Calculators LIC plans Single Premium Endowment Review
LIC Single Premium Endowment (Plan 717) is a participating endowment where the entire premium is paid in one lump sum at inception — no recurring annual premiums. For a 30-year-old buying ₹5 lakh sum assured for 15 years, the single premium is approximately ₹3.34 lakh (₹669/₹1,000 SA). At current SRB of ₹38/₹1,000 SA/yr and FAB ≈ ₹20/₹1,000 SA at 15 yrs (rising sharply to ₹450 at 25 yrs per the standard endowment ladder), the projected 15-yr maturity is approximately ₹6.7 lakh — an XIRR of roughly 5%. Because the full premium is paid upfront, the policy never lapses for non-payment, which is a significant advantage for irregular-income earners.
Anyone who has just received a lump sum (annual bonus, sale proceeds, inheritance, retirement corpus) and wants to deploy it into a tax-efficient guaranteed-return vehicle without taking on a recurring premium discipline. Particularly attractive for irregular-income earners (consultants, small-business owners, freelancers) for whom annual-premium plans carry meaningful lapse risk — once paid, this policy cannot lapse.
Anyone whose investable lump sum is small enough that the loss of liquidity stings — the corpus is locked for the chosen term, with surrender penalties especially harsh in the first 3–5 years (recovery often 80–90% of single premium, not the cumulative-premiums-comparable benchmark used for annual-pay plans). Anyone who could otherwise deploy the lump sum into a tax-efficient mutual fund SWP — the after-tax XIRR comparison is closer than the headline 6.5% suggests.
Future SRB compression directly hits the maturity — with all the premium already deployed, you have no opportunity to redirect future contributions. Liquidity needs in years 1–3 force a surrender at meaningful loss; the loan facility (available from month 3) is the right release valve in that scenario. The single premium per ₹1,000 SA varies sharply by term — a 10-year policy costs roughly ₹781/1000 versus ₹507/1000 for 25-year, so picking a term shorter than your actual horizon is a structural overspend.
Our headline XIRR uses the middle premium-paying term (15 years against a 21-year policy term), excludes optional rider premiums from the cash-flow base, and assumes the latest declared simple reversionary bonus rate holds for the full term. Try other PPTs and bonus assumptions on the Single Premium Endowment calculator.
Last updated · site changelog