ENDOWMENT POLICY

By:
PRATEEK BINDAL
INTRODUCTION
An endowment policy is a major part of life
insurance in which a contract is prepared or
designed to pay a specified amount of money
after a specified term or in case of an earlier
death of the policy holder. Typical maturities of
endowment policy are ten, fifteen or twenty
years up to a specific age limit. But, some
endowment policies are also paid out against the
case of severe illness or some health issues.
Endowment policies can be cashed in earlier
stage. It is called surrender. In this case, the
policy holder receives the surrender amount
which is determined by the insurer or the
insurance company depending on the period or
how long the policy has been running. It also
depends on the policy amount that is left.
During adverse investment conditions, the
surrender value or encashment value may be cut
down by a 'Market Value Adjuster'. This means
that the policy holder or investor would receive
the entire surrender value with a low cost or less
than the market value adjuster.
Types of Endowment policy:

Unit-linked endowment: It is a major
category of endowment policy. In this kind of
investment, the insurance premium is endowed
in several units of a specified unitized insurance
fund. Moreover, the insurance holders can often
select the funds where they want to invest their
premiums.

Traded endowment: These endowment
policies are also called second hand endowment
policies.
Low cost endowment (LCE): A low cost
endowment is a blend of a particular investment
where an expected future growth rate will meet
up a target amount and a declining life
insurance component to make sure that the
entire target amount will be paid as a minimum
if any accident occurs (any kind of physical
illness or death).

Full endowment: A full endowment one of the
major categories of the endowment policy. It is
basically a with-profits endowment in which the
basic amount ensured is equivalent to the death
benefit from the beginning of the policy. Later,
assuming the expansion or growth, the final
payout or return would be much higher than the
initial sum.
ENDOWMENT PLANS

Jeevan Anand 149
Endowment with Profit 14
Limited Payment Endowment with profit 48
Jeevan Mitra 88
Jeevan Saathi 89
Marriage Educational Annuity 90
New Janaraksha 91
Jeevan Mitra Triple Cover 133
Jeevan Anand 149

Features

This With-Profit plan is a combination of the
Whole Life Plan and the most popular
Endowment Assurance Plan. The plan provides
the pre-decided Sum Assured and Bonuses at
the end of the stipulated premium paying term,
but the risk cover on the life continues till death.

Moderate Premiums
High bonus
High liquidity
Savings oriented

Special Features

Accident Benefit:

The double Accident Benefit is available during the
premium paying term and thereafter up to age 70. The
premium for this has been built into the tabular premium
rates. Maximum Accident Cover available under this
plan will be Rs. 5 lakh ( this limit excludes accident
benefit taken under other plans)

Premium Stoppage:

If payment of premiums ceases after at least 3 years'
premiums have been paid , a free paid-up policy for a
reduced sum assured will be automatically secured
provided the reduced sum assured, exclusive of any
attached bonus, is not less than Rs. 250/-. The reduced
sum assured will become payable on the event as
stipulated in the policy.



Survival benefits:

Sum assured along with all vested bonuses payable at
the end of the premium paying term (Endowment term)

Death Benefits:

Sum Assured along with vested bonuses are payable on
death during the premium paying term and policy
ceases. An amount equal to the Sum Assured is payable
if death occurs after the premium paying term.
Simple Reversionary Bonus accrues during the premium
paying term and is payable at the end of the premium
paying term or on earlier death along with Final
Additional Bonus, if any. No Bonus is paid on death
after the premium paying term


Plan Parameters

Min Max

Entry Age 18 completed 65 nbd
Sum Assured 1,00,000 No Limit
Term 5 57

Mode of Payment: Yly, Hly Qly, Mly or SSS Max.
Maturity age: 75 Years Policy
Loan available: Yes

Endowment With profit - 14

Features

This policy not only makes provisions for the
family of the Life Assured in event of his early
death but also assures a lump sum at a desired
age. The lump sum can be reinvested to provide
an annuity during the remainder of his life or in
any other way considered suitable at that time.

Moderate Premiums
High bonus
High liquidity
Savings oriented

Special Features

Disability Benefit:

In case policy holder becomes totally and
permanently disabled due to an accident
before reaching the age of 70 and the policy is
in full force, he will not be required to pay
further premiums, (the Disability Benefit is
available in respect of the first Rs.20,000 sum
assured on any one life) and the policy will
continue to be in force.

