LIC’s New Endowment Plus is a unit linked assurance plan (Plan No.835), which offers investment-cum-insurance during the term of the policy.
- The Policyholder can choose the amount of premium he/she desires to pay, depending on which Policyholder will get the equivalent level of cover.
- Each premium paid by the Policyholder shall be subject to Premium Allocation charge. The allocated premium will be utilized to purchase units as per the selected fund type.
- The Policyholder’s Fund Value will be subject to deduction of charges specified in Para 3 of this circular. Units will be allotted and cancelled based on the Net Asset Value (NAV) of the respective fund applicable to the date of allotment / cancellation.
- There is no Bid-Offer spread (both the Bid price and Offer price of units will be equal to NAV). The NAV will be computed on daily basis and will be based on the investment performance and Fund Management Charges (FMC) of each fund type.
ELIGIBILITY CONDITIONS AND FEATURES:
For Basic Plan
- a) Basic Sum Assured: (10* Annualized Premium) or (105% of the total premiums paid), whichever is higher.
- b) Minimum Premium: Mode Amount Yearly Rs. [20,000] Half-Yearly Rs. [13,000] Quarterly Rs. [8,000] Monthly (ECS) Rs. [3,000]
- c) Maximum Premium: No limit Annualized Premiums shall be payable in multiple of Rs. 1,000 for all modes other than ECS monthly. For monthly (ECS), the premium shall be in multiples of Rs. 250/-
- d) Minimum Entry Age: [90] Days (completed)
- e) Maximum Entry Age: [50] years (nearest birthday)
- f) Policy Term : [10 to 20] years
- g) Premium Paying Term: Same as Policy Term
- h) Minimum Maturity Age: [18] years (completed)
- i) Maximum Maturity Age: [60] years (nearest birthday) Age at entry for the policyholder is to be taken as age nearest birthday except for the minimum age at entry i.e. 90 days.
For LIC’s Linked Accident Benefit Rider
- a) Minimum Entry Age: [18] years (completed)
- b) Maximum Entry Age: [55] years (nearest birthday)
- c) Maximum Maturity Age: [60] years (nearest birthday)
- d) Minimum Accident Benefit Sum Assured: Rs.10, 000/-
- e) Maximum Accident Benefit Sum Assured: 10 times of Annualized Premium subject to the maximum aggregate limit of Accident Benefit Sum Assured under all policies including policies with in-built Accident Benefit taken with Life Insurance Corporation of India under individual policies as well as group policies on the same life shall not in any event exceed Rs.100 lakhs of Accident Benefit Sum Assured
Accident Benefit Sum Assured shall be in multiples of Rs. 5000/- only
Date of Commencement of Risk: In case the age at entry of the Life Assured is less then 8 years, the risk under this plan will commence either one day before the completion of 2 years from the date of commencement of policy or one day before the policy anniversary coinciding with or immediately following the completion of 8 years of age, whichever is earlier. In case the age at entry of Life Assured is 8 years or more, risk will commence immediately.
Date of Vesting (Applicable only if the Life Assured is below 18 years on the date of commencement of policy): If the policy is inforce and the Life Assured is alive on the vesting date and if a request in writing for surrendering the policy has not been received by Corporation before such vesting date from the person entitled to the policy moneys, this policy shall automatically vest in the Life Assured on such vesting date i.e. on the policy anniversary coinciding with or immediately following the completion of 18 years of age and shall on such vesting be deemed to be a contract between the Corporation and the Life Assured..
Other details of this plan are as follows.
