LIC Table 14 (Old Endowment) maturity benefits, bonus illustration, and surrender value rules.
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Do you own the classic LIC Table 14 (Endowment Assurance)? Before the modern Plan 914 or 814 dominated the market, Table 14 was the flagship policy that laid the foundation of trust for millions of Indian families. Although this plan was withdrawn prior to the regulatory changes of 2014, it remains a strictly held "Vintage Asset" for many investors. If you still hold this bond, you might be sitting on a significant accumulated bonus that outweighs modern savings instruments.

Welcome to Jeevan Bima Bazaar (JBB), your trusted guide to understanding legacy financial instruments. In this comprehensive guide, we will decode the valuation, surrender rules, and hidden benefits of your Table 14 policy, ensuring you maximize your returns in .

What is LIC Table 14? (The Legacy Plan)

The LIC Table 14, formally known as the Endowment Assurance Plan, is a traditional life insurance contract designed to provide financial protection against death throughout the term of the plan. Unlike pure term insurance, this is a savings-oriented instrument that pays a lump sum Maturity amount on survival to the end of the policy term.

JBB's analysis of the plan structure confirms that this is a "With-Profit" plan. This distinction is crucial for policyholders. Being a participating plan, it shares in the profits of the Life Insurance Corporation of India (LICI). These profits are distributed to policyholders in the form of bonuses, which significantly enhance the final payout beyond the basic Sum Assured.

For investors who purchased this plan decades ago, it serves a dual purpose: it secures the family's financial future in case of an unfortunate event and builds a tax-efficient corpus for retirement or legacy planning.

How are Maturity and Death Benefits Calculated?

Understanding the payout structure is essential to valuing your policy today. Table 14 offers distinct benefits based on whether the policyholder survives the term or passes away during it.

1. The Death Benefit (Protection)

If the life assured passes away during the policy term, the nominee is entitled to receive a lump sum payment. Jeevan Bima Bazaar (JBB) highlights that this payment is not just the basic coverage amount. The benefit includes:

  • The Sum Assured; plus
  • All Bonuses accrued to date.

This ensures that the longer the policy runs, the higher the death claim becomes, as bonuses are added annually.

2. The Maturity Benefit (Wealth Creation)

For those who survive until the end of the policy term, the payout is substantial. The Maturity Benefit includes:

  • The Sum Assured; plus
  • All Bonuses declared up to the maturity date.

💡 JBB Insight: The "Simple Reversionary Bonuses" are declared per thousand Sum Assured annually at the end of each financial year. The most critical aspect for legacy holders is the "Vesting Rule": Once declared, these bonuses form part of the guaranteed benefits of the plan. This means even if market conditions crash tomorrow, the bonuses already added to your Table 14 policy cannot be taken away. Additionally, a Final (Additional) Bonus may be payable if the policy has run for a certain minimum period, acting as a loyalty reward for long-term investors.

Thinking of Surrendering?

Many policyholders consider surrendering old policies to reinvest in newer market avenues. However, JBB strongly advises caution when dealing with Table 14. Surrendering a vintage policy often results in a financial loss compared to the maturity value.

According to the Corporation's policy on surrenders, buying a life insurance contract is a long-term commitment. However, if you must exit, you need to understand the liquidity rules:

  • The 3-Year Lock-in: The policy may be surrendered only after it has been in force for 3 years or more. If you stop paying premiums before this period, you lose the money paid.
  • Guaranteed Surrender Value (GSV): The contract guarantees a surrender value equal to 30% of the basic premiums paid.
    • Note: This calculation excludes the first year's premium and any extra premiums paid for riders.
  • Special Surrender Value (SSV): In practice, the Corporation is known to pay a Special Surrender Value which is generally equal to or more than the Guaranteed Surrender Value. This value depends on the duration for which premiums have been paid and the policy duration at the date of surrender.

JBB Warning (The "Discount" Trap): It is vital to understand that the benefit payable on surrender reflects the discounted value of the reduced claim amount. What does this mean for you? Essentially, LIC calculates the claim amount you would have received (reduced proportionately because you stopped paying), and then applies a discount rate to give you cash today. This "discounting" is where the financial loss occurs. In cases of early termination, the surrender value payable may even be less than the total premiums you have paid. Therefore, holding until maturity is usually the most mathematically sound decision for Table 14 holders.

What Returns Can You Expect? (Real-Life Example)

To illustrate the potential growth of this plan, let us look at the official benefit illustration provided in the plan's documentation.

