The Life Insurance Corporation of India was established in the year 1956 as the sole life insurance company in India. Till the year 2000 LICI enjoyed a complete monopoly in the life insurance business before other private players entered the life insurance market. Today, even when there are about two dozen life insurance companies, LIC enjoys the largest market share in terms of premiums collected and the number of policies sold. Moreover, the company also boasts of having the largest customer base since people have an intrinsic trust in LIC when it comes to buying life insurance.
LIC offers a range of life insurance plans to its customers and term plans, as well as whole life plans, are also a category of life insurance plans offered by the company. Let’s understand what these plans are and the corresponding plans in each category which the company offers–
A term insurance plan is a basic life insurance plan which offers to pay the sum assured if the insured dies during the term of the plan. In case the plan matures and the insured is alive, term insurance plans, usually, do not pay any maturity benefit. Term plans are, therefore, also called pure protection plans as they cover the death risk of the insured.
A whole life plan is like a term insurance plan with no fixed policy duration. The plan runs for the entire lifetime of the insured until the insured attains 99 or 100 years of age. During this period, if the insured dies, the sum assured is paid as the death benefit.
Term plans have the following distinct features –
LIC of India offers three types of term insurance plans which are as follows –
This is a pure term plan which pays only a death benefit in case the insured dies during the policy tenure. The salient features of the plan are as follows –
This plan is also a pure protection plan which pays the sum assured only if the insured dies during the term of the policy. Other features of the plan include the following –
This is an online term insurance plan which is offered by LIC through online platforms. Since the plan is online, it can be bought easily by filling up an online proposal form and paying the premiums online. The features of the plan are as follows –
LIC offers only one whole life plan which is LIC’s Jeevan Umang. The features of the plan are as follows –
Yes, a grace period of 30 days is allowed in all term insurance plans offered by LIC. Premiums can be paid within the grace period and the policy would not lapse
No, since LIC term plans are pure protection plans there is no surrender value. If a premium payment is stopped the plan would lapse and no benefit would be payable.
If the insured commits suicide and dies anytime within 12 months of buying the policy, the sum assured would not be paid as a death benefit. In such cases, the premiums paid are refunded back.
No, LIC’s term plans do not offer any additional rider. However, LIC’s whole life plans have a host of optional riders which can be selected as per the choice of the policyholder.
Only return of premium term plans have a maturity benefit wherein the premium paid is refunded back. Other plans do not have any maturity benefit. LIC’s term plans are pure protection plans and have no maturity benefit.
No, the bonus is not allowed under LIC term insurance plans or LIC whole life plans.