LIC’s new plans 2014-New Endowment Plan (No.814)

Today LIC launched one more new plan which is the new version of the old Endowment Plan (No.14). As this is the new version of existing plan, I am just updating the changes.

LIC's New Endowment Plan

So what is new to customers?

Apart from surrender, death benefit and loan changes, I don’t think any major changes. Premium table is not yet available. So it is premature whether this new plan is cheaper or not. But as it is traditional plan and only revamped to match the new IRDA guidelines, I am maintaining the status quo of recommendation “STAY AWAY”.

 

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  1. Abhijit says

    Hi ,

    i am alread investing in new Bima gold policy 20K per year.

    now i am planning to invest 20K more to save Tax and get returns, i was thinking about Jeevan Anand or new Endowment plan.

    Can you please help me with this.

    thanks,
    Abhijit

      • Abhijit says

        Thank you for your responce…can you please advise me someting how i should invest this amout so i can get returns.

        i would like to have some issurance coverd for my famil in case of unfortunate incidence.

        Please provide me some option so i can go for it.

        Thanks Again.
        Abhijit

        • says

          Abhijit-First buy a term plan to cover around 15-20 times of your yearly income. Rest you need to decide based on when you need money. Like short term goals means secured product and for long term, you can choose equity.

          • Abhijit says

            i am looking for 8 to 10 year, but if there are some option in short term i wil be happy to go for as i can use that returns to buy house.

            Also i am looking for tax saving plan ..

            can you give me some option and recommend some option which i should opt for.

            Thanks,
            Abhijit

              • Abhijit says

                Hi Basvraj,

                i can wait for 8 to 10 yrs and keep on investing at the same time i need option for tax saving.

                keeping this goal in mind , can you please help me out.

                Thanks,
                Abhijit

                • Abhijit says

                  Hi Basvraj,

                  Let me give you some idea on m expenses and saving that might give you idea .
                  i earn 10L/Annum . i am 28 yrs old

                  Falt: Loan 20 Lac Paying 20K/Month for 20 yrs
                  Money back Bima Goald: 20K/Annum from last 4 yrs.
                  PPF: 50K started this year.
                  Planning to buy term plan for 20 yrs which can give me more than 50L as per your earlier advise.

                  i really don’t have idea on how to invest in mutal fund and i need to save my income tax also . But i am intrested in mutual fund or equity

                  it woul be very helfull if you advise me how to start investing and where.

                  thanks,
                  Abhijit

                • says

                  Abhijit-Then my answer is-Term Insurance, PPF (around 30%), Bank FDs (20% as it’s maturity is only 5 years) and rest ELSS (once lock in of 3 years complete, you can continue with the same fund if it is performing well or divert to other funds) and EPF. Hope by these options your tax saving requirement will get fulfilled.

                  • Abhijit says

                    thank you Basvraj….i am sorry but really don’t know what is ELSS , can you please tell me what is this and how to invest in it.

                    Sorry for bothering you again and again but i really find your blogs helpfull and geniun.

                    • Abhijit says

                      thank you Basvaraj…i went through your blog and selected following 3 options i can ivest 30K per year on this, can you please see if these option looks ok to you and how much i should invest in each.

                      ICICI Prudential focused bluechip equity (G)
                      Franklin india Blue chip fund (G)
                      Reliance quity opportunity (G)

  2. Sridhar Kesaraju says

    Hello

    I’m looking for a LIC Policy and the agent has suggested me the plan New Endowment (Plan No. – 814). Is this the best policy and beneficial for me? As I’m looking for the long term, tax benefit, and good returns. I’m planning to invest 24,000 thousand per annum. Please suggest if you have some other plans as well.

    Thanks

    • says

      Sridhar-In my view it only fulfill your tax benefit and long term requirement. But it fails to give you good return over long period. Why can’t you opt for term plan and invest rest in simple product like PPF, which will give you more return and same tax benefit in long run?

      • Sridhar Kesaraju says

        Thanks Basunivesh! I’m also investing in PPF. But here in this policy I am looking for the returns after the maturity of the plan. Can you please suggest some best plan in this regard? As you suggested one of the best plan LIC’s Jeevan Anand in your blog, can I go for it, does it suit my requirement?

        Once again thanks for your valuable suggestions!

        Sridhar K

        • says

          Sridhar-Whatever plan you consider from traditional category, your return will be around 7%. Hence Jeevan Anand is best only if you restrict your investment to around 15% to 20% of overall investable surplus. Otherwise it will ruin your financial life.