Survival benefits:

Payment of full Sum Assured + Vested Bonus +
Final Additional bonus, if any


Accident Benefit

The Double Accident Benefit equal to the Sum
Assured and not exceeding Rs.25 lacs can be
availed by paying a small extra premium of Re.1
per Rs.1000/- Sum Assured per year. Even
students above the age of 18 years can avail of
this benefit.

Death Benefits:

Payment of full sum assured + Vested Bonus


Plan Parameters
Min Max

Entry Age 12 nbd 65
Sum Assured 20000 No Limit
Term 5 55

Mode of Payment: Yearly, half
yearly quarterly, monthly or SSS Max.
Maturity age: 75 Years
Policy Loan available: Yes

Limited Payment Endowment
with Profits 48

Features

The payment of premium can be limited
either to a single payment or to a term
shorter than the policy. The Sum Assured
and Vested Bonus are, however, payable
only at the end of the policy term, or on
death of the policy holder if it takes place
earlier.

Special Features

If payment of the premiums ceases after at least three
years' premiums have been paid, a free paid-up Policy
for an amount bearing the same proportion to the sum
assured as the number of premiums actually paid bears
to the number stipulated for in the policy, will be
automatically secured provided the reduced sum
assured, exclusive of any attached bonus, is not less
than Rs.250.

Such reduced paid-up Policy will not be entitled to
participate in the profits declared thereafter, but such
Bonus as has already been declared on the Policy will
remain attached hereto.

Benefits

This is the most popular form of life assurance
since it not only makes provision for the family
of the Life Assured in the event of his early
death, but also assures a lump sum at any
desired age. The amount assured, if not paid by
reason of his earlier death, becomes payable at
the end of the endowment term when it may be
invested to provide an annuity during the
remainder of his life or in any other way he may
think most suitable at the time.

Plan Parameters

Min Max

Entry Age 12 nbd 60
Sum Assured 20000 No Limit
Term 5 50


Mode of Payment: All modes
Max Maturity Age: 70
Policy loan available: No loan under
policies issued on
minors until vesting.
Jeevan Mitra 88

Features

The benefits of this policy are considered
normally for standard and substandard lives up
to Class VI. It cannot be allowed for people
engaged in hazardous occupations. Female lives
under Category I & II allowed. Non-medical
special is allowed only if the Sum Assured does
not exceed Rs.1,00,000/-

Special Features

Besides the usual benefits offered by any
endowment insurance plan, this policy provides
for an additional insurance cover equal to the
sum assured in the event of a policy holders
death during the term of the policy. In other
words, the death claim in the case of this policy
is twice the basic sum assured. The survival
claim, on the other hand, is the basic sum
assured, plus the accrued bonuses. Bonus is,
similarly, calculated only on the basic sum
assured at rates applicable to endowment
policies.

Benefits

Survival benefits:

Sum Assured + vested Bonus on the basic Sum
Assured.

Death Benefits:

Double the Sum Assured + vested Bonuses on
the basic Sum Assured Or Double Accident
benefits, if taken and paid for will treble the
amount of Sum Assured

Plan Parameters

Min Max

Entry Age 18 lbd 50
Sum Assured 20000 No Limit
Term 15 30

Mode of Payment All modes
Max Maturity Age 70 Years
Policy loan available Yes

Jeevan Saathi 89

Special Features

This policy is issued on the lives of the husband and wife
including those under Category II & III. The Sum
Assured will be payable on the first death and again on
the death of the survivor during the term of the policy.
Vested Bonuses would also be paid along with the Sum
Assured on the second death.

The Premium under this Plan is payable during the joint
life time of the two lives and ceases on the first death or
the expiry of the selected term, whichever is earlier.


Benefits

Survival benefits:

If one or both the lives survive to the maturity date, the
sum assured, along with the accumulated bonus, is
payable.

Death Benefits:

In case either of the couple dies during the policys term,
two things happen. One, LIC pays to the surviving
spouse the full sum assured. And, two, the policy
continues on the life of the surviving partner without
him/her having to pay any further premiums, i.e. the life
cover on the survivor continues free of cost. The sum
assured is again be payable on the death of the other
partner in case both the husband and wife were to die
during the term of the policy. Vested bonus would also
be paid along with the sum assured on the second
death.

