How to choose the best LIC policy to invest in India?

Best Lic Policy to invest in India

The Life Insurance Corporation of India was formed in the year 1956 as the sole life insurance company in India. Since then, till the year 2000, the company has enjoyed a monopoly position in the life insurance segment and has created a customer base of more than 250 million individuals. Every individual has an inherent trust in LIC’s brand name which has resulted in the company having the largest market share in the life insurance business.

LIC offers a range of life insurance policies which help in fulfilling the varied insurance needs of individuals. Among the various LIC plans issued by the company, there are some plans which are the best-selling plans as they have the most comprehensive coverage benefits. But before we dive into the best LIC policy to buy, let’s first understand the different types of LIC plans that are available:

Top LIC policy in Different Categories in India:

Among the variety of life insurance plans offered by LIC in all the above-mentioned categories, let’s discuss some of the best LIC plans that the company offers for the various types:

    • Term Insurance Plans
      Term plans are the most basic life insurance plans which cover the risk of premature death and offer financial security. The salient features of term plans are as follows –

      • High sum assured levels can be selected as premiums are very low and affordable
      • These plans usually don’t have a maturity benefit
      • There might be inbuilt riders which help in enhancing the coverage under the plan

      Term insurance helps in financially securing the policyholder’s family in case of their early death. Additionally, survival benefits might be provided by some insurers. Choosing the right term insurance policy is a crucial decision for individuals as well as their dependents, which is why comparing their features and benefits becomes a critical decision. Visit this page & enter the relevant details to help us showcase the best term insurance plans available in the market & the best available prices.

LIC’s most popular term insurance plan: LIC’s e-Term Plan:

This is an online term plan which can be bought at the click of a mouse. The plan’s USPs include the following:

      • Differential premium rates are applicable for smokers and non-smokers
      • Premium discounts help in lowering the premium charged
Name of the LIC PlanLIC’s e-Term Plan
Type of PlanTerm Insurance Plan
Whom does the plan suit?Suitable for all as the plan creates financial security for the policyholder as well for his family.
Entry Age18-60 years
Maximum Maturity Age75 years
Policy Tenure10-35 years
Sum AssuredINR 25 lakhs onwards
Death BenefitSum assured
Maturity BenefitNIL

      • Endowment Plans
        Endowment plans are those which provide both insurance coverage as well as savings. The features of endowment plans include the following –

        • A death benefit is paid on death during the policy term. If the plan matures, however, a maturity benefit is paid
        • The endowment plans provide guaranteed benefits
        • The bonus might be added if the plan is offered as a participating plan

LIC’s most popular endowment plan: LIC’s Jeevan Lakshya Plan

The plan is an endowment plan which has an enhanced death benefit. The USP of the plan is as follows –

      • Death benefit consists of annual incomes as well as lump sum payment on completion of the policy term
      • Two optional riders are available with the plan
      • Bonus additions help in enhancing the plan benefits
      • Attractive premium discounts lower the premium payable
Name of the LIC PlanLIC’s Jeevan Lakshya Plan
Type of PlanEndowment Plan
Whom does the plan suit?Risk-averse individuals who are looking to create savings along with insurance.
Entry Age18-50 years
Maximum Maturity Age65 years
Policy Tenure13-25 years
Sum AssuredINR 1 lakh onwards
Death Benefit10% of sum assured paid as annual incomes till second last policy year
+ 110% of basic sum assured on maturity
+ Accrued bonuses
Maturity BenefitBasic sum assured + accrued bonuses

Would you like to check benefits & features offered by other Life Insurance companies? Visit Turtlemint’s endowment policy comparison page & enter the relevant details to browse through the most attractive endowment plans in the market.

    • Money-back plans
      Money-back plans are like endowment plans. However, they pay the sum assured in instalments during the policy tenure rather than in a lump sum on maturity. The features of money back plans include the following –

      • Sum assured is paid in predetermined instalments at predefined intervals during the term of the policy
      • When the policy matures, the rest of the sum assured is paid along with bonus
      • In case of death of the insured within the policy tenure, the entire sum assured is paid to the nominee irrespective of the amount of money back benefits already paid.