Scenario Parameters:

  • Age at Entry: 35 Years
  • Policy Term: 25 Years
  • Sum Assured:
  • Annual Premium:

The table below projects the maturity values based on assumed investment rates of return. Please note, Scenario 1 assumes a 6% return, and Scenario 2 assumes a 10% return.

Duration (Years) Total Premiums Paid Guaranteed Sum Assured Projected Benefit (Scenario 1 @ 6%) Projected Benefit (Scenario 2 @ 10%)
10 Years
15 Years
20 Years
25 Years (Maturity)

Analysis:

By the end of the term, the policyholder has paid approximately . In return, the maturity value is projected to be between and . This highlights the power of compounding bonuses over a long tenure.

Case Study: Mr. Verma's Legacy Dilemma

To understand the real-world application of LIC Table 14, let’s consider Mr. Verma, a 50-year-old government employee based in Jaipur.

The Situation:

Mr. Verma purchased a Table 14 policy 15 years ago with a Sum Assured of . Today, he is approached by a private bank relationship manager suggesting he surrender his "old-fashioned" LIC policy to invest in a volatile market fund.

The JBB Analysis:

  • Vested Bonus: For 15 years, LIC has declared bonuses annually. These are now guaranteed additions to his policy.
  • Surrender Loss: If he surrenders now, he will receive a discounted value. He effectively loses the "Final Additional Bonus" which is usually paid at the end of the term.
  • Risk Profile: Table 14 offers capital protection. Shifting to a market fund at age 50 introduces risk to his principal amount.

The Verdict:

Mr. Verma decides to continue the policy. By holding for the remaining 10 years, he secures the "Sovereign Guarantee" backed safety and qualifies for the Final Additional Bonus, which often makes a significant difference in the final yield. Surrendering a vintage Table 14 policy when it is close to maturity is rarely a wise financial move.

Official LIC Table 14 Brochure (Original PDF)

This is the original sales brochure issued by LIC for Table 14 before its withdrawal. For existing policyholders, this document is the ultimate reference to verify:

  • Surrender Rules: The 30% rule after 3 years.
  • Benefit Illustration: Projected maturity values at 6% and 10%.
  • Bonus Structure: How profits are shared.
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Is Loan Facility Available on Table 14?

One of the reasons Table 14 remains popular among legacy holders is its flexibility regarding liquidity and payments.

  • Premium Payment Modes: Policyholders had the option to pay premiums Yearly, Half-yearly, Quarterly, Monthly, or through Salary deductions. This flexibility allowed salaried individuals to automate their savings.
  • Supplementary Benefits: The plan allowed for optional benefits (like Accident Benefit) to be added for extra protection, requiring an additional premium.
  • Liquidity (Loans): While not explicitly detailed in the summary, standard endowment plans like Table 14 generally offer loan facilities once the policy acquires a surrender value (after 3 years). This allows you to access funds without breaking the policy.

FAQ: Frequently Asked Questions

No, Table 14 is a withdrawn plan. It has been replaced by newer versions like the New Endowment Plan (Table 914). This guide is intended for existing policyholders who purchased the plan before its discontinuation.

Not entirely. The "Sum Assured" and "Vested Bonuses" (once declared) are guaranteed. However, future bonuses depend on the future profits of the Corporation and are not guaranteed. The illustration uses projected rates of 6% and 10%.

You can surrender the policy after it has been in force for at least 3 years. Surrendering before 3 years results in a total loss of premiums paid.

The Guaranteed Surrender Value is calculated as 30% of the total basic premiums paid, excluding the premium paid for the first year. It also excludes any extra premiums paid for riders.

Yes. If the policyholder dies during the term, the nominee receives the Sum Assured plus all bonuses accrued up to the date of death in a lump sum.

Conclusion:

LIC Table 14 is not just a policy; it’s a financial heirloom. Before making any decision to surrender, check its current bonus status and the potential Final Additional Bonus. In a volatile economic environment, the stability of this vintage plan is a rare luxury. You can find more such plans in our 'LIC Legacy Plans Directory'. Click here to view the complete Master Index.

Explore More: Our archive contains details on many other Whole Life and Endowment plans (like Table 5 and others). To see the next important legacy policy in this series, click the Next button below.

Disclaimer:This information is based on the official LIC Sales Brochure for Table 14. Investment returns in illustrations are projected and not guaranteed. Please consult your LIC branch for actual surrender and loan values. This content is for educational purposes only.