Guaranteed Investments, lic international
The Double Cover Endowment Plan from LIC International is a fine blend of Investment and enhanced protection.
It is ideal for young residents looking to accumulate and grow wealth while protecting loss of income due to death and disability.
How does it work?
Double Cover Endowment Plan is much similar to other endowment plans of LIC International, providing a sum assured with a vested bonus at Maturity.
Click here to know how Bonus is calculated on an Endowment Plan?
The difference is the double cover; ie., twice the sum assured this plan pays out in the event of claim due to death of the insured.
This plan can be ideal for you if you are between age 20 - 45 and looking to save your tax-free income to achieve your future financial goals while protecting loss of income.
Why choose Double Cover Endowment Plan vs Participating Endowment?
The Double cover plan helps young individuals avail additional cover at an attractive price; the following table shows the premiums amounts for a 30 years old individual for a sum assured of $100,000 for a cover term of 20 years.
| Particulars | Participating Endowment | Double Cover Endowment |
| Claim payable on death at 10th Year | $133,500 | $232,000 |
| Accidental Death in 10th year (optional rider) | $233,500 | $332,000 |
| Maturity Amount after 20 years | $165,000 | $165,000 |
| Limited term premium PA | $14,065.38 | $14,807.45 |
| Full-term premium PA | $5,165.31 | $5,435.00 |
| Single Premium | $66,141.32 | $53,540 |
*Premiums quoted above exclude VAT
From the above table it is evident that the difference in premium payable over a limited term and full term is not very huge and if life cover in addition to savings is your priority, then Double cover endowment is ideal.
If your priority is savings and life cover is not important then you can choose the Participating Endowment Plan(PEN)
When investing single premium plan, the DCE option is more attractive, as you can get a higher cover amount and similar maturity amount at a much lower premium.
Plan Features
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Particulars
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Minimum
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Maximum
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|
Sum Assured
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US $ 2,500
|
US$1,000,000
|
|
Age Entry
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18 years (Last Birthday)
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50 years (Nearer Birthday)
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Age at Maturity
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|
65 years (Nearer Birthday)
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|
Term
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10, 15, 20, 25 years
|
|
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Mode of Premium Payment
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Yearly, Half Yearly, Quarterly, Monthly and single
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Benefits
- Paid Up Value - The Paid up value feature is very useful in times of income uncertainty. Once you have paid two years premium for a limited term plan or 3 years premium for a full term plan, the plan acquires a paid-up value, ie., the Sum assured is reduced on a Pro-rata basis, and paid on death or maturity of the plan along with the vested bonus
- Portability to India -
- Policy Loan
- Choice of premium payment modes
Challenges
While there many benefits, there are also few limitations as well;
- Only 4 term options of 10,15, 20 & 25 years do not give the adequate flexibility to match the maturity and cover term to financial goals, especially education planning.
- A shorter cover term in comparison to the PEN(Maximum 35 years), while the DCE maximum is 25 years only
Summary
Given the benefits and limitations, the Double Cover Endowment is ideal for short-term protection and savings needs.
This plan is more efficient and beneficial if you are looking to invest a lump sum for a period of 10 - 25 years. The XIRR in this can be around 6.00%. Given the capital guarantee and consistently increasing bonus history, this option can be an attractive lump sum investment option.
Expert Advice
To know more about the Double Cover Endowment and to help you choose the best protection/investment plan, arrange a free Holistic Financial Planning session with me.