INVESTMENT FUND TYPES:
Unit Fund: The allocated premiums will be utilized to buy units as per the fund type opted by the Policyholder out of the four fund types options available. Various types of fund options and broadly their investment patterns are as under:
| Fund Type | Investment in Government / Government Guaranteed Securities / Corporate Debt | Short-term investments such as money market instruments | Investment in Listed Equity Shares | Details and objective of the fund for risk /return | SFIN No. |
| Bond Fund | Not less than 60% | Fund Not more than 40% | Nil | Low Risk | ULIF001201 114LICNED +BND512 |
| Secured Fund | Not less than 45% | Not more than 40% | Not less than 15% & Not more than 55% | Steady Income -Lower to Medium risk | ULIF002201 114LICNED +SEC 512 |
| Balanced Fund | Not less than 30% | Not more than 40% | Not less than 30% & Not more than 70% | Balanced Income and growth – Medium risk | ULIF003201 114LICNED +BAL 512 |
| Grow th Fund | Not less than 20% | Not more than 40% | Not less than 40% & Not more than 80% | Long term Capital growth – High risk | ULIF004201 114LICNED +GRW512 |
The Policyholder will have the option to choose any ONE of the above 4 funds to invest his premiums initially and at the time of switching
Discontinued Policy Fund: The investment pattern of the Discontinued Policy Fund shall have the following asset mix:
- Money market instruments: 0% to 40%
- Government securities: 60% to 100%
Computation of NAV: The NAV of all the five segregated funds i.e. Bond Fund, Secured Fund, Balanced Fund, Growth Fund and Discontinued Policy Fund will be computed on daily basis and will be based on investment performance, Fund Management Charge of each fund type and shall be computed as under:
(Market value of investment held by the fund) + (Value of Current Assets) – (Value of Current Liabilities & Provisions, if any) / (Number of Units existing on Valuation Date (before creation / redemption of Units))
Where, Valuation Date is the date of calculation of NAV. On the date of launch the NAV under all funds shall be Rs.10/-.
CHARGES AND FREQUENCY OF CHARGES:
Premium Allocation Charge: This is the percentage of the premium appropriated towards charges from the premium received. The balance known as allocation rate constitutes that part of the premium which is utilized to purchase units for the policy.
The allocation charges are as below:
| Premium Allocation | Charge |
| 1 st Year | 7.50% |
| 2 nd to 5 th Year | 5.00% |
| thereafter | 3.00% |
Mortality Charge: Mortality Charge is the cost of Life Insurance cover and this will be taken at the beginning of each policy month by cancelling the Policyholder’s Fund Value proportionately. The monthly charges will be one twelfth of the annual Mortality Charges.
This charge shall depend upon the Sum at Risk i.e. the difference between the Basic Sum Assured in case of inforce policies or Paid-up Sum Assured in case of policy is paid-up and Policyholder’s Fund Value as on the date of deduction of charge, after deduction of all other charges, and shall be deducted only if, the Basic Sum Assured/Paid-up Sum Assured, whichever is applicable, is more than the Policyholder’s Fund Value as on the date of deduction.
Where, Basic Sum Assured is (10 * Annualized Premium) or (105% of total premiums paid), whichever is higher. The total premiums paid shall be reckoned as on date of deduction of Mortality Charge.
In case where the Policyholder converts the policy into paid-up policy, the Mortality Charge in respect of Sum at Risk under a paid-up policy shall be deducted from the following policy month.
Mortality Charges, during a policy year, will be based on the age nearer birthday of the Life Assured as on the policy anniversary coinciding with or immediately preceding the due date of cancellation of units and hence may increase every year on each policy anniversary. Further, this charge shall also depend on health, occupation and lifestyle of the Policyholder.
The annual Mortality Charge per Rs. 1,000/- Sum at Risk for standard lives is given in Annexure I.
The Class I extra charge for Life Cover shall be 25% of the Mortality charge for standard lives. Charge for higher EMR shall be multiples of the Class I extra charge as applicable in other plans. This extra charge will be included in the Mortality charges.
Accident Benefit Charge: This is the charge to cover the cost of LIC’s Linked Accidental Death Benefit Rider (UIN:512A211V01), if opted for, levied at the beginning of each policy month by cancelling appropriate number of units out of the Policyholder’s Fund Value. A level annual charge shall be at the rate of Rs. 0.40 per thousand Accident Benefit Sum Assured per policy year. If the Life Assured is engaged in police duty in any police organization other than paramilitary forces and opted for this cover while engaged in police duty,
BENEFITS:
- Benefits payable on death: On death of the Life Assured before the stipulated Date of Maturity provided policy is inforce, then,
- On death before the Date of Commencement of Risk: An amount equal to the Policyholder’s Fund Value shall be payable.
