Understanding LIC Plan 717: Single Premium Endowment Framework
The LIC Single Premium Endowment Plan (Plan 717) represents one of the most reliable and conservative wealth preservation schemes ever introduced by the Life Insurance Corporation (LIC) of India. Designed specifically for long-term investors, professionals, and high-net-worth individuals, Plan 717 (often recognized under updated Table 917 or older Table 817) operates on a single payment structure. This eliminates the necessity of making recurring yearly, half-yearly, or monthly premium contributions. By committing capital just once, the policyholder enjoys full-scale compounding growth and life insurance coverage over policy terms spanning from 10 to 25 years.
As a traditional participating plan, LIC Single Premium Endowment is eligible to receive bonuses declared annually by the corporation. Vested Simple Reversionary Bonuses accrue continuously during the term and are paid alongside the basic Sum Assured and a potential Final Additional Bonus (FAB) at maturity. The plan represents an optimal asset class for parents wanting to build educational funds for their children, or senior professionals securing guaranteed retirement corpuses without recurring premium payment risks.
Core Actuarial Eligibility & Policy Conditions
To utilize the LIC Plan 717 Premium Calculator accurately, you must understand the strict boundaries established by LIC’s underwriting parameters. The plan features strict age and term conditions:
| Policy Parameter | Minimum Limit | Maximum Limit |
|---|---|---|
| Entry Age | 90 Days (0 Years completed) | 65 Years (Nearest Birthday) |
| Policy Term (PT) | 10 Years | 25 Years |
| Basic Sum Assured | ₹50,000 | No Upper Limit (Unlimited) |
| Maturity Age | 18 Years (Completed) | 75 Years (Completed) |
| Premium Mode | Single Premium Only (One-time lump sum) | |
Actuarial Mechanics of Single Premiums vs. Policy Term
Under classic actuarial design, Plan 717 features a highly unique premium curve. Unlike regular premium endowment policies where a longer term results in paying more total premium, a Single Premium Plan offers cheaper upfront rates for longer policy terms.
This occurs because LIC has a longer duration (e.g., 25 years versus 10 years) to hold, invest, and compound your single deposit. For instance, for a 30-year-old policyholder purchasing a ₹1,00,000 Sum Assured policy:
- A 10-Year Term requires a single base premium of approximately ₹79,000.
- A 15-Year Term requires a single base premium of approximately ₹73,500.
- A 25-Year Term requires a single base premium of approximately ₹62,500.
Hence, if you have a long-term goal (like a child's future marriage or your retirement) choosing a longer term yields massive financial leverage—requiring far less capital deposit on Day 1 to achieve the exact same guaranteed maturity corpus.
Tabular High Sum Assured Rebates (Premium Discounts)
LIC encourages high-value wealth building by offering structured discounts on the single premium rate per ₹1,000 Sum Assured. These rebates reduce the net rate significantly:
- Sum Assured under ₹1,00,000: Nil rebate.
- Sum Assured ₹1,00,000 to ₹1,95,000: ₹18 rebate per ₹1,000 Sum Assured.
- Sum Assured ₹2,00,000 to ₹2,95,000: ₹25 rebate per ₹1,000 Sum Assured.
- Sum Assured ₹3,00,000 and above: ₹30 rebate per ₹1,000 Sum Assured.
This rebate structures the plan exceptionally well for large lump-sum deposits, as the high-volume discount heavily lowers the actual single premium cost.
Survival and Maturity Benefit Formulas
If the life assured survives to the end of the policy term, the policy terminates, and a substantial tax-free corpus is paid. The maturity calculation formula is:
Our calculator models these bonuses utilizing standard historical metrics declared by LIC: ₹38–₹40 per ₹1,000 SA for short terms, ₹42–₹44 for mid-terms, and ₹47–₹48 for long 25-year terms.
Dual Age-Dependent Death Benefit Structure
Plan 717 provides robust life insurance security during the policy term. In the unfortunate event of the policyholder's demise before policy maturity, the nominee receives:
The Sum Assured on Death is calculated strictly based on the age of the proposer at inception:
- Entry Age under 50 Years: The Sum Assured on Death is the higher of the Basic Sum Assured or 1.25 times the Single Premium (excluding taxes).
- Entry Age 50 Years & Above: The Sum Assured on Death is the higher of the Basic Sum Assured or 1.10 times the Single Premium (excluding taxes).
This specialized multiplier protects younger policyholders by guaranteeing that the risk cover remains significantly higher than the initial upfront capital invested, providing absolute security for families.
Tax Implications: Section 80C & 10(10D) Safety
LIC Single Premium Endowment (Plan 717) offers exceptional tax efficiency under the Indian Income Tax Act, 1961:
- Section 80C Premium Deductions: The single premium paid is eligible for deduction from taxable income up to a maximum limit of ₹1,50,000 in the financial year of purchase.
- Section 10(10D) Tax-Free Maturity: The entire maturity corpus, including all bonuses and FAB, is 100% tax-exempt at receipt, provided the single premium does not exceed 10% of the basic Sum Assured. If the premium exceeds 10%, the maturity proceeds may be taxable at slab rates (though death claims remain tax-exempt in all cases).
LIC Single Premium Plan 717 - Frequently Asked Questions
Q1: What are the primary benefits of a Single Premium plan over yearly plans?
Single premium plans offer ultimate peace of mind: there are no yearly premium payment deadlines, zero risk of policy lapses due to non-payment, and no continuous reminders. Additionally, your capital starts compounding immediately on day one, yielding high interest efficiency.
Q2: What is the minimum and maximum entry age for Plan 717?
The minimum entry age is 90 days completed (registered as 0 years in the calculator). The maximum entry age is 65 years. The policy must mature by age 75, capping the policy term for older proposers.
Q3: Is the maturity payout entirely tax-free under Section 10(10D)?
Yes, maturity proceeds are completely tax-exempt under Section 10(10D), provided the single premium is within 10% of the basic Sum Assured. For longer policy terms, the premium is naturally much lower, comfortably qualifying for this tax safety net.
Q4: Can I surrender the policy before the maturity term ends?
Yes, Plan 717 can be surrendered at any time during the term. During the first policy year, the surrender value is 70% of the single premium paid (excl. GST). From the second year onwards, it increases to 90% of the single premium plus the surrender value of accrued bonuses.
Q5: How does the loan facility work for Plan 717?
Policyholders can opt for a loan after completing 1 full policy year. Loans are granted up to 90% of the policy's accrued surrender value, providing strong liquidity at highly competitive interest rates.
Q6: Why was Plan 717 withdrawn, and does it affect my existing policy?
LIC Plan 717 (and Table 917) was withdrawn on October 1, 2024, as part of LIC's periodic updates to match new regulatory standards. This does not affect existing policyholders. All active policies continue to accrue bonuses, remain fully covered, and will pay out maturity values as scheduled.