          • Sridhar Kesaraju says

            OK Thanks Basunivesh. Let me tell you the actual thing, I didn’t invest in any of the policies or any other savings plan to save from the Tax deductions from my salary. All these 4 years, I was just paying the tax and didn’t save anything, since I do have some other commitments. Now I realized that I need to do some investment for the purpose of saving at least some amount of tax (not completely) and in return I should get returns after the maturity of the policy. So I request you to suggest me a good plan if any suit my requirement. Thanks for your kind replies.

  3. Susheel says

    Hi Basavaraj Tonagatti

    can u please tell me in easy terms …
    e.g i wan to invest 40000 Annually till 21 years then how much i will get after 21 years..

    :)

  4. Hasit says

    Hello Sir,

    I am insurance agent of THE ORIENTAL INSURANCE CO. LTD. & LIC OF INDIA.
    At present i sale most of JIVAN ANAND policy.

    Your site are really use full for saleing insurance product.

    I wish to start new business of providing loan from bank to needy persons, so how can i start my new business.?

    Please provide me guide lines.

    • says

      Hasit-Thanks for your comment. Bud sadly, I am not writing this blog to upgrade the business. Instead you are welcome to share your knowledge with all of us. Learn, share and you are always welcome.

  5. shanthakumar says

    sir , can you please explain table no 817 -Endowment – single premium returns details .for example if am taking 1 lalkh sum assured . for 15 years

  6. says

    Sir, In the light of new shedule of policies what is the position of Endowment assurance
    with profit with DAB . We having 2 policies of 5 lac.since last 2/13. These should keep continue or stop or any option. Please suggest. thanks ML Jha

  7. says

    Hi…
    This is srinivas LIC advisor from Bangalore. Please wait upto this month end will get full details and also premium calculation, comparission of old product to new one, Benefits, Service tax impact, returns orianted questions and Mortality rates etc.

  8. says

    You can have a look at premium table here: https://docs.google.com/viewer?a=v&pid=forums&srcid=MDE2MTUwODIyNjc0MjM4NjM3NzEBMTAyNDA2MTUxOTkyNjA2MTEyNzUBSXgzTk04YU5EYzhKATQBAXYy

    Unless I have really overlooked a major point all LIC agents who were saying LIC policy will be costly were right. Add 3.09% to the amount to get the premium. There are some rebates that you are already aware of but these rebates have been cut down compared to last year.
    I myself had speculated that premium will be cheaper hence stand corrected. I am still confused what happened to the new mortality table. I am waiting for details to trickle down to me on mortality table.

    We had already debated earlier I still maintain diversification is the key and I will not advice to totally “STAY AWAY”

    Last time I did not counter your 5-6% return assumption of LIC, please correct if you see anything wrong here.

    Sample: 30 year old sum assured Rs 500000/- , Term 25 years, Annual premium Rs 18900/-.

    Maturity value at today’s rate = Rs. 1325000/- (Bonus Rs 48/- per thousand and Final Additional Bonus Rs. 450/- per thousand.)

    RATE/IRR: 8%

    Use the Excel Function Rate like this =RATE([@Term],(-1*[@Premium]),0,[@[TOTAL Mat]])
    = RATE(25,-18900,0,1325000)

    Alternatively you can use IRR excel function you will get same result.

    • says

      Divya-Let us first come to know the clear picture about the premium table then we can discuss. Also one way or another way LIC is paying the service tax (before it was from LIC now from investor itself). So I don’t think it will impact to that extent and this additional payout from the investor will be reflected when return from LIC will be higher than the current. Coming to return what you calculated, based on your data it provides me 7.7%. Insurance premiums will always be paid in advance. So you start playing today and will end up till 25 years. But return will be in the beginning of 26th year. If done in this way, returns still hover around 7%. Investing for such long term (25 years) and being satisfied with less than 8%, still feel good? As you said earlier, we can treat it as a diversifying tool. But the question is, how many agents have skill to guide client about diversification?

          • says

            Hi,
            I am ganesh from chennai. I have planned to take new endowment policy 814 in LIC. I choose the options for yearly i will pay 69971 and agent told as like as after 15 yrs i will get 23,34,812. So I request you to send details and how much amt for maturity and this plan is how to based on calculation for maturity?. That agent said it is not based on share marketing. so this plan is good for future and surely i will get the maturity amount(ie 23.34.812).i am waiting for your favourable reply as soon as possible.

            Thanks,
            Ganesh.

            • says

              Ganesh-Without knowing the SA and Term how can I arrive at the maturity value. Also if it is not participating in the market means how you decided that this plan is good? What if after 15 years this plan gives you just around 6% return?

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