LIC New Endowment Plan

LIC New Endowment Plan: A Comprehensive Review

Life Insurance Corporation of India (LIC) is a renowned name in the insurance industry and offers a wide range of insurance plans to cater to the diverse needs of individuals. One of the most sought-after plans is the "LIC New Endowment Plan." It is a traditional participating life insurance policy that not only provides financial protection to the policyholder's family in case of unfortunate events but also offers a savings component to secure the policyholder's future. In this article, we will delve into the features of the LIC New Endowment Plan and provide a detailed example with mathematical calculations to illustrate its benefits.

Key Features of LIC New Endowment Plan:

Dual Benefits: The LIC New Endowment Plan offers dual benefits of insurance coverage and savings. It provides financial security to the policyholder's family in case of untimely demise during the policy term and ensures that the policyholder receives a lump sum amount at maturity if they survive the policy term.

Flexible Premium Payment: Policyholders can choose the premium payment term based on their financial capabilities. The premium payment options range from 12 to 35 years, with the minimum entry age being 8 years, and the maximum entry age being 55 years.

Policy Term: The policy term for the LIC New Endowment Plan can be selected between 12 to 35 years, depending on the policyholder's preference and requirements.

Death Benefit: In the event of the policyholder's demise during the policy term, the nominee will receive the "Sum Assured on Death" along with any accrued bonuses, if applicable.

Maturity Benefit: If the policyholder survives the policy term, they will be eligible to receive the "Sum Assured on Maturity" along with the accrued bonuses, if any.

Participation in Profits: The LIC New Endowment Plan is a participating policy, which means it participates in the profits of the corporation. Policyholders are entitled to receive bonuses declared by LIC, which are added to the policy and paid out at maturity or death, enhancing the overall payout.

Mathematical Calculation - Illustrative Example:

To better understand the benefits of the LIC New Endowment Plan, let's consider an example. Mr. Sharma, aged 30 years, decides to opt for the LIC New Endowment Plan with a policy term of 20 years. He chooses a Sum Assured of Rs. 10,00,000 and opts for an annual premium payment mode.

Premium Calculation:

The premium for the LIC New Endowment Plan depends on various factors, including the policyholder's age, policy term, Sum Assured, and premium payment mode. For this example, let's assume Mr. Sharma's annual premium is Rs. 50,000.

Total Premium Paid: The total premium paid over the policy term of 20 years would be: Total Premium Paid = Annual Premium * Policy Term Total Premium Paid = Rs. 50,000 * 20 = Rs. 10,00,000

Death Benefit: In the unfortunate event of Mr. Sharma's demise during the policy term, the Death Benefit payable to his nominee will be: Death Benefit = Sum Assured on Death + Accrued Bonuses Let's assume that the accrued bonuses amount to Rs. 2,00,000. The Death Benefit will be: Death Benefit = Rs. 10,00,000 + Rs. 2,00,000 = Rs. 12,00,000

Maturity Benefit: If Mr. Sharma survives the policy term of 20 years, he will be eligible to receive the Maturity Benefit, which includes the "Sum Assured on Maturity" and the accrued bonuses.

Maturity Benefit = Sum Assured on Maturity + Accrued Bonuses Let's assume the accrued bonuses amount to Rs. 3,00,000. The Maturity Benefit will be: Maturity Benefit = Rs. 10,00,000 + Rs. 3,00,000 = Rs. 13,00,000

Overall Benefit: In this example, if Mr. Sharma survives the policy term, he will receive the Maturity Benefit of Rs. 13,00,000. If, unfortunately, he passes away during the policy term, his nominee will receive the Death Benefit of Rs. 12,00,000.

Please note that the actual benefits under the LIC New Endowment Plan may vary based on factors such as the policyholder's age, premium amount, Sum Assured, and the declared bonuses by LIC. Additionally, LIC may revise its bonus rates from time to time, impacting the final payouts.


The LIC New Endowment Plan is a comprehensive life insurance policy that provides financial protection to the policyholder's family in case of any unforeseen events and also acts as a savings tool for the policyholder's future. The policy's participation in profits through bonuses enhances the overall benefit, making it an attractive choice for individuals seeking a combination of insurance and savings benefits. However, before purchasing any insurance plan, it is advisable to thoroughly understand the policy's terms and conditions, compare it with other available options, and consult with licensed insurance professionals to make an informed decision that aligns with one's financial goals and requirements.

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