State-owned Life Insurance Corporation of India (LIC) has reduced the entry age on its New Endowment Plan to 50 years from 55 years, sources said. The revision is effective from October 1, 2024.
“The entry age in the ‘New Endowment Plan’ filed by LIC as per the new surrender value norms has been reduced to 50 years from 55 years,” LIC said in a communication reviewed by Business Standard.
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LIC New Endowment Plan-914 is a participating endowment plan that offers the dual benefit of a protection-cum-saving plan. The LIC New Endowment Plan provides both death and maturity benefits.
An endowment plan is a type of life insurance policy that provides life cover as well as a maturity benefit. The life cover component provides a lump sum payout to the loved ones in the case of the policyholder’s demise, while the maturity benefit component provides a fixed payout at the time of maturity.
According to insurance industry experts, the life insurer is likely to have reduced the entry age as mortality rates increase after a certain age, helping the company to pare down risk in this segment.
An email query sent to LIC on the same did not elicit a response at the time of going to press.
According to LIC’s website, it has six endowment products: LIC’s Single Premium Endowment Plan, LIC’s New Endowment Plan, LIC’s New Jeevan Anand, LIC’s Jeevan Lakshya, LIC’s Jeevan Labh Plan, and LIC’s Amritbaal. All these products have been modified as per the new surrender value guidelines effective from October 1, 2024. These are part of 32 products and riders modified by the life insurer to comply with the surrender value norms.
“Out of these products, the life insurer has revised premium rates across products, except LIC’s Amritbaal Plan, by an average of 8-10 per cent, and the sum assured for LIC’s New Endowment Plan, LIC’s New Jeevan Anand, and LIC’s Jeevan Lakshya has been increased to Rs 2 lakh from Rs 1 lakh earlier,” the source said.
“Meanwhile, private players who have introduced endowment plans have revised premium rates by only 6-7 per cent on average,” the source added.
“Endowment policies could be either participating, where the bonus is not guaranteed, or non-participating based on the investment experience of the insurer. In the case of non-par, guaranteed additions will be there. A large majority of LIC’s policies are participating, where a variable bonus is applicable. However, there are some non-par policies as well,” an insurance expert said.
Recently, LIC introduced a Single Premium Group Micro Term Insurance Plan. This plan is a non-participating, non-linked, group, pure risk, life micro insurance product. It is specially designed to provide simple, flexible, and affordable life insurance to cater to the needs of financial institutions including microfinance institutions, co-operatives, SHGs, and NGOs to cover their members/loanees. It also addresses the essential insurance requirements of members of unorganised groups, employer-employee groups, and other homogeneous affinity groups.
First Published: Oct 13 2024 | 6:22 PM IST
