This Article was fact checked and last updated for accuracy on November 9, 2024 by Mani Karthik
Remember when our parents said “LIC policy is must!”?
Well, after returning from Silicon Valley in 2017, I thought I knew better.
Seven years and countless financial planning sessions later, let me tell you why this “boring” plan deserves a second look!
LIC New Endowment Plan – Takeaways 📝
Before we dive into the details, here’s what you really need to know:
- Traditional endowment plan with bonuses
- Minimum policy term of 15 years
- Both maturity and death benefits
- Loan facility available
- Premium paying term equals policy term
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Core Features and Benefits Analysis 📊
| Feature | Details | Real Talk |
|---|---|---|
| Entry Age | 8 to 55 years | Earlier start = Better rates |
| Policy Term | 15 to 35 years | Choose based on goals |
| Minimum SA | ₹1,00,000 | Go higher if possible |
Premium Structure and Calculations 💵
| Age | Annual Premium (1L SA) | Returns Expected |
|---|---|---|
| 25 years | ₹4,320 | 5-6% + Bonuses |
| 35 years | ₹4,890 | 5-6% + Bonuses |
| 45 years | ₹5,760 | 5-6% + Bonuses |
❓ FAQ: Why are the premiums higher than term insurance?
Because unlike your gym membership, this one actually returns your money! It’s insurance + savings combined.
Maturity Benefits Breakdown 📈
Let’s talk real numbers (no marketing fluff here!):
| Policy Term | Total Premium | Expected Returns* |
|---|---|---|
| 15 years | ₹6,00,000 | ₹9-10 Lakhs |
| 20 years | ₹8,00,000 | ₹13-15 Lakhs |
| 25 years | ₹10,00,000 | ₹18-20 Lakhs |
*Including current bonus rates
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Death Benefit and Protection Features 🛡️
| Benefit Type | Amount Payable | Additional Benefits |
|---|---|---|
| Death Sum Assured | Higher of 10x Annual Premium or SA | +Accrued Bonuses |
| Additional Riders | Various Options | Extra Protection |
Loan and Liquidity Features 💰
Because life doesn’t always follow your financial plan:
| Feature | Details | Pro Tips |
|---|---|---|
| Loan Amount | Up to 90% of Surrender Value | Use as last resort |
| Interest Rate | 9.5% p.a. | Better than personal loans |
| Processing Time | 7-10 days | Keep documents ready |
❓ FAQ: Can I surrender the policy early?
Yes, after 3 years – but like leaving a movie halfway, you’ll miss the best parts (and some money too!)
Check FCNR rates for better returns.
Tax Benefits and Advantages 📊
| Section | Benefit Type | Maximum Limit |
|---|---|---|
| 80C | Premium Paid | ₹1.5 Lakhs |
| 10(10D) | Maturity Amount | Fully Exempt |
Comparison with Other Investment Options 📈
| Parameter | New Endowment | PPF | Mutual Funds |
|---|---|---|---|
| Returns | 5-6% + Bonus | 7.1% | 10-12% |
| Risk Level | Minimal | Zero | High |
| Insurance Cover | Yes | No | No |
Pro Tips for Maximum Benefits 💡
Optimal Policy Term:
- Age 20-30: Choose 25-30 years
- Age 30-40: Choose 20-25 years
- Age 40+: Choose 15-20 years
Premium Payment:
- Annual over monthly (5% savings)
- Set up auto-pay
- Link to NRO account for NRIs
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Real-Life Success Stories 🌟
| Profile | Strategy | 20-Year Result |
|---|---|---|
| IT Professional | 25L SA + SIPs | 42L + Market Returns |
| Business Owner | 50L SA + Property | 85L + Assets |
| Salaried | 15L SA + PPF | 28L + PPF Balance |
Verdict: Is LIC New Endowment Plan Worth It? 🎯
Perfect For:
- Conservative investors
- Traditional family goals
- Long-term planning
- Tax-saving needs
Think Twice If:
- Looking for high returns
- Need short-term liquidity
- Have limited budget
- Want pure insurance
❓ FAQ: Final word – Should I invest in this?
Like mom’s cooking vs. restaurant food – not the fanciest option, but reliable and satisfying in the long run!
Citations and References 📚
Official Sources:
- LIC India: https://licindia.in
- IRDAI Guidelines: https://www.irdai.gov.in
- Tax Information: https://incometaxindia.gov.in
Financial Analysis:
- MoneyControl Insurance: https://www.moneycontrol.com/insurance
- Economic Times: https://economictimes.indiatimes.com/wealth/insure
Disclaimer: Returns mentioned are based on current bonus rates and subject to change.
Got questions? Drop them below!
I reply faster than LIC processes claims (which is actually pretty fast now!) 😉
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