Plan Parameters

Min Max

Entry Age 20 nbd 50
Sum Assured 20000 No Limit
Term 15 30

Mode of Payment All
modes Max Maturity Age 70
Years Policy loan available Yes

Marriage Endowment
& Educational Annuity - 90

Features

The Marriage Endowment/ Educational annuity
plan provides a sum assured to be kept aside for
the expenses of marriage or higher education of
the policyholder's children. Premiums payable
for selected term or till death of the life Assured.
Benefits will be given only after the selected
term.

Special Features

Under this plan the policy monies and bonus are paid
only at the end of the selected term, irrespective of
whether the policy holder survives till the term or not,
i.e. the survival or death benefit is payable at the same
time. In case the policy holder were to die during the
term of the policy, no further premiums are payable but
the bonus continues to accrue for the full-term of the
policy. The sum assured, plus the accumulated bonus for
the full term, are then paid to the family at the end of
the policys term. Further, one can opt to receive the
money either in one lump sum, or in ten half-yearly
installments. In case, the Double Accident Benefit is
availed, then an additional sum equal to the basic Sum
Assured becomes payable immediately on death due to
accident during the policy term.

Benefits

Survival benefits:

(Sum Assured + Bonus) payable in lump sum (or)
(Sum Assured + Bonus) payable in 10 half-yearly
installments at the option of the life assured.

Death Benefits:

(Sum Assured + Bonus) payable in lump sum or in 10
half-yearly installments at the option of beneficiary at
the end of the policy term. Accident: Accident benefit
equivalent to basic sum assured would be available by
paying appropriate additional premiums in that behalf.
An amount equivalent to Sum Assured become payable
immediately.

Plan Parameters

Min Max

Entry Age 18 lbd 60
Sum Assured 20000 No limit
Term 5 25

Mode of Payment All modes
Max Maturity Age 70 Years
Policy loan available Yes

New Janaraksha 91

Features

Ideal for Farmers and Workers, since farmers have to
depend on the vagaries of the climate while workers are
subject to changes in trade cycles, depressions, strikes,
labor disputes, etc. Provides full life insurance cover for
3 years even when the premiums are not paid. (This
benefit is available after at least 2 years premiums are
paid). Non-medical General up to Rs.50,000/- with
declaration of age up to 40 without any extra premium.
Non-medical Special is allowed up to Rs. 1,00,000/-
.Accident benefit available without payment of any extra
premium.

Special Features

The non-medical limit is exclusive to this policy.
Double Accident benefit and Bonus is also
granted. A special feature of the New Jana
Raksha Policy is that it continues to provide full
life insurance cover to the assured for three
years, even when the premium payments are
stopped due to certain reasons, provided that at
least 2 years premiums have been received.

Benefits

1) Maturity Benefit:

Payment of Sum Assured + Accrued bonus.

2) Death Benefits:

Natural:

Payment of Sum assured + Accrued bonus .

Accident / Permanent Disability:

Payment of double the Sum Assured + Accrued
bonuses on the Sum Assured as defined on the policy
document.

Plan Parameters

Min Max
Entry Age 18 50
Sum Assured 20000 750000
Term 12 30

Mode of Payment All modes
Max Maturity Age 70
Policy loan available Yes

Jeevan Mitra Triple Cover 133
Features

The benefits of this policy can be considered
only for standard and substandard lives upto
Class VI. It cannot be allowed for people
engaged in hazardous occupations. Individuals
engaged in dangerous pursuits will be rated
against the revised tabular occupational extra
rates.

Special Features

This policy provides the benefits of an
Endowment Assurance policy and
additional insurance cover equal to three
times of Sum Assured in the event of
death during the term of the policy so that
the total insurance cover is thrice the
basic Sum Assured.

Benefits

Maturity Benefit:

Basic Sum assured along with vested bonuses will be
payable on the life assured surviving till the end of the
term.

Death Benefit:

Three times the basic sum assured together with vested
bonuses if any, will be payable on death of the life
assured during the term of assurance.

Bonuses:

Bonus additions will be reckoned on the basic sum
assured at rates applicable to endowment assurance and
will be payable at the end of the selected term or at
death if it occurs earlier.

Plan Parameters

Min Max

Entry Age 18 50
Sum Assured 20000 No limit
Term 15 30

Mode of Payment All modes
Max Maturity Age 70 Years
Policy loan available Yes

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