Which one to buy and why?
The Life Insurance Corporation of India (LIC) is a leading life insurance provider which enjoys the immense trust of its customers. It is owned by the Government of India and it offers a range of life insurance plans for its customers. Another Government-owned entity offering life insurance policies is the Post Office. The Post Office offers a range of life insurance plans under the category Postal Life Insurance (PLI). With both LIC and PLI offering a range of life insurance policies, many of you might be confused in choosing the best insurer for your life insurance needs.
So, here is a comparative analysis of life insurance plans offered by PLI and LIC for your knowledge –
Life Insurance Plans offered by LIC:
LIC offers the following types of life insurance plans –
|Types of plans||Plan names|
|Term insurance||LIC’s Jeevan Amar
LIC’s Anmol Jeevan II
|Whole life insurance||LIC’s Jeevan Umang|
|Endowment insurance||LIC’s Jeevan Pragati
LIC’s Jeevan Labh
LIC’s Single Premium Endowment Plan
LIC’s New Endowment Plan
LIC’s New Jeevan Anand
LIC’s Jeevan Rakshak
LIC’s Limited Premium Endowment Plan
LIC’s Jeevan Lakshya
LIC’s Aadhar Shila
LIC’s Aadhar Stambh
|Money-back insurance||LIC’s Bima Shree
LIC’s Jeevan Shiromani
LIC’s New Money Back Plan – 20 years
LIC’s New Money Back Plan – 25 years
LIC’s New Bima Bachat
LIC’s New Children’s Money Back Plan
LIC’s Jeevan Tarun
|Unit Linked insurance||LIC’s New Endowment Plus|
|Pension plans||Pradhan Mantri Vaya Vandana Yojana
LIC’s New Jeevan Nidhi
List of Plans offered by the Postal Life Insurance:
PLI, on the other hand, offers the following types of plans –
|Types of plans||Plan names|
|Whole life insurance||Suraksha
Suvidha (convertible whole life plan)
|Child insurance||Bal Jeevan Bima|
|Joint life insurance||Yugal Suraksha|
Top #9 Differences between the plans offered by Postal Life Insurance and LIC of India:
Now that you know the plans offered by both, here is a comparative analysis between PLI and LIC and the plans that they offer –
1. Types of policies offered:
|PLI||PLI offers only traditional life insurance plans which promise guaranteed benefits. Market-linked plans are not available. Moreover, PLI does not offer term insurance or retirement-oriented plans which are also essential in an individual’s financial portfolio.|
|LIC||LIC offers all types of life insurance plans, both traditional and market-linked.|
2. Health insurance coverage:
|PLI||There is no plan offered by PLI which covers medical costs incurred by an individual in a medical emergency.|
|LIC||LIC offers two specialised health insurance policies – LIC’s Jeevan Arogya and LIC’s Cancer Cover. Both these plans cover major illnesses and provide the policyholder with financial assistance if the covered illnesses strike.|
3. Option to enhance the coverage:
|PLI||The coverage under the plans offered by PLI cannot be customised or enhanced for your wider coverage needs.|
|LIC||LIC offers a range of optional riders which help you in enhancing and customising the coverage of your life insurance policy. The riders offered by LIC include the following –
4. Available coverage limit:
|PLI||Plans offered by PLI limit the maximum available sum assured to INR 50 lakhs|
|LIC||Under many LIC plans, there is no limit to the maximum sum assured. You can choose any level of sum assured that you want as per your coverage requirements.|
5. Eligibility to buy the plan:
|PLI||PLI policies are available only to individuals employed in Government organisations, defence, local bodies, educational institutions, financial institutions, listed companies, professionals, etc.|
|LIC||LIC policies are open to all. Any Indian citizen and even NRIs can buy life insurance plans from LIC.|
6. Buying the policy:
|PLI||PLI policies can be bought only from the post office.|
|LIC||LIC policies can be bought by agents, by visiting the company and also online. In fact, buying online is the easiest way to invest in a LIC policy.|
|PLI||Premiums of PLI plans are very low and affordable.|
|LIC||In terms of premiums, LIC has a higher rate of a premium compared to PLI.|
|PLI||Many PLI plans offer a bonus which is quite high.|
|LIC||Many LIC plans also offer bonus. However, the bonus rate is low compared to PLI plans.|
9. Maximum age:
|PLI||PLI policies cover individuals only up to 55 years.|
|LIC||LIC plans have a higher coverage age limit. Coverage is allowed even up to 75 years.|
Which is better – LIC or PIL?
The question of which option is better entirely rests on your requirements. If you are looking to invest in a traditional endowment plan, PLI is a better alternative as it offers the plan at a very low premium rate. Moreover, endowment plans offered by PLI earn higher bonus rates compared to the plans offered by LIC. So, for traditional endowment plans, PLI is a good choice if you are satisfied with the coverage of up to INR 50 lakhs.
If, on the other hand, you are looking to invest in ULIPs or term insurance plans, LIC is the only solution as these plans are not offered by PLI. Given the fact that a term insurance policy is a must, you should choose LIC for buying a suitable term insurance plan. Moreover, if you want to plan for your retirement or need a health insurance plan, you have to choose LIC since PLI does not offer these plans. Lastly, LIC scores over PLI in terms of its coverage level. If a higher coverage level is on your mind you should go with LIC as PLI limits the coverage available under its plans.
So, assess your insurance needs and make a choice. Both options allow you different types of life insurance plans and the choice of the better option depends entirely on what you require.
1. Can a loan be taken in a PLI policy?
Yes, PLI plans allow the facility of loans. Loans are available if the policy has run for a minimum period of 3 years and has acquired a minimum surrender value of INR 1000.
2. Are there tax benefits in LIC and PIL policies?
Yes, both LIC and PLI policies allow tax benefits. The premiums paid are allowed as a deduction under Section 80C up to INR 1.5 lakhs. The benefits received from the policy are also tax-free in your hands under Section 10 (10D).
3. Can I buy insurance policies from both LIC and PLI?
Yes, you can buy multiple insurance policies from both LIC and PLI.
4. How to buy LIC policy online?
You can buy LIC policies online through Turtlemint. Turtlemint is an online aggregator which lets you compare life insurance policies of multiple companies and select the best plan. You can visit Turtlemint at www.turtlemint.com and select the type of policy that you want to buy. You can then compare the available plans and buy the best policy for your requirements.