LIC’s New Endowment Plus (Table No.835)-Features, Benefits and Review

On 9th August, 2015 LIC is going to launch the new ULIP Plan. This is called as New Endowment Plus (Table No.835). After the IRDA regulations, LIC closed all its existing ULIP Plan (including the Endowment Plus Plan). Now, after a long wait, it is launching ULIP.

LIC's Endowment Plus-835

As I said above, this is the ULIP (Unit Linked Insurance Plan). This is insurance cum investment plan, where the money will be invested in an equity market.

Features-

# This is a ULIP (Unit Linked Insurance Plan).

# You can choose your premium amount.

# Your insurance coverage will be based on the premium amount you have chosen.

# LIC charges premium allocation amount. This is 7.5% in the first year, 5% from 2nd to 5th year, and 3% after the 6th year.

# LIC charges Fund Management Charges too. This will be 0.70% per year on unit fund.

# If you discontinue then LIC penalizes you by charging 0.50% per year on unit fund.

# The rest of the amount will be invested in the market based on the option chosen by an investor (confused to say between investor or policyholder). This option is explained as below.

LIC Endowment Plus-835 Fund Types

# Units will be allocated based on NAV (Net Asset Value) of the respective fund applicable on the date of allotment.

# NAV will be calculated on a daily basis, based on the performance of the fund and fund management charges.

Eligibility of LIC’s New Endowment Plus (Table No.835)

  • Minimum age at entry is 90 days.
  • Maximum age at entry is 50 years.
  • Policy Term is 10 to 20 Years.
  • Minimum Annual Premium is Rs.20, 000.
  • Maximum Annul Premium limit-NO LIMIT.
  • Basic Sum Assured mean higher of 10 times of annual premium and 105% of total premiums paid.

What is the maturity benefit?

An amount equal to Policyholder’s Fund Value will be payable.

What is the commencement of Risk?

  • If entry age is less than 8 Yrs-Date of Purchase+2 Years.
  • If entry age is more than 8 Yrs-Immediately.

What is the death benefit under this plan?

  • Death before commencement of Risk:-

An Amount equal to policyholder fund value shall be payable immediately on the date of receipt of intimation of death with a death certificate.

  • Death after commencement of Risk:-

Once the commencement of risk cover, higher of Basic Sum Assured OR Policy Holder’s Fund Value will be payable.

What riders available in this plan?

This plan offers you accidental rider by paying an extra premium. Few eligibility criteria for this rider is as below.

  • Minimum Age 18 Years.
  • Maximum age 55 Years.
  • Minimum Accidental Rider Benefit will be Rs.10, 000.
  • Maximum Accidental Rider Benefit will be 10 times of your annual premiums. (The maximum limit including all LIC policies must not be more than Rs.100 lakh.

As of now, I have this much information only. I will update the rest of features as and when I get.

Switching of Fund-

Only four switches are free. Later on you have to Rs.100 per switch.

Top-Up Option

This plan does not offer any top-up facility.

Loan Facility-

This plan does not offer loan facility.

What are surrender conditions?

  • You can surrender after completion of 5 years.
  • Fund value as on surrender date will be payable.

Whether you go for this ULIP Plan?

Strictly NO… Why? The reasons are as below.

1) Expenses-The fund average expenses will be around 3% (along with that there are fund management charges of 0.7%), which I feel costlier when we have well-established mutual funds offering your equity investments at around half of this expense.

2) No Track Record-We do not know how the fund managers perform as we don’t have historical data. Hence, the risk of underperforming is more.

3) Liquidity-Liquidity is an issue with ULIPs as there will be some charges or penalty (I will update you about surrender charges once I get a clear picture of this product).

4) Insurance coverage-Ideally, who buy a such Insurance+Invesment product ignore the actual insurance requirement. They look for premium affordability and based on that they select the sum assured. Hence, they forget the real requirement of life insurance in one’s life. The ideal requirement of life insurance must be around 15-20 times yearly income.

