LIC Plan 814 (New Endowment) details showing maturity calculator, loan percentage, and strict 3-year surrender rules.
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Welcome to Jeevan Bima Bazaar (JBB), your authoritative archive for life insurance intelligence. Do you or your clients hold the LIC New Endowment Plan (Plan 814) purchased between 2014 and 2020? You possess a 'Golden Asset' because this plan offers a structural advantage that is rare in today's market—a 10 times Death Benefit multiplier. However, unlike modern policies that offer liquidity after two years, Plan 814 carries a strict 3-year lock-in period. This comprehensive guide decodes the official Circular CO/PD/43 to help you manage this legacy policy, calculate maturity correctly, and understand the rigid revival norms applicable in .

Key Features of Plan 814

JBB's analysis of the historical data confirms that Plan 814 was a flagship "With-Profits" product. For agents servicing these policies today, knowing the exact technical specifications is crucial for handling queries regarding surrender or death claims.

The Technical Matrix

  • Launch Date: The plan was officially introduced on 3rd January, 2014.
  • Plan Type: It is a regular premium paying conventional With-Profits Endowment Assurance plan.
  • Unique Identification Number (UIN): 512N277V01.
  • Minimum Basic Sum Assured: .
  • Grace Period: A period of 30 days is allowed for Yearly, Half-yearly, and Quarterly modes, while 15 days is allowed for Monthly mode.

💡 JBB Insight: The "10x Cover" is the USP. Under Plan 814, the "Sum Assured on Death" is defined as the higher of the Basic Sum Assured or 10 times the annualized premium. This is significantly higher than many savings-oriented plans available today.

Case Study: Mr. Ajay’s Maturity & Death Benefit Calculation

To demonstrate the power of this legacy plan, let's analyze the policy of Mr. Ajay, a prudent investor who bought Plan 814 in 2015.

  • Policyholder: Mr. Ajay (Age: 30 at entry)
  • Sum Assured:
  • Policy Term: 20 Years
  • Premium Paying Term: 20 Years

Scenario A: The Wealth Accumulation (Maturity)

If Mr. Ajay survives to the end of the policy term in 2035, he is eligible for the Maturity Benefit. According to the circular, this includes:

  • Basic Sum Assured ().
  • Vested Simple Reversionary Bonuses declared throughout the term.
  • Final Additional Bonus (FAB), if eligible.

JBB estimates that due to the long-term compounding of bonuses, the final payout will significantly exceed the total premiums paid.

Scenario B: The Protection Shield (Death Claim)

If an unfortunate event occurs during the policy term, the nominee receives the Death Benefit.

  • Formula: The payout is the "Sum Assured on Death" plus vested Simple Reversionary Bonuses and FAB.
  • The Safety Net: The death benefit shall not be less than 105% of the total premiums paid as on the date of death.

What happens if you stop paying premiums? (Paid-up Rules)

This is the "Danger Zone" for Plan 814 policyholders. Unlike newer plans (like Plan 914) that acquire value after 2 years, Plan 814 follows the older, stricter regime.

1. The 3-Year Lock-in Rule

JBB warns that if premiums are not paid for at least three full years, the policy becomes wholly void, and all money paid is forfeited. The policy acquires a "Paid-up Value" only after at least three full years' premiums have been paid.

2. The Paid-up Formula

If you stop paying after 3 years, the Sum Assured is reduced.

  • Calculation: Paid-up Sum Assured = Basic Sum Assured × (Number of premiums paid / Total number of premiums payable).
  • Future Bonuses: A paid-up policy is not entitled to participate in future profits, but existing vested bonuses remain attached.

3. The Revival Trap (Critical for Agents)

If a policy lapses, it must be revived within a specific window. For Plan 814, a lapsed policy can be revived within a period of 2 consecutive years from the date of the first unpaid premium.

Note: This is shorter than the 5-year window available in newer plans. Agents must alert clients immediately if they are approaching this 2-year deadline in .

LIC Plan 814 Loan Calculator & Surrender Value

Liquidity is a major concern for long-term investors. Here is how the loan and surrender mechanics work under Circular CO/PD/43.

Eligibility Criteria

Both Loan and Surrender facilities are available only after the payment of premiums for at least 3 full years.

Loan Limits (The Hidden Tier)

The maximum loan you can get depends on your policy term. JBB advises reviewing this table carefully, as longer-term policies have lower loan-to-value ratios for paid-up policies.

Policy Term Max Loan (% of Surrender Value) for In-force Policies Max Loan (% of Surrender Value) for Paid-up Policies
Upto 23 years 90% 80%
24 to 27 years 80% 70%
28 to 31 years 70% 60%
32 to 35 years 60% 50%
Source: LIC Circular CO/PD/43.

Surrender Value Logic

  • Guaranteed Surrender Value (GSV): This is a percentage of total premiums paid (excluding taxes and rider premiums).
  • Special Surrender Value (SSV): LIC may pay a higher SSV based on the discounted value of the Paid-up Sum Assured and vested bonuses.

LIC Plan 814 Circular (Ref: CO/PD/43)

This is the original regulatory circular issued by the Life Insurance Corporation of India (LIC) on 2nd January 2014 for the New Endowment Plan (Plan No. 814). Unlike simplified brochures, this technical document (Ref: CO/PD/43) acts as the absolute legal reference for your policy rights.

Key Insights Inside:

  • Verification: Confirm the official rules for the 10x Death Benefit eligibility.
  • Liquidity Check: Read the strict clauses regarding the 3-year lock-in period for Loans and Surrender.
  • Revival Alert: Verify the critical 2-year revival window rule for lapsed policies.
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Suicide Clause and Exclusions

It is vital to understand the exclusions to avoid claim rejection.

  • Within 12 Months of Inception: If the Life Assured commits suicide within 12 months from the commencement of risk, the claim is rejected. However, LIC will refund 80% of the premiums paid, provided the policy is inforce.
  • Within 12 Months of Revival: If suicide occurs within 12 months of revival, the higher of 80% of premiums paid till death or the Surrender Value is payable.

FAQ: Frequently Asked Questions

No. Under Plan 814, the policy acquires a surrender value only after at least three full years' premiums have been paid. If you stop after 2 years, you lose the entire amount.

You can revive a lapsed policy within 2 consecutive years from the date of the first unpaid premium. This is strictly enforced.

Generally, the Death Benefit is tax-free under Section 10(10D) of the Income Tax Act. However, taxes paid on premiums (Service Tax/GST) are not considered for benefit calculation.

You have a grace period of 30 days (for Y/H/Q modes). If death occurs during this grace period, the claim is still paid after deducting the unpaid premium.

No, the Accidental Death and Disability Benefit Rider are optional and requires an additional premium. If opted, it provides an additional Sum Assured in case of accidental death.

Conclusion:

Owning LIC Plan 814 is a privilege due to its high life cover and consistent bonus history. However, the strict 2-year revival window requires you to remain vigilant to avoid lapsation of this valuable asset. This guide is a key chapter in our 'LIC Legacy Plans Directory'. Click here to view the complete Index of Discontinued Plans.

Continue Reading: Before the modern endowment plans existed, there were the 'Classic Tables' that defined insurance for generations. In the next section, we explore one such foundational plan. Click the Next button below to continue your journey into the archives.

Disclaimer:This analysis is based on LIC Circular Ref: CO/PD/43. Rules regarding revival, taxes and loans are subject to change by LIC and the Government. Please verify with your branch official.