Understanding LIC New Endowment Plan 914: The Classic Savings Blueprint
The LIC New Endowment Plan (Plan 914) stands as the ultimate benchmark of traditional, regular premium savings policies in the Indian life insurance domain. Structured strictly as a non-linked, participating, individual life assurance contract, Plan 914 is designed to fulfill two critical financial objectives simultaneously: guaranteeing high-volume wealth preservation for long-term landmarks, and offering complete, stable protection for families in case of unpredictable events. Under the New Endowment Plan, policyholders make consistent premium payments throughout the policy term, which can span custom horizons from 12 to 35 years.
Plan 914 belongs to LIC's "with-profit" savings line. This means that the plan is eligible to participate in the valuation profits of the Life Insurance Corporation of India. Every fiscal year-end, LIC declares Simple Reversionary Bonuses per ₹1,000 Sum Assured which accumulate and vest continuously within the policy. Upon surviving the entire policy term, the policyholder receives a substantial, tax-free lump sum maturity payout consisting of the Sum Assured, the total accrued reversionary bonuses, and a potential Final Additional Bonus (FAB).
Core Actuarial Eligibility Guidelines & Parameters
LIC Plan 914 is highly structured with clear entry limits, terms, and Sum Assured boundaries. Review the official criteria before choosing your policy:
| Policy Parameter | Eligibility Criteria & Limits |
|---|---|
| Minimum Entry Age | 8 Years (Completed) |
| Maximum Entry Age | 55 Years (Nearer Birthday) |
| Minimum Policy Term | 12 Years |
| Maximum Policy Term | 35 Years |
| Maximum Maturity Age | 75 Years (Completed) |
| Minimum Sum Assured | ₹1,00,000 |
| Maximum Sum Assured | No Upper Limit (Unlimited, subject to income rules) |
Tabular Rebates: High Sum Assured Premium Discounts
To incentivize investors seeking higher financial security, LIC offers a direct rebate (discount) in premium rates per ₹1,000 Sum Assured. These discounts directly reduce the cost of high-value policies:
- Sum Assured ₹1,00,000 to ₹1,90,000: Nil rebate.
- Sum Assured ₹2,00,000 to ₹4,90,000: ₹1.50 discount per ₹1,000 Sum Assured on tabular premiums.
- Sum Assured ₹5,00,000 and above: ₹2.00 discount per ₹1,000 Sum Assured on tabular premiums.
For example, choosing a Sum Assured of ₹5,00,000 or above drops your baseline tabular premium rate by ₹2 per ₹1,000 SA across the board. This makes high-value policies significantly cheaper and more efficient.
Modal Rebates (Frequency Discounts)
LIC also rewards policyholders who opt for consolidated payment schedules by reducing baseline costs:
- Yearly Premium Mode: 2.0% discount (rebate) on the tabular premium.
- Half-Yearly Premium Mode: 1.0% discount (rebate) on the tabular premium.
- Quarterly Premium Mode: Nil rebate.
- Monthly Premium Mode (NACH Debit): Nil rebate.
Core Actuarial Mathematics of Plan 914
The financial performance of LIC New Endowment Plan 914 is driven by three main pillars: the Sum Assured, annual participating simple reversionary bonuses, and the Final Additional Bonus.
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Vested Reversionary Bonus: Declared annually by LIC following its fiscal valuation. Vested bonuses accumulate in the policy every year. Our calculator models conservative standard metrics: ₹38 per ₹1,000 SA per year for 12–15 year terms, ₹42 for 16–20 year terms, and ₹46 for 21–35 year terms.
Formula: Annual Bonus = (Basic Sum Assured × Bonus Rate ÷ 1000) -
Final Additional Bonus (FAB): A one-time participating dividend declared upon maturity for policies active for 15 years or more. It increases significantly for longer policy terms and higher Sum Assured tiers.
Formula: FAB Amount = (Basic Sum Assured × FAB Rate ÷ 1000) - GST Application on traditional Policies: The government levies Goods and Services Tax (GST) on insurance premiums. For Plan 914, the GST rate is 4.5% in the 1st policy year, and drops to 2.25% in all renewal years, making recurring premiums slightly cheaper.
Survival Maturity & Comprehensive Death Benefit Calculations
The plan features absolute mathematical transparency in benefit delivery, computed as follows:
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Maturity Benefit (Survival Payout): Payable upon surviving the complete policy term, provided all premiums are fully paid.
Maturity Payout = Basic Sum Assured + Vested Reversionary Bonuses + Final Additional Bonus (FAB) -
Death Benefit (Risk Payout): In the unfortunate event of the policyholder's demise during the term, the nominee receives:
Death Payout = Sum Assured on Death + Accrued Reversionary Bonuses + Final Additional Bonus (FAB)
*Sum Assured on Death is defined as the higher of 125% of the Basic Sum Assured or 7 times the annualized premium. - Accidental Death & Disability Benefit (AD&DB) Rider: If the policyholder has opted for this rider (by paying a nominal extra premium) and passes away in an accident, the nominee receives an additional Sum Assured equal to the basic Sum Assured, effectively doubling the core risk cover payout.
Tax Exemptions: Section 80C & Section 10(10D) Security
LIC Plan 914 provides massive dual tax benefits under the Income Tax Act, 1961:
- Premium Deductions (Section 80C): Premiums paid towards the policy are fully deductible from your taxable income up to a maximum limit of ₹1,50,000 per financial year.
- 100% Tax-Free Payouts (Section 10(10D)): The complete final maturity corpus—including the Sum Assured, vested reversionary bonuses, and FAB—is completely exempt from Income Tax at receipt, provided the annual premium is less than 10% of the Sum Assured.
LIC New Endowment Plan 914 - Frequently Asked Questions
Q1: What happens if I stop paying premiums under Plan 914?
If you have paid premiums for at least 2 full years, the policy does not lapse completely. It becomes a "Paid-Up" policy with a reduced Sum Assured. Vested bonuses remain intact, but future bonuses stop accumulating. You receive the paid-up value and bonuses at the end of the original term.
Q2: What is the maximum entry age and maximum policy term?
The maximum entry age is 55 years (nearer birthday). The maximum policy term is 35 years. The policy must mature by age 75, so a 55-year-old proposer can choose a maximum term of 20 years.
Q3: Are maturity and death benefits taxable under GST or Income Tax?
No. The maturity proceeds and death payouts are completely free of GST and fully exempt from Income Tax under Section 10(10D) of the Income Tax Act. GST (4.5% in Year 1, 2.25% in renewals) is only applicable on premium payments.
Q4: Can I take a loan against my LIC Plan 914 policy?
Yes. Policy loan facilities are available after completing at least 2 full years of premium payments. You can secure a loan of up to 90% of the accrued surrender value for in-force policies, providing excellent liquidity during emergency credit needs.
Q5: What are the differences between Plan 914 and Plan 936 (Jeevan Labh)?
Plan 914 is a regular premium endowment plan where you pay premiums for the entire policy term (e.g., pay for 20 years in a 20-year term). Plan 936 (Jeevan Labh) is a limited premium paying policy where you pay premiums for a shortened duration (e.g., pay for 15 years in a 21-year term). Jeevan Labh generally yields slightly higher compounding margins but has less custom term flexibility.
Q6: How does the Accidental Death & Disability Rider work?
If you attach the AD&DB Rider and pass away due to an accident during the policy term, the nominee receives the basic Sum Assured twice (once as death claim, once as rider benefit). In case of accidental permanent disability, future premiums are waived, and the rider sum assured is paid in equal monthly installments over 10 years.