonus Final Additional Bonus (Paid at the time of death or maturity)
Tax Benefits
Under section 80C of the Income Tax Act, 10% of the lump sum amount paid is eligible for Tax rebate u/s 80C are not taxed. Also, the same act says that money received from maturity or death claims is not taxed.
Rider Option
Two optional riders are available under this plan by payment of an additional premium.
• Accidental Death and Disability Benefit Rider
• New Term Assurance Rider
Rebate
LIC Single Premium Endowment Plan 917 offers rebates based on premium paying modes and the high sum-assured rebate that we have chosen.
Sum Assured Rebate:
BASIC SUM ASSURED | REBATE |
Rs. 50,000/- to Rs. 95,000/- | – |
Rs. 1,00,000/- to Rs. 1,95,000/- | 18 % of Sum Assured |
Rs. 2,00,000/- to Rs. 2,95,000 | 25 % of Sum Assured |
Rs. 3,00,000/- and above | 30 % of Sum Assured |
Loan Facility
A loan may be obtained after one year under this plan at any time. 90% of the surrender value is the maximum loan amount available in this plan. Periodically, it will be decided what interest rate will be applied to the policy loan and how it will apply for the full length of the loan.
Surrender Value
During the policy year, the policy can be given up any time. The company will pay the higher of the Surrender Value or the Special Surrender Value when the insurance is returned.
The Special Surrender Value can be reviewed, and the company will decide on it occasionally, as long as IRDAI agrees first. The following is what the Guaranteed Surrender Value can be:
1st year: 75% of the Lum Sum premium
2nd year onwards: 90% of the Lum Sum premium
Free Look Period
Suppose a policyholder is dissatisfied with the terms and conditions of the insurance policy. In that case, they have 15 days from receipt to return it and get a full refund after deducting the proportionate risk premium, expenses incurred on medical examination and stamp duty charges.
LIC Single Premium Endowment Plan Calculation:
Calculation for LIC Single Premium Endowment Plan 917 with Death Benefit.
- Assumed Sum Assured: ₹10,00,000
- Single Premium Amount: ₹1,50,000 (assumed for this example)
- GST Rate: 18%
- Rider Premium: Let’s assume an additional rider premium of ₹10,000 for enhanced coverage.
GST Calculation
- GST on Single Premium: GST=Single Premium ×GST Rate=₹1,50,000×0.18=₹27,000
- GST on Rider Premium: GST on Rider=Rider Premium ×GST Rate=₹10,000×0.18=₹1,800
Total Amount Payable
Total Premium Payable: Total Premium=Single Premium +Rider Premium=₹1,50,000+₹10,000=₹1,60,000
Total GST Payable: Total GST=GST on Single Premium +GST on Rider=₹27,000+₹1,800=₹28,800
Total Amount Payable: Total Amount=Total Premium Total GST=₹1,60,000+₹28,800=₹1,88,800
Death Benefit Calculation
- Death Benefit without Rider:
- If the policyholder dies during the policy term, the family will receive the sum assured.
- Death Benefit: ₹10,00,000
- Death Benefit with Rider:
- If a rider is included (for example, a critical illness or accident benefit rider), the rider may provide an additional payout. Let’s assume the rider provides an additional ₹5,00,000 in case of death.
- Total Death Benefit with Rider:
Total Death Benefit=Sum Assured +Rider Benefit=₹10,00,000+₹5,00,000=₹15,00,000
Summary of Benefits
- Total Amount Payable (including GST): ₹1,88,800
- Death Benefit without Rider: ₹10,00,000
- Death Benefit with Rider: ₹15,00,000
This calculation illustrates how the family would benefit in case of the policyholder’s demise, depending on whether a rider is taken or not.