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  • LIC Limited Premium Endowment Plan

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
    • Choose between annual and monthly premium payment options

    The Life Insurance Corporation of India (LIC) offers a diverse range of policies for its customers. Among the different types of policies in the company’s lineup, LIC’s Limited Premium Endowment Plan is a participating non-linked insurance plan that offers a combination of both death and maturity benefits. As the name implies, this is a simple endowment plan and it comes with multiple rider options. With this plan, policyholders can also meet their liquidity needs by availing the loan option.

    Eligibility for LIC’s Limited Premium Endowment Plan

    People who meet the following eligibility criteria can apply to LIC’s Limited Premium Endowment Plan:

    • The applicant must be an adult who has completed at least 18 years of age.
    • The maximum maturity age of the policyholder must not be more than 69 years in case of a 12-year policy term and an 8-year premium paying term.
    • The maximum maturity age of the policyholder must not be more than 74 years in case of a 12-year policy term and a 9-year premium paying term.
    • The maximum maturity age of the policyholder must not be over 75 years in all other cases.

    Sum assured options

    Minimum sum assured option Rs.3 lakh
    Maximum sum assured option No limit (the sum assured will be in multiples of Rs.10,000)

    Features of LIC’s Limited Premium Endowment Plan

    Some of the key features of LIC’s Limited Premium Endowment Plan can be listed as follows:

    • This policy is available in three different policy terms - 12 years, 16 years, and 21 years.
    • This policy is available in two different premium paying terms - 8 years and 9 years.
    • Premium for this policy can be paid on a yearly, half-yearly, quarterly, or monthly basis. If the monthly payment option is chosen, premium payment can be done only through ECS (electronic clearance service).
    • A grace period of 30 days is available from the date of expiry for the payment of premiums. For monthly premium payment options, the grace period is limited to 15 days.
    • If the premium payment is not made within the grace period, the policy will lapse.
    • A lapsed policy can be revived within 2 years from the date of last unpaid premiums subject to approval from the company.
    • If at least two years of premiums are paid and the subsequent premiums are stopped, the policy shall become a paid-up policy and it is eligible to receive some of the paid-up premium amount.
    • A policy shall not accrue any benefits after becoming a paid-up policy. Also, riders cease to apply in paid-up policies.
    • If at least two years of premiums are paid, the policy can be surrendered in exchange for some benefits.
    • Once the policy has acquired surrender value, policyholders can avail loan from the policy subject to certain terms and conditions.
    • There is a 15-day cooling-off period for policyholders to review the terms of this life cover. If the terms and conditions are not satisfactory, it can be returned to the company without incurring any charge.
    • For the premium amount paid, policyholders can claim income tax relief as per Section 80C of the Income Tax Act.

    Benefits of LIC’s Limited Premium Endowment Plan

    Since this is an endowment policy, the benefits available under this policy can be segmented into death benefit and maturity benefit. The benefits available under this cover are given as follows:

    Type of benefits Extent of Coverage
    Death benefit (in case of the death of the policyholder within the policy term) The ‘Sum Assured on Death’ as mentioned in the policy schedule will be paid to the dependents of the policyholder. It also includes reversionary bonuses and final additional bonus. (The sum assured shall be at least 10 times the annualised premium amount paid by the policyholder. This benefit shall not be less than 105% of all the premiums paid by the policyholder.)
    Maturity benefit (after the successful completion of the policy term) The ‘Sum Assured on Maturity’ as mentioned in the policy schedule including the simple reversionary bonus and the final additional bonus will be paid to the policyholder.
    Rider policies (add-on covers)
    • LIC’s Accidental Death and Disability Benefit Rider
    • LIC’s New Term Assurance Rider
    (The sum assured for rider policies cannot exceed the basic sum assured.)

    Exclusions of LIC’s Limited Premium Endowment Plan

    One of the major exclusions to be noted under this policy is the death of the policyholder due to suicide. If the policyholder commits suicide within the policy term, the policy will become void. The following conditions apply to LIC’s Limited Premium Endowment Plan in case of suicide:

    • In case of suicide within 12 months from the date of commencement of the policy, the company has no legal liability to honour the sum assured claim as given in the policy schedule.
    • In case of suicide within 12 months from the date of commencement of the policy, the company will return up to 80% of the premiums paid by the policyholder to his/her dependents.
    • If the life assured commits suicide within 12 months from the date of policy revival, a maximum of 80% of the premiums paid towards the policy will be returned to his/her dependents.

    Claim Procedure for LIC’s Limited Premium Endowment Plan

    The claim procedure for this policy begins with intimating the company following an event that may result in a claim. Since this is an endowment plan, both death and maturity claims apply to this policy.

    Death claims

    In case of death claims, the dependents of the policyholder must inform the company about the claim. The following list of documents must be submitted to the company while filing for the claim:

    • Duly filled claim form
    • Original policy document
    • Death certificate
    • Documentary proof of age
    • Medical certificate (if required)
    • Any other document that may be requested by the company

    Once these documents are submitted, the company will verify the validity of these documents and communicate the acceptance or rejection of the claim. In case of rejection, the reason for rejection will be given to the applicant. Once the claim is accepted, the company will provide the settlement amount within a reasonable time.

    Maturity claims

    Maturity claims are payable upon the successful completion of the policy term. The branch office typically sends out the discharge form about two months before the date of completion of the policy. The policyholder must send the duly filled discharge form along with the policy document to the branch office. In case of money back policies, if the maturity amount is less than Rs.60,000, there is no need to submit the discharge form at the end of the policy term. Upon receival of these documents, the company will provide the settlement amount to the policyholder.

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