LIC
has recently launched a limited premium paying endowment plan. Plan offers only
3 terms of 16, 21 and 25 years with premium paying term of 10, 15 and 16 years
respectively. Minimum entry age in the plan is 8 years and maximum is 59 years.
Minimum age at maturity is 50 years and maximum it is 75 years. Minimum sum
assured is Rs. 2lakhs and there is no upper limit on the maximum sum assured. The
sum assured after Rs. 2 lakhs is in multiple of Rs. 10,000.
The
plan offers four premium payment options such as yearly, half yearly, quarterly
and monthly. Plan offers mode rebate of 2% for yearly mode and 1% for half
yearly mode on tabular premium. Plan also offers high sum assured rebate above
Rs. 5lakhs sum assured. Policy is eligible for loan after acquiring surrender
value.
The
points to know this before investing. The return is very poor as illustrated
below and further applicable service tax will further reduce your return. The
same can be understood with the help of following example. If a 30 year healthy
male takes this plan for sum assured of Rs. 2 lakhs for 25 year term with
option premium paying term of 16 years, then his premium exclusive of service
tax will be Rs. 9,134/-. The IRR is of the plan is only 5.28% considering
return on investment @8% p.a. and 2.33% considering return on investment @4%
p.a. which is calculated with the help of excel and using IRR formula. The detail
is as under.
|
Year
|
8%
|
4%
|
|
1
|
-9,134
|
-9,134
|
|
2
|
-9,134
|
-9,134
|
|
3
|
-9,134
|
-9,134
|
|
4
|
-9,134
|
-9,134
|
|
5
|
-9,134
|
-9,134
|
|
6
|
-9,134
|
-9,134
|
|
7
|
-9,134
|
-9,134
|
|
8
|
-9,134
|
-9,134
|
|
9
|
-9,134
|
-9,134
|
|
10
|
-9,134
|
-9,134
|
|
11
|
-9,134
|
-9,134
|
|
12
|
-9,134
|
-9,134
|
|
13
|
-9,134
|
-9,134
|
|
14
|
-9,134
|
-9,134
|
|
15
|
-9,134
|
-9,134
|
|
16
|
-9,134
|
-9,134
|
|
17
|
0
|
0
|
|
18
|
0
|
0
|
|
19
|
0
|
0
|
|
20
|
0
|
0
|
|
21
|
0
|
0
|
|
22
|
0
|
0
|
|
23
|
0
|
0
|
|
24
|
0
|
0
|
|
25
|
0
|
0
|
|
|
3,70,000
|
2,20,000
|
|
|
5.28%
|
2.33%
|
Don't Mix Insurance and Investment. Keep both separate for better result.
