The Participating Endowment Plan ( PEN - 202) is a top-rated savings cum insurance plan from LIC International.

This plan is ideal for medium to long-term financial goals like Retirement or Children's Higher Education / Marriage.

The following are the five essential reasons to invest in LIC International Participating Endowment Plan (PEN - 202);

1. Assured Payout

Like every endowment plan, the sum assured is the fundamental feature of the PEN-202.

The sum assured is the face value of the plan, which is paid to you in the event of maturity or to your beneficiary in the event of death during the term of the policy.

As this is not a unit-linked plan, the sum assured is guaranteed to be paid either on death or maturity.

Depending on your age, the term of the plan, and the sum assured selected you will pay a specific premium towards the plan. Usually, the premium paid is much lower than the sum assured.

Given the volatile stock markets across the world, this is an ideal investment if your risk appetite is low.

2. Bonus Based Returns

Each year LIC International declares a bonus. Once declared the bonus is guaranteed and it is added to the sum assured of your policy

For Example: If the sum assured of your policy with 20 years term is $100, 000.

Your vested bonus for the year 2016 would be $3,250. The total sum assured after bonus vesting would be $103,250. 

Like this, each year's bonus will be added, till maturity. On Maturity of the policy, the sum assured along with the vested bonus will be paid to you.

In the event of early death, the sum assured with bonus vested till the previous year will be paid to your nominee

Bonus for 2016 for Endowment plans between 11-20 years is $32.50/$1000 sum assured.

3. Flexible Premium Payment Modes & Frequency

LIC International offers two premium payment modes;

1. Full Term - Premium is payable during the full term of the policy. This is good for investors who prefer a smaller premium amount over a long-term
2. Limited-Term - Premium is payable only for five years, irrespective of the policy term. This is preferred by many ex-pats as they want to complete the premium payment as early as possible. 

Being able to save and invest more than what is possible in their home country is the most prominent motivator for ex-pats in UAE. The limited-term feature helps ex-pats to take advantage of the tax-free income and aggressively save for a short period of 5 years.

Also, you can choose from yearly, half-yearly, quarterly, or monthly premium payment frequencies. However, the annual premium options provide the highest returns

4. Portability

After paying the first-year premium and completing one full policy year, you can have this policy transferred to LIC of India if you prefer to do so.

This feature is handy for Indian expats returning to India for good.

You can select a branch in India, where you want the policy to be serviced and have the policy transferred there.

 5. Paid-up Value

In the event of discontinuation of premium payment after paying first two years of a limited term plan, the sum assured of the plan is reduced on a Pro-rata basis to a Paid-up value. 

A full-term plan can acquire paid up value after three full years of premium payment.

For Eg; Ram has invested in a limited-term Participating Endowment Plan with a sum assured of $100,000. After paying premiums for two years, he was unable to pay further premiums.

As he has paid 40% of the total premiums payable, the face value of the plan was reduced to $40,000 ( 40% of the sum assured)

Many expats refrain from investing because they are unsure of their stay in UAE for a considerable period. They are not sure if they will be able to pay the premiums if they happen to leave UAE.

The Paid up value feature is a brilliant solution to this challenge. Once you have paid two years premium for a limited term plan or 3 years premium for a full term plan, you need not worry about losing your capital or protection.

Summary

The five critical reasons to invest in a Participating Endowment Plan - (PEN -202) are;

1. Assured Payout
2. Bonus Based Returns
3. Flexible Premium Modes/Frequency
4. Portability
5. Paid-up Value

To know more about the PEN-202 and other fruitful plan from LIC International & other insurance/investment companies, feel free to arrange a free initial meeting with me.