- On death after the Date of Commencement of Risk: An amount equal to the higher of Basic Sum Assured or Policyholder’s Fund Value shall be payable. Where, Basic Sum Assured is (10 * Annualized Premium) or (105% of the total premiums paid), whichever is higher.
- The liability shall be booked immediately on the date of receipt of intimation of death with death certificate. Policy Administration charge, Mortality charge, Accident Benefit charge, and service Tax their on recovered subsequently to the date of death shall be paid back to the nominee or beneficiary along with death benefit.
- Benefits payable on maturiy: On Life Assured surviving the stipulated date of maturity, an amount equal to the Policyholder’s Fund Value is payable. The maturity benefit can be payable either as an lumpsum amount on maturity or in equal instalments if settlement option is opted for as mentioned in Para 12(D) below.
- Optional Benefit:
- LIC’s Linked Accidental Death Benefit Rider (UIN:512A211V01): LIC’s Linked Accidental Death Benefit Rider can be opted for at any time within the policy term subject to minimum outstanding policy term of 5 years. Wherever this rider has been opted for under this plan, the Accident Benefit cover will be available till the date of Maturity, provided the Policy is inforce as on date of accident. This rider will not be available under the policy on the life of minors, during minority. However, this rider will be available from the policy anniversary following completion of age 18 years on receipt of specific request, if found eligible as per the underwriting rules of the Corporation. Subject to as stated above, under an inforce policy, the LIC’s Linked Accidental Death Benefit Rider can be opted for at any policy anniversary within the policy term subject to minimum outstanding policy term of 5 years. If this benefit is opted for, an additional amount equal to Accident Benefit Sum Assured is payable on death due to accident, provided the rider is inforce at the time of accident. If there be more policies than one and if the total Accident Benefit Sum Assured exceeds Rs.100 lakhs, the benefit shall apply to the first Rs.100 lakhs Accident Benefit Sum Assured in order of date of policies issued. Whenever this Rider is opted for, the Accident Benefit Charges, as specified in Para 3.(III) will be deducted at the beginning of each policy month during the policy term. Under an inforce basic policy, the Policyholder has the option to cancel this rider at any time during the policy term. However, once the rider is cancelled, it can’t be re-opted during the policy term. In case the basic policy is not inforce, this Accident Benefit cover shall terminate and no further charges for this Rider shall be deducted. However, the Rider may be revived along with the basic policy during the revival period but not in isolation.
ADDITIONAL FEATURES:
- Switching: The Policyholder can switch between any fund types during the policy term. On switching the entire amount is switched to the new Fund opted for. Within a given policy year, 4 switches will be allowed free of charge. Subsequent switches shall be subject to a Switching Charge of Rs.100 per switch. On receipt of the Policyholder’s valid application for a switch from one fund type to another, the Policyholder’s Fund Value after deducting Switching Charge, if applicable, shall be transferred to the New Fund type opted for by the
- Top-up: No Top-up premiums shall be allowed under the plan.
- Increase / Decrease in Benefits: No increase/decrease of benefits will be allowed under the plan. Under an inforce policy, the policyholder can, however, cancel the LIC’s Linked Accidental Benefit Rider at anytime during the policy term. However, once the rider is cancelled, the same cannot be subsequently restored.
- Settlement Option: The Policyholder may exercise “Settlement Option” atleast one month prior to the date of maturity.
- MODES OF PREMIUM PAYMENT: Regular premium can be paid throughout the Policy Term either in yearly, half yearly, quarterly or monthly instalments. Monthly installments will be allowed through ECS only. There will be no mode specific charges
- LOANS: No loan facility shall be available under this plan.
- UNDERWRITING: Instructions will be issued separately by Underwriting and Reinsurance Department.
- DAYS OF GRACE: A grace period of 30 days will be allowed for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly (through ECS) premiums. If the death of Life Assured occurs within the grace period but before the payment of premium then due, the policy will still be valid and the death benefits shall be paid after deduction of all the relevant charges, if not recovered.
If the premium is not paid within the days of grace, the benefits shall be paid as per details given in Para 6 under Discontinuance of premiums. - REVIVALS: If due premium is not paid within the Grace Period then a notice shall be sent to the Policyholder as specified in Para 6 above
- BACK DATING: Back dating of policy will not be allowed.