5) Death Benefit-Let us say you opted Term Insurance and started to invest in equity mutual fund or debt product based on the risk appetite. What your nominee will receive in case of death? They receive the sum assured amount of term insurance and the value of the investment you did (either in equity or in debt).

But in this plan, HIGHER of Basic Sum Assured OR the Fund Value. Therefore, I feel this as the biggest disadvantage.

These are the features, benefits, and details available as of now. I will update as and when I get it.

70 Comments

  1. Sir i have started my 835 Lic plant how much i will get after 5 years if i surrender…..

    Reply
  2. My son is 23 years old and he is a Software Engineer. Please let me know the best LIC policy for good returns and let me know the period of premium paying

    Reply
  3. Hi sir,
    I’ve got a lic new jivan anand 200000 rs insurance plan my premium 15500 rs annually for 17 years and my lic advisor told me I’ve got in my maturity rs 645000 rs and 2lac insurance continue for lifetime and if I wish to surrender my life time 2lac insurance they will give me surrender value of insurance amount two laks it’s true. And also get 4lacks !accidental insurance free till age 70 yrars

    Reply
    • Dear Gopal,
      But the returns will not be more than Bank FDs also, which I think your agent will never say YOU!!

      Reply
    • Dear Sir, on maturity you will get around 360000.you will have a life risk coverage of 2lak till your death or 100th year of age. on accidental death before completion of term your family will get SA2lak+2lak accidental coveage+vested bonus

      Reply
      • Dear Muslehuddin,
        Please elaborate your calculation on how he will receive Rs.360000? Two lakh coverage is a big one??

        Reply
  4. Sir there is a plan lic 835 new endowment plus if i invest ?50000 yearly for 3 years and don’t pay rest of premium and want to surrender in 5 th year of policy will i get surrender value or not or what i’ll be getting?

    Reply
  5. Dear sir, I would like to thank you for providing proper information about the LIC new Endowment plus plan. Sir, if you’re interested please illustrate with proper examples, as you did in your previous posts.

    Reply
  6. Sir if you want profit then purchase at less price and sell at high price. At present price of property is less. Int.rate is also less. Nav of mutual funds is high. So it is good time to surrender the mutual funds and to invest in property or to invest in j A table no 189 of lic of India under option of return of purchase price. As it provides 7.5%grantees for the whole life and also on the spouse also.+return of purchase price. Thank you.

    Reply
    • Dhillon-NAV matters for investors? Redeem from mutual funds and BEST is to invest in property or JA?? Great recommendation with great comparison of asset classes :p

      Reply
  7. I have taken LIC table no. 835 for yearly approx. 36000…..what returns can be achieved from this plan…

    Pls. let me know or i should leave this plan….

    Reg
    Jugesh Sabharwal

    Reply
    • Jugesh-You can expect around 5% to 6% return. If you feel this is BEST return, then continue. Otherwise, serious think of coming out.

      Reply
      • Hi,

        But now the fund value is 11.43….already grown up 10%….

        I dont expect 5 to 6% PA….but how do you expect these returns…..

        Reply
  8. Worst plan ever, complete waste of money. Leave your money in savings account for so 16 years and it will double. Here you just the premium paid back, no capital growth and you end up paying almost 20 times higher for a meager amount of life cover.

