What is LIC New Endowment Plan?
LIC New Endowment Plan (Plan No. 714) is a participating, non-linked endowment assurance plan that provides a combination of protection and savings. It offers life cover during the policy term along with a lump-sum maturity benefit at the end of the term. This is one of LIC's most popular and straightforward plans, ideal for those seeking guaranteed savings with insurance coverage.
Key Features
- Pure Endowment: Maturity benefit of SA + Accrued Bonus + Final Additional Bonus (FAB) at end of term
- Bonus: Simple Reversionary Bonus at approximately ₹48 per ₹1,000 SA per year
- Final Additional Bonus (FAB): One-time bonus at maturity for qualifying policies
- Flexible Terms: Choose from 12, 14, 16, 18, 20, 25, 30, or 35 year terms
- Tax Benefits: Premiums qualify for Section 80C deduction. Maturity proceeds tax-free under Section 10(10D) if premium ≤ 10% of SA
- Loan Facility: Loan available after policy acquires surrender value (3 years)
- Child-Friendly: Entry age starts from 8 years — ideal for children's future planning
Eligibility Criteria
- Minimum Entry Age: 8 years (completed)
- Maximum Entry Age: 55 years (nearest birthday)
- Maximum Maturity Age: 75 years
- Minimum Sum Assured: ₹1,00,000
- Maximum Sum Assured: No upper limit
- Policy Term: 12, 14, 16, 18, 20, 25, 30, 35 years
- Premium Payment: Regular — same as policy term
Maturity Benefit
Maturity = Sum Assured + Accrued Bonus + Final Additional Bonus (FAB)
Example: For ₹10,00,000 SA, age 30, 20-year term:
- Sum Assured at maturity: ₹10,00,000
- Accrued Bonus (₹48 × 1000 × 20): ₹9,60,000
- Final Additional Bonus: ~₹2,00,000
- Total Estimated Maturity: ~₹21,60,000
Note: Unlike Jeevan Anand, life cover does NOT continue after maturity payout. All benefits are settled at the end of the policy term.
Death Benefit
- During policy term: "Sum Assured on Death" + Accrued Bonus + FAB (if applicable). Sum Assured on Death = Higher of (10 × Annual Premium) or (1.25 × Basic SA) or (Guaranteed Sum Assured on Death)
- After maturity: No death benefit — life cover ceases at maturity
Premium Payment Modes
- Yearly: Base rate (no loading)
- Half-Yearly: ~51.3% of annual premium
- Quarterly: ~25.8% of annual premium
- Monthly (ECS/NACH): ~8.7% of annual premium
Sum Assured Rebates
- ₹2,00,000 to ₹4,99,999: Rebate of ₹1.50 per ₹1,000 SA
- ₹5,00,000 and above: Rebate of ₹2.00 per ₹1,000 SA
New Endowment Plan vs Other LIC Plans
- vs Jeevan Anand (715): Jeevan Anand provides continued life cover after maturity payout — New Endowment does not. Jeevan Anand has slightly higher premiums. New Endowment offers more term flexibility (12-35 years vs 15-35 years).
- vs Jeevan Labh (736): Jeevan Labh offers limited premium paying terms (pay for fewer years, covered for more) resulting in higher CAGR. New Endowment requires premiums throughout the full policy term.
- vs Money Back Plans (720/721): Money Back plans provide periodic survival benefits during the term, while New Endowment pays the entire maturity amount as a lump sum at the end. Money Back is better for regular income; Endowment is better for corpus building.
Who Should Buy New Endowment Plan?
- Parents looking for a child's future fund (entry age from 8 years)
- Those seeking simple, guaranteed savings with life cover
- Individuals who want flexible term options from 12 to 35 years
- Conservative investors preferring guaranteed returns over market risk
- People who want tax-free maturity + Section 80C benefits