LIC’s most popular money-back plan: LIC Jeevan Shiromani Plan

This is a money-back plan for High Net worth Individuals as the plan offers higher levels of sum assured. The USPs include the following –

    • Loyalty additions and guaranteed additions are added to the plan benefits which enhances them
    • Money-back benefits provide easy liquidity
    • There is an inbuilt critical illness benefit which covers 15 critical illnesses.
    • Four additional riders are available for customisation
    • The maturity and death benefits can be taken in instalments
Name of the LIC PlanLIC’s Jeevan Shiromani Plan
Type of PlanMoney-back plan
Whom does the plan suit?Risk-averse individuals who want to create savings with insurance and also need liquidity during the policy tenure.
Entry Age18-55 years
Maximum Maturity Age65-69 years depending on the policy term
Policy Tenure14,16,18,20 years
Sum AssuredINR 1 crore onwards
Death BenefitSum Assured on death
+ Guaranteed additions + loyalty additions (if any)
Maturity Benefit10% to 40% of the sum assured left after paying the money back benefit
+ Guaranteed additions
+ Loyalty additions

  • Unit linked insurance plans
    Unit linked insurance plans, or ULIPs are they are popularly called, are investment-oriented life insurance plans which promise market-linked returns as well as insurance coverage. Their features are as follows –

    • The premium paid is invested in market-linked investment funds chosen by the policyholder
    • There is the flexibility of switching between the available funds and partial withdrawals
    • There are different funds with different risk profiles so that investors can plan their investments according to their risk appetites
    • The returns are not guaranteed and depend on the market movements.

    ULIPs provide the benefit of investment returns along with insurance and the premium grows along with the market trends. These provide the options of different funds to the policyholder and they can choose according to their risk-capability. However, ULIPs are different from other investment options such as mutual funds and conventional life insurance policies, the best ULIP plans along with their salient features are listed here.

LIC’s most popular Unit Linked Insurance Plan: LIC’s New Endowment Plus Plan

This is the standalone unit-linked insurance plan offered by LIC which has the following salient features –

    • LIC’s Linked Accidental Death Benefit Rider can be chosen as an optional coverage benefit
    • Four funds are available for investing the premium
    • Four free switches are allowed in a policy year for changing between funds
Name of the LIC PlanLIC’s New Endowment Plus Plan
Type of PlanUnit Linked Insurance Plan
Whom does the plan suit?Suitable for risk-taking individuals who want to avail market-linked returns along with insurance
Entry Age90 days – 50 years
Maximum Maturity Age60 years
Policy Tenure10-20 years
Sum AssuredHigher of 10 times the annualised premium or 105% of total premiums paid
Death BenefitHigher of the available fund value or the basic sum assured
Maturity BenefitFund value

  • Child plans
    Child plans are insurance plans which specifically cater to the financial security of a child. The plan can be issued as an endowment, money back or unit-linked plan. The salient features include the following –

    • The plan can be bought by parents of minor children
    • The parent or the child can be the life insured
    • There is an inbuilt premium waiver benefit. This benefit waives off the premium if the parent dies. The plan continues till maturity and gives the promised benefits to provide the child with the required funds

    Child plans assure a financial corpus that can be utilised in the future. There are several versions of these plans which are inflation-proof, adding to the security of the child’s future. More information on different child plans available in India and their comparison can be found here.

LIC’s most popular child plan: LIC’s Jeevan Tarun Plan

This is a child plan which pays the money back benefits between the ages 20 to 24 years of the child and when the child attains 25 years of age, the plan matures and pays the maturity benefit. The USP of the plan includes the following benefits –

    • There are four money back benefits to choose from
    • Bonuses help increase the plan benefits
    • There is an optional premium waiver benefit rider for an enhanced coverage
    • There are two types of premium rebates which help in lowering the premium amount.
Name of the LIC PlanLIC’s Jeevan Tarun Plan
Type of PlanTraditional Child Plan
Whom does the plan suit?Suitable for parents who want to create a secured corpus for their child’s future.
Entry Age90 days – 12 years
Maximum Maturity Age25 years
Policy Tenure25 minus entry age
Sum AssuredINR 75,000 onwards
Death BenefitSum assured on death
+ Accrued bonuses
Maturity Benefit25% to 100% of the sum assured depending on the survival benefit option selected

  • Pension plans
    Pension plans are retirement oriented plans which help individuals create a retirement corpus. The features of pension plans are as follows –

    • Pension plans can be offered in two variants – deferred annuity and immediate annuity plans
    • The maturity benefit of a pension plan is used to create annuities which continue till the lifetime of the policyholder
    • Under immediate annuity plans, annuities can be received on joint lives too.

