LIC Term Insurance Plan: Top LIC Term Plans to Invest (New)

Established in the year 1956, the Life Insurance Corporation of India (LICI) is the oldest and the largest life insurance company in the market. LIC is owned by the Government of India and enjoys complete trust in the minds of its customers. It offers a range of life insurance plans which aim to fulfil every financial need of an average individual. The plans offered by the company have attractive coverage benefits and the premiums are also affordable. Term insurance plans are among the most popular life insurance plans offered by LIC. Let’s understand the concept of term insurance and have a look into the different types of LIC term plans offered by the company.

What is a term insurance plan?

A term insurance plan is the simplest and the most basic of life insurance plan. It covers the risk of death during the policy term for a fixed sum assured. If the insured dies during the chosen term of the plan, the sum assured is paid and the policy comes to an end.

Features of term insurance plans

Term plans are characterized by the following salient features –

1. Term plans are, mostly, pure protection plans which offer only death benefit in case of death during the coverage duration. However, in some plans, the premiums might also be refunded on maturity
2. Term plans allow long coverage tenures so that you can enjoy coverage up to older ages
3. The premiums are very low since only the death risk is covered under the plan
4. You can choose very high levels of sum assured to protect your family financially in your absence
5. Term plans are traditional life insurance plans which do not earn bonus
6. Riders are also available under term insurance plans which provide additional coverage. The rider can be inbuilt in the plan’s coverage itself or available as an optional cover at the payment of an additional premium

Why buy LIC term plan?

Term insurance plans provide unparalleled financial protection to you and your family. The plan is a must because of the following benefits which the plan provides –

1. Low premiums allow affordable coverage levels. You can opt for an optimal level of coverage ensuring that your family is well taken care of in your absence
2. Longer coverage durations ensure that you are protected even in older ages
3. The premiums that you pay are allowed as a deduction under Section 80C. Moreover, the death benefit received under the plan is also tax-free in your hands under Section 10 (10D)

When to buy LIC term plan?

Term plans should be bought early on in life when you are young. As you are young, the premiums would also be low and you would be able to buy the plan easily without medical check-ups. Also, when you buy young, you can get covered from an early age and get financial security.

LIC term plans

LIC offers three different types of term insurance plans. Let’s have a look at them –

1. LIC’s Tech Term Plan

This is a newly launched online term insurance plan which you can easily buy online from the website of the company. The salient features of the plan are as follows –

• You can choose to have a uniform sum assured throughout the policy tenure or an increasing sum assured
• If increasing sum assured option is chosen, your coverage would increase by 10% every year from the 6th to the 15th policy year. This increase your double the original sum assured you selected
• Premiums can be chosen to be paid as single premiums, regular premiums or limited premiums
• Women are charged lower rates of premiums
• Non-smokers are allowed preferential premium rates which are lower than the premium rates charged from smokers
• You can get premium discounts if you choose higher levels of sum assured
• The death benefit can be chosen to be received in instalments to create a source of income for your family
• If you choose to receive the death benefit in instalments, you can get the instalments monthly, quarterly, half-yearly or annually as you want. Moreover, the instalments would be payable for 5, 10 or 15 years depending on your requirement
• The accidental death benefit rider is available as an optional which would pay out an additional sum assured if you die in an accident

Eligibility parameters of LIC’s Tech Term Plan

Sample premium rates for LIC’s Tech Term Plan

Here is a chart showing the sample premium (excluding GST) payable at different policy parameters for the given assumptions –

• Life insured – non-smoking male
• Sum assured – INR 1 crore
• Premium payment frequency – yearly
• Term of the plan – 20 years

2. LIC’s Jeevan Amar Plan

This is a pure term insurance plan which pays only a death benefit if the insured dies during the policy tenure. The plan also allows flexibility in premium payments as premiums can be paid regularly, for a limited premium or at once. Other notable features of the policy are as follows –

• There are two coverage options under the plan – level sum assured and increasing sum assured
• Under increasing sum assured coverage option, the sum assured increases by 10% from the sixth policy year till it doubles itself
• Women’s lives are charged a lower premium rate
• You can claim premium discounts for choosing a sum assured of INR 50 lakhs and above
• Non-smokers are also charged a lower rate of premium than smokers
• The plan allows you to enhance your coverage through an optional accidental benefit rider. This rider pays an additional sum assured in case of accidental death
• You can choose to take the death benefit in equal instalments over a period of 5 years, 10 years or 15 years. These instalments can even be availed monthly to allow a regular source of income for your family