    LIC agents are all cheaters, they will sell this plan to you by saying absolute lies. Never trust an LIC agent. LIC and IRDA are doing a very very poor job at regulating their agents. Zero integrity levels left in LIC agents. LIC must be having a training plan on how to lie to a customers and not get detected. I have lost all trust in LIC or IRDA or Insurance industry in India as a whole 🙁

    Reply
    • HI! I DONT KNOW WHY YOU PEOPLE ALWAYS CRITICISE LIC POICIES….
      5OR 6% IRR IN ULIP ?
      AS OF NOW 12% WHICH IS SIMPLY DOUBLE THE FIGURE U EXPECT .I HAVE CALCUALTED IT ON NET PREMIUM AND PRESENT FUND VALUE SO DON’T TELL ME THIS RUBBISH.
      AND PROBABLY YOU HAVE MET SOME WRONG PERSON, NOT ALL LIC AGENTS ARE LIKE THAT. KINDLY CHK THE BACKGROUND OF AGENT, I SUGGEST DO BUSINESS ONLY WITH PROFESSIONALS LIKE MDRT AGENTS
      HERE IS MY EMAIL ID, IF YOU WANT ANY KNID OF CLARIFICATION YOU CAN SEND YOUR QUERY
      [email protected]

      Reply
      • Vikas-Is MDRT tag guarantees that he does not do miss-selling?? Now coming back to returns, can you show me the IRR rate of each funds of this plan for further discussion?

        Reply
  9. Please suggest any policy for life and investment purpose.which policy is better life and investment policy cover in one policy or individual.

    Reply
    • Vinod-There is no such policy which we say BETTER OR BEST for both LIFE and INVESTMENT. For life, I suggest to go for term insurance. For investment, simply stay away from such policies.

      Reply
  10. Is there any good single Prem plan that gives more than 7% post tax return? And maturity proceeds is not taxable

    Reply
  11. Hi
    My query is- can Lic agent ( of delhi or Mumbai branch) able to take out new Lic policies according to his client’s choice of branch or from any other states. For eg. If client belongs to Bihar….can agent take out policy from Bihar branch….if yes.. What about lives.. Is Lic agent’s branch will consider new life in his agency..? Wht about commission? How will he receive it?

    Please guide me.
    Thanks

    Reply
    • Nidhi-He can do visiting business. He can submit the proposal in the branch where client want to be. However, your DO may discourage it as he loose his part of business. Instead, you can do it in your branch itself by opting a yearly premium plan. Once the policy is issued, then immediately ask your client to transfer it to the branch where he need.

      Reply
      • Thanks for reply.
        Yes… You gave good option. But, in first scenario, where agent has to take out policy from other branches, what about life and commission.? Do we have to remind our own branch?.

        Reply
        • Nidhi-Not required as the particular policy will be issued under your agency. So automatically it will be paid to you.

          Reply
  12. Basavaraj sir , i agree to your thinking …… and i also feeling same , you say’s about endowment plus policy . Before five year i was no idea about plans & policys , because i was only 18yr old, and my father passed away recently ….. i had got my father’s maturity money at that time a agent of lic (known to me from before) came to me and told about endowment plus policy … and also convince me that after 5 year i will get 2 or 3 times of investment value …… but now five year complete, and i ask the agent how much my policy amount increase …… then he told me that my policy value is 140000 ( my investment amount is 100000) then i till to get only 40000 of investing 100000×5yr ….. which hurt me … if i know about this policy from initial …i dont do this policy …….. tomorrow i am preparing apply for surrender this policy ….. basavaraj sir have you any sugesstion to me which helps me to do better in this stage . Pls give me a sugesstion…. i am waiting for you sir ……and also thanking you to helps unknown persons about this ….

    Reply
    • Manoj-Thanks for sharing your sad story. Once you surrender then buy a pure term insurance (especially from ONLINE) to the tune of around 15-20 times of yearly income, create an emergency fund of at least 6 months household expenses, buy an accidental insurance separately. Once all these are set, identify your goals. Based on those goals, start investing by choosing products.

      Reply
  13. Dear All
    My Question is not related to LIC, While i am going through the comments on this page, I thought you please with sound finance knowledge can help me.

    What is good for Long term Investment around 20 Yrs. Mutual Fund or ULIP.
    I did some background before i post this question on this forum and my Analysis concludes Mutual Fund is good choice. Here is why i believe so, please educate if i missing anything here..

