State-owned Life Insurance Corporation of India (LIC) has reduced the entry age in its new endowment scheme from 55 years to 50 years, sources said. The revision takes effect from October 1, 2024.
The age of entry into the ‘New Endowment Plan’ introduced by LIC under the new surrender value norms has been reduced from 55 years to 50 years, LIC said in a communication that was reviewed by Business standard.
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‘LIC New Endowment Plan-914’ is a participating endowment plan that offers the double benefit of a protection and savings plan. It comes with both death and maturity benefits.
An endowment plan is a type of life insurance policy that provides life coverage and a maturity benefit. The life cover component provides a lump sum payment to loved ones in the event of the death of the policyholder, while the maturity benefit component provides a fixed payment that is given at the time of maturity.
According to insurance industry experts, the life insurer is likely to have lowered the entry age as mortality rates gradually increase after a certain age, which will help the company reduce the risk in the segment.
An email query sent to LIC on the same issue did not elicit a response till the time of going to press.
According to LIC website, it has six endowment products: LIC Single Premium Endowment Plan, LIC New Endowment Plan, LIC New Jeevan Anand, LIC Jeevan Lakshya, LIC Jeevan Labh Plan and LIC’s Amritbaal.
All these products have been modified as per the new surrender value guidelines effective October 1, 2024. These are part of 32 products and riders modified by the life insurer to comply with the surrender value norms.
“Of these products, the life insurer has revised the premium rate on all products, except LIC Amritbaal Plan, by an average of 8 to 10 per cent and the sum assured for LIC New Endowment Plan, New LIC’s 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 schemes have revised premiums by only 6-7 per cent on average,” the source added.
“Endowment policies could be participatory when the bond is not guaranteed or non-participatory depending on the investment experience of the insurer. In case of no even, the guaranteed additions will be there. The vast majority of LIC policies participate where the variable bonus applies. But there are also some who are not up to the task,” said an insurance expert.
Recently, LIC has introduced a single premium group micro term insurance plan. It is a Life Microinsurance product, Non-Participating, Non-Linked, Group, Pure Risk. The scheme is specially designed to provide simple, flexible and affordable life insurance to meet the needs of financial institutions, including microfinance institutions, cooperatives, self-help groups and NGOs, to cover their members/loners. It also addresses the essential insurance requirement of members of unorganized groups, employer-employee groups, and other homogeneous affinity groups.
First published: October 13, 2024 | 18:22 IS
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