This is a single premium policy that offers a lump sum payout on maturity or death. It is suitable for those who prefer to pay the premium in a single installment.
Benefits of LIC Single Premium Endowment Plan
- Single Premium Payment: This plan requires a one-time lump-sum premium payment at the beginning of the policy term, making it convenient for individuals who prefer not to commit to regular premium payments.
- Death Benefit: In the unfortunate event of the policyholder’s demise during the policy term, the plan provides a death benefit to the nominee. This benefit typically includes the sum assured, any accrued bonuses, and final additional bonuses, if applicable.
- Maturity Benefit: If the policyholder survives the entire policy term, they receive the maturity benefit, which consists of the sum assured, vested bonuses, and final additional bonuses, if any.
- Participation in Profits: The LIC Single Premium Endowment Plan participates in the profits of LIC, and policyholders are eligible for bonuses declared by the corporation. These bonuses enhance the overall returns.
- Loan Facility: After a certain period, policyholders can avail of a loan against the policy’s cash value, providing liquidity when needed.
- Surrender Value: If the policyholder decides to surrender the policy before maturity, a surrender value is paid out, including the cash value and accrued bonuses. However, the surrender value may be lower than the maturity benefit.
- Flexible Premium Payment: While it requires a single premium payment, policyholders can choose the sum assured based on their financial goals and premium-paying capacity.
- Income Tax Benefits: Premiums paid for the LIC Single Premium Endowment Plan are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the maturity amount is usually tax-exempt under Section 10(10D), subject to certain conditions.
- Riders: Policyholders can enhance their coverage by adding riders such as accidental death benefit riders or disability benefit riders for an additional premium.
- Financial Security: The policy provides financial security to the policyholder’s family in case of the insured’s demise and ensures a lump-sum payout upon maturity, helping to meet long-term financial goals.
- Long-Term Savings: It encourages disciplined savings by requiring a lump-sum premium payment, which can be used for various financial needs, such as retirement planning or funding major expenses.