Eligibility parameters of LIC’s Jeevan Amar Plan

Sample premium rates for LIC’s Jeevan Amar Plan

The sample premium rates (excluding GST) which are payable at different coverage options are shown below. These premiums have been computed considering the following assumptions –

• Life insured – non-smoking male
• Sum assured – INR 50 lakhs
• Premium payment frequency – yearly
• Term of the plan – 20 years

3. LIC’s Anmol Jeevan II Plan

This is also a pure protection term insurance plan which has no maturity benefit but pays a lump sum death benefit in case of premature death. The features of the plan are as follows –

• Premiums can be paid annually or semi-annually
• The premiums are very low and affordable
• Coverage is available for up to 25 years

Eligibility parameters of LIC’s Anmol Jeevan II Plan

Sample premium rates for LIC’s Anmol Jeevan II Plan

Here is a chart of sample premiums (excluding GST) payable at different ages and policy durations if the following assumptions are taken into consideration –

• Life insured – non-smoking male
• Sum assured – INR 15 lakhs
• Premium payment frequency – yearly

Exclusions in LIC Term Plans

Under all the above-mentioned term insurance plans offered by LIC, suicides are not covered. If the insured dies due to suicide within 12 months of buying the policy or within 12 months of reviving a lapsed policy, the death benefit is not paid. In such cases, 90% of the single premium paid or 80% of the aggregate premiums paid till death would be refunded and the policy would be terminated.

Riders offered by LIC

LIC offers a range of riders with its insurance plans. These riders come at an additional premium and increase the scope of coverage offered by the plan. The riders which are offered are as follows –

1. LIC’s Linked Accidental Death Benefit Rider
   This rider is available with LIC’s unit linked insurance plans. The rider pays an additional sum assured if the insured dies in an accident during the term of the plan.
2. LIC’s Accidental Death and Disability Benefit Rider
   This rider is available with traditional life insurance plans offered by LIC. The rider covers accidental death and disability. If the insured dies in an accident, an additional sum assured is paid. Alternatively, if the insured suffers permanent disability due to an accident, an additional sum assured would be paid in instalments over 10 years.
3. LIC’s Accident Benefit Rider
   This rider covers only accidental death during the plan term. An additional sum assured is paid if the insured suffers accidental death within the policy tenure.
4. LIC’s New Critical Illness Benefit Rider
   This is a critical illness rider which covers 15 major illnesses. If the insured is diagnosed with any of the 15 covered illnesses, the rider sum insured is paid immediately.
5. LIC’s New Term Assurance Rider
   If the insured dies during the term of the policy due to any reason, an additional sum assured would be paid under the rider.

How to apply for LIC Term Plans?

LIC’s Tech Term Plan can be bought online from the company’s website directly as it is an online plan. LIC’s Jeevan Amar and Jeevan Anmol II policies, however, can be bought from a LIC agent or from the branches of the company itself. LIC also allows you online purchase facilities wherein the plans of the company can be bought online through LIC’s website. You should, however, check which plans are offered online to buy what you need.

Documents required for buying LIC term plans

The following documents would be required if you want to buy LIC term plans –

1. Photographs
2. Proposal form, filled and signed
3. Age proof
4. Identity proof
5. Income proof
6. Address proof

Claim process under LIC term plans

Death claims under LIC term plans can be settled if you follow the below-mentioned process –

• The nominee should inform LIC of the death of the insured. This intimation should be given to the branch from where the policy has been bought. For online policies, you can call LIC’s customer care number to intimate about the death claim
• The nominee should, then, download and fill up Claim Form ‘A’ available in Form number 3783
• The form should then be submitted to LIC along with the death certificate of the insured issued by the municipal corporation
• LIC would verify the claim form and the documents submitted and would pay the death claim to the nominee

You can also make a death claim through Turtlemint if you have bought the term insurance plan from Turtlemint’s website. Turtlemint has an independent claim handling department which takes care of the claim process on behalf of Turtlemint’s customers. You just have to inform Turtlemint at 1800 266 0101 or by sending a mail at claims@turtlemint.com and the company would get your term insurance claims settled.

Documents required for claims

Besides the claim form and the death certificate, the following documents would also have to be submitted for the settlement of a death claim –

1. Original policy bond
2. Assignment deeds, if any
3. Police FIR if the insured died in an accident
4. Bank details of the nominee so that the claim can be directly credited to the nominee’s bank account
5. Identity proof of the nominee
6. Any other documents if required by LIC