LIC Dhan Vriddhi Plan 869: Single Premium Guide

LIC Dhan Vriddhi (Plan 869) is a single premium, non-participating, closed-ended endowment plan. LIC offers it for limited subscription windows. If you miss the window, you cannot buy it until LIC opens it again. This is part of what makes it different from LIC's regular portfolio.

**What is a single premium plan**

Instead of paying premiums annually or monthly over the policy term, you pay the entire premium once upfront. LIC then provides life cover for the full policy term and returns a guaranteed maturity amount at the end.

**How Dhan Vriddhi works**

Dhan Vriddhi offers three policy term options: 10, 15, or 20 years. The maturity benefit is the Sum Assured on Maturity, which is a multiple of the single premium depending on the chosen term.

For a 10-year term, the maturity factor is approximately 1.75 times the single premium. For a 15-year term, around 2.5 times. For a 20-year term, around 3.0 times. These multiples change based on the specific subscription window and LIC's then-current offer terms.

**Death benefit**

If the policyholder dies during the term, the nominee receives 1.25 times the single premium or the Sum Assured on Maturity — whichever is higher — plus any accumulated Guaranteed Additions if applicable.

**Who it suits**

This plan is ideal for someone who has received a lump sum — a gratuity, provident fund withdrawal, property sale proceeds, or an inheritance — and wants to park it in a safe, guaranteed instrument with life cover.

The single-premium nature means there is no ongoing obligation. You invest once and forget about it until maturity.

**Tax angle**

Under the Income Tax Act, the maturity amount from a single premium policy qualifies for Section 10(10D) exemption only if the Sum Assured is at least 10 times the single premium paid. Dhan Vriddhi's maturity factor is typically less than 10 times. This means the maturity gain may be taxable as capital gains in some interpretations.

This is an important detail I always discuss with clients before recommending single premium plans. The tax treatment can significantly affect the effective post-tax return.

**Comparison with fixed deposits**

A 5-year bank FD at 7% would give approximately 1.40 times the invested amount at maturity. Dhan Vriddhi's 10-year return of 1.75 times works out to roughly 5.75% per annum, which is competitive with longer-term FDs but without the reinvestment risk that FDs carry over a 10-year horizon.

**Liquidity**

Once you pay the single premium, you cannot take it back easily before the policy term ends. Surrender is allowed but comes with a deduction. This plan requires a true long-term commitment.

If you have a lump sum and want to understand how Dhan Vriddhi compares to senior citizen savings schemes, tax-free bonds, or fixed deposits for your specific tax situation, call 9415313434.