    1. Mutual Fund – For Example you buy MF for 100/- and assume you got 100 Units[NAV 1 Rs]. At the end of 20 yrs you will have 100 units in your account that multiplied by NAV at the time

    2. ULIP – For Example you buy ULIP with 100/- and assume you got 100 Units [NAV 1 Rs]. Assume allocation
    charge of 5%, 2% for Fund management and Mortality
    1 . After policy issued your units will be reduced to 95 [ 5% Allocation charge]
    2. At the end of 1st year , Until will be reduced to 93 [2% Fund management and Mortality]
    3. At the end of 2nd Year, Untils will further reduced to 91 [2% fund management and Mortatlity]
    4. At the end of 20th Year, I will have around 55 Units in my accounts [reducing 2% every year for 20years for Fund management and mortality]

    It means, i started with 100 units in my ULIP account and it reduced to 55 units for a period of 20 Years…

    Where are in Mutual FUnd all 100 units are in my accounts after 20 Years..

    Could anyone please comment on my analysis as i would to decide which one is better for long term Only investment perspective.

    Reply
    • Mallesh-Slight change in your MF logic. In case of Mutual Fund expenses, the NAV arrived post expenses adjustment. Hence, you will not notice such expenses upfront. So don’t say that MF will be totally cost free. However, when you compare with ULIPs, then definitely MF will have an edge over expenses and liquidity and taxation.

      Reply
  14. Sir iwant surrend my lic endownment policy. My policy alrady complited 5 years what are the document your riquired sir hep me

    Reply
    • Chalapathi-It is not required by me but to LIC 🙂 They need original policy document, your bank account details and you have to fill the surrender form.

      Reply
  15. Hi,

    I want to surrender this policy after 5 years(which is after 1 week) I called up their office and they told me that its a myth that there is no surrender charge after 5 years. I am kind of confused here. Also sir, what is the procedure to surrender this policy?

    Reply
    • Atul-Don’t believe to them or me. Go with policy documents.

      Reply
  16. PLEASE SUGGEST, WHETHER, I CAN INVEST Rs.500 IN THIS TABLE NO. 835 OF LIC Policy.

    THANK YOU,

    REGARDS,
    RAO.

    Reply
    • Prasada-If your expectation from this policy is around 5% and a little bit of insurance coverage, then definitely go ahead.

      Reply
  17. Hi Sir,

    I have 3 yrs kid need a plan for him.

    Kindly advice which plan suit him for his education.

    Reply
    • Om-Never invest in a product which combines INSURANCE+INVESTMENT. Buy a term plan and invest based on your goals.

      Reply
  18. Hi Sir,

    i need a term plan which is best kindly advice.. problen is that on 24/5/2012 i was dignosed with RHD And BMV was done.and i applied to one company but thay rejected, now i am living normal life no problem at all.

    How can i get term plan.

    Reply
  19. about 2-3 months back i read story about LIC fund managers sharing information with brokers , with regard to investment , could you please tell me the effect it makes on policyholder’s invested amount.Being LIC agent i don’t wish any of my client cheated by anybody ( be it LIC )

    Reply
    • Sunil-This is treated as insider trading. If anything such incident happened then IRDA and SEBI will penalize the LIC. But I don’t know any such insider trading incident from LIC.

      Reply
  20. simply brilliant.you are doing great service to india .keep it up.

    Reply
  21. Very nice review and a big no to these ULIP policies. The better would be do SIP in mutual funds for investment and buy a term plan for insurance.

    Reply
  22. Hello Sir, Why you said no for every LIC product.

    As of my knowledge this is nice product.

    1. They are offering 4 options. We can choose one option based on our requirement.
    2. In this the agent commission is very less. As of I know it is around 3 to 5%. You are saying Endowment plans are bad because of this agents commissions. But now in this product agent commission is very. So indirectly it helps the policy holders.

