LIC Plan 814 - Limited Premium Endowment Plan
Secure your family's future with LIC's Limited Premium Endowment Plan. Pay premiums for a limited term and enjoy coverage for the entire policy term.
About LIC Plan 814
The LIC Limited Premium Endowment Plan (814) is a unique plan where the policyholder pays premiums for a limited period, but the coverage lasts for a longer term. This plan provides both life insurance and savings, offering the perfect blend of protection and investment.
Key Features
- Policy Term: Flexible options ranging from 12 to 35 years
- Premium Paying Term: Shorter than the policy term (5, 10, 12, 15, 20 years)
- Death Benefit: Sum Assured on Death (SAD) and Bonuses are paid to the nominee in case of untimely demise of the policyholder.
- Maturity Benefit: Sum Assured on Maturity along with any bonuses earned during the policy term.
- Tax Benefits: Premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act. Maturity benefits are tax-free under Section 10(10D).
- Loan Facility: You can avail a loan against your policy if needed.
Eligibility Criteria
- Minimum Entry Age: 8 years
- Maximum Entry Age: 55 years
- Minimum Sum Assured: ₹1,00,000
- Maximum Sum Assured: No upper limit, subject to underwriting guidelines
Scenario: Mr. Ramu's Experience with LIC Plan 814
Mr. Ramu, a 30-year-old software engineer from Hyderabad, was looking for a way to secure his family’s future while also saving for his retirement. He wanted a life insurance plan that would provide protection to his family in case of his untimely demise and also give him a lump sum amount after a few years. After researching various options, he decided to go with LIC Plan 814 - Limited Premium Endowment Plan. Here’s how it worked out for him:
The Plan
- Policy Term: 20 years
- Premium Paying Term: 10 years
- Sum Assured: ₹10,00,000
- Annual Premium: ₹50,000
- Entry Age: 30 years
How the Plan Worked for Ramu
Premium Payment: Ramu chose a premium paying term of 10 years, meaning he would only have to pay ₹50,000 per year for 10 years, but his coverage would continue for 20 years. This option was appealing because it allowed him to save on premium payments, but he would still be covered for a longer period.
During the Premium Payment Term (First 10 Years): Ramu continued paying ₹50,000 annually for the first 10 years of his policy. He was confident that in case of any unfortunate event, his family would be financially protected.
In Case of Ramu's Untimely Death: After 5 years of paying premiums, Ramu unfortunately met with a fatal accident. Since he had an active LIC Plan 814, his family was entitled to the sum assured of ₹10,00,000 plus any bonuses accumulated during the policy’s active years. His wife, Mrs. Priya, and his two young children were left with financial stability. The death benefit provided them with enough funds to cover daily expenses and future financial needs such as education.
At the End of the 20-Year Term: After completing the premium payments for 10 years, the policy continued for the remaining 10 years. When Ramu’s policy matured after 20 years, his family received the full sum assured of ₹10,00,000, along with any accumulated bonuses that had increased the value of the policy. This lump sum helped his children pursue higher education and secured their financial future.
Additional Benefits:
- Loan Facility: During Ramu's lifetime, if he had faced any financial emergency, he could have taken a loan against the policy, using the cash value of the policy as collateral.
- Tax Benefits: The premiums Ramu paid each year were eligible for tax deductions under Section 80C, and the maturity benefit received by his family was tax-free under Section 10(10D) of the Income Tax Act.
Conclusion:
Ramu’s decision to invest in LIC Plan 814 - Limited Premium Endowment Plan gave him peace of mind. It provided his family with the financial security they needed in case of his untimely demise and helped build a substantial corpus for his children’s future. The tax benefits, loan facilities, and coverage made it an excellent choice for his long-term financial goals.
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