Understanding the Expected Return from LIC Endowment Plan 814
The LIC Endowment Plan 814 is a traditional investment and insurance product that offers a blend of life insurance coverage and savings. Understanding the expected return from this plan involves considering several factors such as the sum assured, policy term, bonuses, and premium payment frequency. Here’s a detailed look into these aspects and why it is crucial to buy this plan through an officially licensed agent.
Factors Influencing the Expected Return
Sum Assured
Sum Assured is the amount of life insurance coverage you choose when you purchase the policy. This amount directly impacts your premium costs and the maturity benefit you receive. Higher sum assured amounts typically come with higher premiums but provide a larger payout at the maturity of the policy.
Policy Term
The policy term refers to the duration over which the plan is active. This duration determines how much you will pay in total premiums and how much will be paid out during maturity. Longer policy terms might yield higher returns due to the compounding effect of accumulated savings and bonuses.
Bonuses
Bonuses are enhancements to your policy benefit that can boost the overall return. These bonuses are not guaranteed and are based on the insurer's performance. Historically, the average bonus on LIC plans has been around 50 per 1000 sum assured, meaning a sum assured of 1,000,000 could earn you around 500,000 in bonuses over a 20-year policy term.
Premium Payment Frequency
The premium payment frequency can also influence your investment. Options include annual, semi-annual, or monthly payments. This can affect both your financial planning and the overall cost of the policy.
Illustrative Example
Sum Assured: ?1,000,000 Policy Term: 20 Years Annual Premium: ?50,000 (this figure can vary based on age and other factors) Expected Bonuses: Assuming an average bonus of 50 per 1000 sum assured, over 20 years, you might expect around ?500,000 in bonuses. Total Expected Return: At maturity, the total payout would be Sum Assured Bonuses ?1,000,000 ?500,000 ?1,500,000.
Why You Should Buy Through an Official Agent
There is a common misconception that promoting the sale of this policy directly means making false claims. It is a fact that only IRDA-licensed agents can sell licenses like the LIC Endowment Plan 814. The agent code is essential as it is required to enter the policy into the system.
By purchasing the plan through an agent, you gain access to their expertise and can receive ongoing support related to your policy. Agents can provide valuable guidance, answer your questions, and ensure you fully understand the terms and conditions of the policy.
Additionally, agents can help you compare this plan with other investment options, giving you a more comprehensive financial plan. They can also help you make informed decisions based on your individual financial goals and circumstances.
Conclusion
The actual returns from the LIC Endowment Plan 814 can vary based on the factors mentioned. It is crucial to consult with a licensed agent or visit the official LIC website for a personalized illustration that is most relevant to your specific scenario. While the expected returns can be substantial, it is also important to consider the long-term impact and align this plan with your overall financial strategy.