    Comings to the points, you mentioned:

    1. Expenses: How sir, 3% for portfolio maintenance charges are high. In this 3% customer gets complete service from the agent, where as in the Private mutual funds, customer has to spend some days and visit the bank. In this also they will charge some amount. So this is not a valid point to reject this product.

    2. No Track record: This is very strange. Fund managers are not fresh graduates, LIC company is from 1956. this is only the new product, not a new company.

    3. Liquidity: No comment. Lack of knowledge in this.

    4. Insurance coverage: Yes, the insurance coverage is less in this product. But this is not a point. Because LIC taking very small amount from your premium and investing in the Insurance pool. This cost is very low,

    Good thing is, If you invest in mutual funds the profits which you are gaining, you need to pay tax. Where as in this product no TDS. And how ever LIC is brand.

    Finally, you can take one good term plan + This product.

    Please correct me, If I am wrong.

    Reply
    • Manikanta-I never say NO to all products. I sincerely follow one of the best products of LIC like online term insurance and pension plan.
      1) Sir, in Mutual Funds the expense are less than 3% and there to middlemen act and help exactly like agents provide. In fact with a click of button customer can get all services online. Is this possible from LIC? At the same time, how and who will give guarantee to buyer that agent will be in the same industry up to the buyer’s policy period? How many people ran away from insurance industry? In that case, who will care the policyholders? Don’t give rosy picture of SERVICE OF AGENTS. I know how it is maintained and managed by LIC and agents.
      2) If LIC is a company from 1956 then why LIC MF is so worst performer in the industry? Why can’t they share their information to LIC MF? Also, do you feel the fund manager who managed in 1956 will manage this fund also? Why to take risk of being unknown new investment where we don’t know about the fund manager and how he/she perform?
      3) To whom? To me or to you?
      4) Taking small amount but at what cost? By offering low insurance right? Term Insurance products are also in fact more cheaper.
      Equity Mutual Funds taxed for long term holding (more than a year)? Check your knowledge of taxation. Equity Mutual Funds are tax-free if holding period is more than a year. I think you are totally no knowledge about taxation. Sir, TDS not applies to MF also. For your information if there is no TDS then it does not mean that it is tax-free.
      Why I stake my investment for the sake of your BRAND??

      Reply
      • 1. Will you give guarantee on the returns, for the companies who are giving services with ONE CLICK. Of course I am not saying that LIC will give that assurance, Mutual funds means risky ones. Nobody can give guarantee in this case. If policy holder wont get profits how you are blaming Agents and LIC. Because of this in this they provided 4 options.

        2. From 1956 to current date, In most of the products LIC giving Bonus to the customers. This is possible only by having good Fund managers. As you remembered in your previous article, http://www.basunivesh.com/2015/07/23/why-endowment-or-money-back-life-insurance-policies-give-less-returns/
        In this you mentioned expense cost is 90% in the first year, from subsequent years it is around 15%. But in this product the expense cost is very less. And after subtracting all these values they are giving number of NAV to the policy holder.

        If the NAV, is not good, you can change the option to LOW RISK.

        3. To me.

        4. If you take 20,000 per year premium then maximum death assurance is 2,00,000. Calculate how much you need to pay for term insurance for this amount. LIC taking that amount only from policy holder.

        You mentioned. “I know how it is maintained and managed by LIC and agents”. I know how private companies are doing Mutual Funds, and playing game with customers. About taxation I need to update more. Loopholes are there in every product. As a financial planner you need to explain both pros and cons. Did you mention any pros in this product. ?

        Thank You .

        Reply
        • Mashetti-I think regarding this comment you said that I deleted. It requires my approval. Hence, it was not visible to you at that time.
          1) Counter question-Will you give guarantee from LIC about RETURNS?
          2) Check the expense ratio of traditional plans in my earlier post (this not at all disclosed to buyers and you raised BONUS, hence I am posting this blog link). Come with facts to counter argue.
          Why Endowment or Money Back Life Insurance Policies give less returns?
          3) Then I don’t have any issues.
          4) In that Rs.20,000 how much is mortality charge? Can you check and let me know. This actually leads to future argument 🙂

          Reply
          • 1. In my question only I mentioned, LIC is not assuring about returns. But policy holder have a better option to take LOW risk to HIGH risk. He/She can change the option in middle of the term.

