LIC New Endowment Plan (Plan 914): Actuarial & Financial Guide
The LIC New Endowment Plan (Table No. 914) is the foundational regular-premium, with-profits endowment life assurance plan of the Life Insurance Corporation of India. Designed for risk-averse savers who value sovereign-guaranteed security alongside annual bonus accruals, Plan 914 allows policyholders to choose an exact policy term from 12 to 35 years to match specific life goals—such as funding child education or retirement corpus.
Plan 914 features a regular premium payment structure (PPT equals Policy Term). The policyholder pays premiums throughout the term, and upon surviving the tenure, receives the Basic Sum Assured + Accrued Simple Reversionary Bonuses + Final Additional Bonus (if applicable).
Eligibility Parameters & Rebate Scales
| Parameter | Specification |
|---|---|
| Minimum Sum Assured | ₹1,00,000 (No upper limit, in multiples of ₹5,000) |
| Entry Age Range | 8 Years to 55 Years (completed) |
| Policy Term & PPT | 12 to 35 Years (PPT equals Policy Term) |
| Maximum Maturity Age | 75 Years |
| Modal Rebates | 2% discount for Yearly mode; 1% for Half-Yearly mode |
| High SA Rebate | ₹1.50/₹1,000 SA (₹2L - ₹4.95L); ₹2.00/₹1,000 SA (₹5L and above) |
Bonus Mechanics: SRB & Final Additional Bonus (FAB)
Plan 914 participates in the profits of LIC's life insurance business. Bonus rates declared during annual valuations reflect policy tenure:
Simple Reversionary Bonus (SRB)
For short terms (12-15 years), SRB is approximately ₹34 per ₹1,000 SA. For medium terms (16-20 years), SRB is ₹38 per ₹1,000 SA. For longer horizons (21-35 years), SRB escalates to ₹44 to ₹48 per ₹1,000 SA, multiplying the compounding return over time.
Final Additional Bonus (FAB)
For policies with a term of 15 years or more, LIC declares a one-time FAB at maturity. For long tenures like 25 to 30 years, FAB can reach ₹200 to ₹450 per ₹1,000 SA, substantially augmenting total maturity proceeds.
Statutory GST & Income Tax Exemption (FY 2026-27)
GST Application Rules
- Year 1 Premium: 4.5% GST (2.25% CGST + 2.25% SGST).
- Year 2 Onwards: 2.25% GST (1.125% CGST + 1.125% SGST).
Section 80C & Section 10(10D)
Premiums qualify for tax deductions up to ₹1,50,000 under Section 80C. Maturity proceeds and death claim settlements are 100% tax-free under Section 10(10D) of the Income Tax Act.
Frequently Asked Questions (FAQ)
What is LIC New Endowment Plan (Plan 914)?
LIC New Endowment Plan (Plan 914) is a traditional with-profits endowment assurance policy. It requires regular premium payments over a chosen policy term (12 to 35 years) and pays out the Basic Sum Assured along with accumulated Simple Reversionary Bonuses and Final Additional Bonus upon surviving to maturity or in the event of demise.
What are the entry age and policy term limits for Plan 914?
Minimum entry age is 8 years completed, and maximum entry age is 55 years. Policy terms range from 12 to 35 years, with the maximum maturity age capped at 75 years.
What are the latest Simple Reversionary Bonus rates for Plan 914?
Bonus rates declared per ₹1,000 Sum Assured are: ₹34 for terms 12-15 years, ₹38 for terms 16-20 years, and ₹44 to ₹48 for terms above 20 years. Longer policy terms also attract substantial Final Additional Bonuses (FAB).
What rebates are offered on LIC Plan 914?
Plan 914 offers a 2% modal rebate on tabular premium for Yearly mode and 1% for Half-Yearly mode. High Sum Assured (HSA) rebates are also provided: ₹1.50 per ₹1,000 SA for ₹2 Lakh to ₹4.9 Lakh SA, and ₹2.00 per ₹1,000 SA for ₹5 Lakh and above.
Are maturity proceeds under Plan 914 tax-free?
Yes, under Section 10(10D) of the Income Tax Act, the entire maturity amount is tax-free provided the annual premium does not exceed 10% of the Sum Assured and aggregate premiums across traditional policies issued on or after April 1, 2023 do not exceed ₹5,00,000.
Case Study: 30-Year-Old, ₹10 Lakh SA, 21-Year Term (Plan 914)
To demonstrate the compounding growth and maturity mechanics of the New Endowment Plan, consider a 30-year-old individual purchasing a ₹10,00,000 Sum Assured policy for a 21-year term:
- Annual Basic Tabular Premium: ~₹48,200 (before modal and high SA rebates).
- Rebates Applied: 2% Yearly mode rebate (-₹964) and ₹2/₹1,000 High SA rebate (-₹2,000), reducing the base premium to ~₹45,236.
- GST Impact: Year 1 GST (4.5%) = ~₹2,035; Renewal GST (2.25%) = ~₹1,017 per year.
- Vested Simple Reversionary Bonus: ₹44/₹1,000 SA × 1,000 × 21 years = ₹9,24,000.
- Estimated Final Additional Bonus (FAB): ₹100/₹1,000 SA × 1,000 = ₹1,00,000.
- Total Tax-Free Maturity Payout: ₹10,00,000 (Sum Assured) + ₹9,24,000 (SRB) + ₹1,00,000 (FAB) = ₹20,24,000.