One of LIC’s popular pension plans: LIC’s Jeevan Shanti Plan

This is a pension plan for senior citizens. The plan offers you the choice of choosing a deferred annuity option or an immediate annuity option. Each option further offers a range of annuity payment options which can be selected as per requirement. The USPs of the plan is as follows –

    • The annuity payment options can be availed on a single life or on a joint life basis
    • Under the deferred annuity option, monthly guaranteed additions are added to the policy corpus till the deferment period
    • The death benefit can be taken in annuity payments, in instalments or in a lump sum as selected by the annuitant
    • A policy loan is also available under some annuity options
Name of the LIC PlanLIC’s Jeevan Shanti Plan
Type of PlanPension Plan
Whom does the plan suit?Suitable for individuals looking to create a retirement corpus as well as lifetime income after retirement.
Entry Age60 years and above
Maximum Maturity AgeDepends on the annuity option selected
Policy TenureDepends on the annuity option selected
Sum AssuredNA
Death BenefitDepends on the plan option selected.
Maturity BenefitNil. Annuity payments are made from the vesting date till the annuitant’s lifetime.

LIC’s Jeevan Shanti plan not suiting your exact requirements for a pension plan?

Help us recommend ULIP plans based on your requirement & choose the best policy according to your needs. Simply click on this link & follow the instructions!

Top #9 Points to consider while identifying the best LIC plan:

So, these are some of the best plans offered by LIC which you can consider. You can select the plans depending on your insurance needs. Before selecting the plans, however, keep the following things in mind –

  1. Purpose

    Make sure that the plan fulfils your financial needs. If you want to fulfil the need for income replacement, a term insurance plan is a must. Similarly, if you want to plan for your retirement, choose a pension plan. So, the choice of the plan should match with your financial goals.

  2. Type of plan –

    The choice of the plan should be based on your risk appetite as well. If you don’t mind taking risks, ULIPs are a good choice. However, if you are risk-averse, choose traditional endowment and money-back plans for guaranteed returns.

  3. Sum Assured –

    The sum assured of the plan should be sufficient enough to cover the financial goal for which you are buying the policy.

  4. Policy term –

    The term of the policy should be selected depending on the need of funds. Match your investment horizon with that of the policy tenure and then select the term. For instance, if you would be needing funds after 15 years, choose a policy term of 15 years so that you get the policy benefit just when you need it.

  5. Tax benefits –

    Life insurance policies give you tax benefits. The premiums paid are allowed as a deduction under Section 80C up to INR 1.5 lakhs. Similarly, the death or maturity benefit received is also a tax-free income under Section 10 (10D). So, don’t forget to maximise the tax advantage offered by the plan that you buy.

  6. Rider benefits –

    If you want additional coverage benefits, look for optional riders offered by the plan which would help you increase the scope of coverage.

  7. Exclusions

    Almost all LIC plans have suicide exclusion wherein suicides within 12 months of policy inception or revival are not covered. In such cases, the premium paid is refunded or the surrender value is paid. So, check the exclusion of the plan before buying to know the exact coverage details.

  8. Annuity options in pension plans –

    LIC’s pension plans have multiple annuity options. If you are buying the pension plan, ensure that you choose the most suitable annuity pay-out option for earning the maximum benefits.

  9. Loyalty additions and bonuses –

    Traditional LIC plans offer you the benefit of extra additions like loyalty additions, guaranteed additions or reversionary bonuses. Look for these extra additions in the plan’s benefits structure to get a higher payout under the policy.

    So, plan your financial goals and then find the best LIC policy which best suits your financial goals. Invest in any of the above-mentioned policies and enjoy the benefits which the policy promises.

    To buy LIC’s policies you can choose Turtlemint. Turtlemint is an online platform which lets you buy the best LIC policy for your coverage requirements. The benefits of buying through Turtlemint are as follows –

    • You can simply provide your personal information and buy the policy with the click of a few buttons
    • Turtlemint also recommends you the ideal coverage level based on the income that you enter
    • You can compare similar plans on Turtlemint before you buy the actual policy. When you compare you can find the plan which has the best coverage benefits at the most reasonable premium rates.
    • Turtlemint not only helps you buy the most suitable LIC policy online, you can get help at the time of claims too. Turtlemint has a dedicated claims handling department which coordinates with the insurance company to ensure a quick claim settlement.

    So, choose the most relevant LIC policy based on your needs and buy the policy easily from Turtlemint.

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