            2. Yes, I had read that long ago. Based on that only I am asking you, those are traditional endowment policy in that the expenses are high. But here in this policy how it is correct. The agent commission is only 2.5 % per year. Then policy holder can expect good returns.

            3.In the LIC website itself they mentioned, for 20,000 Mortality charges+Service charge is 581 Rs. Means Mortality charges are around 300. 🙂

            It is very transparent. It is telling every thing include agent commission also.
            According to your point. In one click some companies provide Mutual funds. Then how they are earning money. With out charging any charges, is they are doing any social service. Every body here is doing business.

            Thank you. 🙂

            Reply
            • Manikanata-1) May I know what is low risk and high risk? If LIC not assuring return why I have to scratch my head with BRAND?
              2) Mr.Agent, look at investor point of view not about commission which you will get in your pocket. There are many cheaper options than this 2.5% or 3% expenses. Then why should one must invest in this product?
              3) Around Rs.300. Now check for how long your family survive with this Rs.2,00,000 sum insured? Don’t say that one must buy term insurance also. Here we are discussing about insurance 🙂
              They must be transparent. There is no great deal in that. For your information your LIC MF also provides one-click investment option 🙂 They are not doing social service but when I as an investor have an option to invest in cost-effective manner then why should I be run behind such illiquid product?

              Reply
              • 1. If yo read the product broucher in detail u will understand what is low and high risk. Low risk means most of your premium amount is invested in bank deposits. Small amount invested in share market. Where as in high risk it is inverse. Can u pls show me any mutual fund product gives the assurance about returns. Obviously customer will invest money in the company based on its track record and BRAND.

                2. I am really interested to know. The products which are offering less than 2.5% expenses.

                I am not about agent commission. My concern is from your point of view only, In the last few articles u mentioned that LIC commission to the agents are high so. It is very bad. But know by which reason u r exploring it is bad.

                3. In the starting only I mentioned it is covering very less amount, for 2,00,000 rs 300 amount is not at all a big thing. And I also mentioned take one good term policy.

                Thank you . 🙂

                Reply
      • Hello sir, Why you had deleted my reply. In that case delete my first comment also.

        Reply
        • Manikanta-I have not deleted any of your comments. Also, I will not gain or loss from deleting the comments. It requires admin approval. That was the reason, your comment not visible to you.

          Reply
  23. Total fallacy. Does the man know that total expenses are restricted at 2.25 % for 15 yr pol. Please dont blabber blindfoldedly

    Reply
    • Kumar-Who said of what expenses will be 2.25%? Don’t blame blindfolded 🙂

      Reply
  24. I agree with “No” If person have very less / not enough Insurance protection. But strictly no is not fair because Plan have surrender option after 5 years and if Mutual Funds companies predict market growth appx 15% to 20% in mid-long term or long term view then I suggested to go for this investment plan. In long term view charges is fixed. Even Many market operator also suggest one plan in Investment Portfolio.

    Reply
    • Chetan-So you mean to say that one must go for this plan if they have sufficient insurance? When goal is fixed for long term then why to look at surrender option of after 5th year? Also, how can this plan provide liquidity of balancing the portfolio? Ideal equity expectation for long term should be around 12% and hence forget predictions of so-called experts.

      Reply
  25. Good review and useful information.Thanks.
    Thinking to purchase money back policy.which one you suggest .Please give helpful information.

    Reply
  26. Good review useful thanks

    Reply
    • Nice review as usual as always 🙂
      Just simple query what will be other charges like mortality & misc.

      Reply

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