LIC reduces entry age for its new endowment plan to 50 years from 55

State-owned Life Insurance Corporation of India (LIC) has reduced the entry age for its new endowment plan to 50 years from 55, sources said. The revision is effective from October 1 this year.

Endowment is an insurance policy that provides life cover and maturity benefit. The life cover component provides a lump sum payout to nominees if the policyholder dies, while the other component gives a fixed payout given at the time of maturity.

LIC New Endowment Plan-914 is a participating endowment plan that offers the dual benefit of protection cum saving plan. LIC New endowment plan comes with both death and maturity benefits. 

According to industry experts, the company is likely to have reduced the entry age as mortality rates are inching up after a certain age and the step will help it to pare down the risk in the segment.

An email sent to LIC was not responded to immediately. 

According to LIC’s website the company has six: endowment products: Single Premium Endowment Plan, New Endowment Plan, New Jeevan Anand, Jeevan Lakshya, Jeevan Labh Plan and 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 so that they are compliant with the surrender value norms. 

“Out of these products, the life insurer has revised premium rate across products, except LIC’s Amritbaal Plan, by average 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,” said the source.

“Meanwhile, the private players who have introduced endowment plans have revised premium rates only by 6-7 per cent on an 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 case of non-par, the guaranteed additions will be there. Large majority of LIC’s policies are participating where variable bonus is applicable. But, there are some non-par as well,” said an insurance expert.

LIC recently introduced a Single Premium Group Micro Term Insurance Plan to provide “simple, flexible and affordable life insurance” to cater to the needs of finance Institutions including microfinance Institutions, cooperatives, self-help groups and non-governmental organisations to cover their members / lonees.