LIC Term Plans

LIC Term Plans

What is a Term Plan?

Term insurance plan is a life insurance policy which provides coverage to the family of the policyholder in the case of the policyholder’s unfortunate death. The policy offers insurance coverage only during the term of a policy which is specified at the start of the policy. If the policyholder dies during the policy term, then the insurer becomes liable to pay the death benefit to his family or nominees. However, the insurer will not be liable to pay the coverage in case the policy term has been completed or if the policy became inactive before his death. 

What is LIC?

LIC or Life Insurance Corporation is the largest insurance provider in India. The government-owned company was established on 1st September 1956. It offers various life insurance, pension & investment plans to the citizens in India. The company has a wide network of 2048 branches, 8 zonal offices, 1381 satellite offices, and a corporate office through which it offers its services across the country. LIC has been a reputed & most trusted entity in the life insurance space for a very long time. The firm provides a wide variety of plans for life insurance along with additional riders offering financial protection to individuals in India.

Tax Benefits

LIC Term plans offer tax deductions for premium payments of up to Rs.1.5 lacs under Section 80C of the Income Tax Act,1961. For the policies issued after 1 April 2020, the premium amount should not exceed 10% of the total sum assured for claiming tax deductions. Tax deductions will not be applicable to the premium amount exceeding 10% of the sum assured.

Also, the claims or maturity proceeds from the policy are tax-exempt under Section 10 (10D) of Income Tax Act,1961.

Types of Term Plans from LIC 

The pure term insurance plans offered by LIC are mentioned below-

1. LIC’s Tech Term Plan (Plan No.854, UIN: 512N333V01)

LIC Tech Term is a non-participant & non-linked pure term insurance policy that can be purchased only in online mode. The plan offers financial protection to the family of the policyholder in case of his sudden demise during the policy tenure. The plan can be purchased anytime as per the convenience of policy buyers as the whole application process is online and doesn’t require any physical presence or the support of intermediaries.

Features of LIC Tech Term Plan

  • The Tech-Term plan offers the flexibility to choose from two death benefit options - Increasing Sum Assured and Level Sum Assured Option.
  • The plan also provides the flexibility to choose the policy term & premium payment terms (wherein choice can be made between single premium, regular premium, and limited premium) as per the requirements of the policyholder. Also, the individual can opt for the death benefit either to be paid in installments or as a lump sum. 
  • Offers special premium rates for women policy buyers.
  • Provides attractive rebates on the sum assured on advance premium payments. As the whole application process is online, the premium rates have been kept lower incorporating the rebate for low servicing costs owing to no intermediary involvement. 
  • Premium Rates have been kept different for smokers & non-smoker policy buyers.
  • The policyholders have been given the option to enhance the coverage of the policy through a purchase of LIC’s Accident Benefit Rider wherein additional premiums would need to be paid for getting the rider’s benefit.
ParametersLIC Tech Term Plan
Age Limit

Minimum age - 18 years 

Maximum age - 65 years

Maturity Age80 years
Policy Term

Minimum-10 years 

Maximum-40 years

Minimum Basic Sum AssuredRs 50,00,000
Maximum Basic Sum Assured
  • No upper limit
  • Sum assured shall be in multiples of Rs.5 lakh if the sum assured is b/w Rs.50 lakhs to Rs.75 lakhs.
  • Sum assured shall be in multiples of Rs.25 lakh if the sum assured is above Rs.75 lakhs. 
Mode of premium installmentsMonthly, quarterly, half-yearly, or yearly.
Premium Payment Term

Regular Premium - Same as of policy term

Limited Premium - 

  • For policy term of 10-40 years = Policy Term - 5 years
  • For policy term of 15-40 years= Policy Term -10 years

Single Premium - NA

Sample Premium Illustration

Below is the premium illustration for a non-smoker, male looking for a sum assured of Rs.1 Crore in the Level Sum Assured option. The premium rates have been highlighted for different premium payment options:

Age Term of PolicyRegular Annual Premium optionAnnual premium for limited premium paying option with: Policy Term- 5 Yrs

Annual premium for limited premium paying option with: 

Policy Term-10Yrs

Single Premium
2020Rs.5,368Rs.6,160Rs.8,008Rs.64,592
3020Rs.7,216Rs.8,360Rs.10,912Rs.87,120
4020Rs.13,770Rs.16,110Rs.21,060Rs.1,66,230

The premiums mentioned above are exclusive of GST.

2. LIC’s Jeevan Amar ( Plan No.855, UIN: 512N332V01)

LIC Jeevan Amar is a non-participating and non-linked pure term insurance plan which can be purchased only in offline mode. The plan offers financial protection to the family of the insured in case of the sudden demise of the policyholder during the policy term.

The scheme provides the flexibility to choose between two options for death benefit at the time of purchasing the policy which are:

  • Level Sum Assured
  • Increasing Sum Assured 

  Features of LIC Jeevan Amar Plan

  • The policyholder has the flexibility to choose from Level Sum Assured & Increasing Sum Assured options for death benefits.
  • The plan offers special rates for the women policyholders.
  • The plan also offers flexibility to choose 
  • Among regular premium, limited premium & single premium options for premium payments.
  • The term of policy
  • Among the options to receive the death benefit as a lump sum or in installments. 
  • Provides attractive rebates on the sum assured on advance premium payments.
  • Different premium rates for smoker & non-smoker policy buyers.
  • The plan provides an option to increase policy coverage through a  purchase of the LIC’s accident benefit rider where an additional premium will need to be paid by the policyholder.
ParametersLIC Jeevan Amar
Age Limit

Minimum-18 years

Maximum-65 years

Maturity Age80 years
Policy Term

Minimum-10 years

Maximum-40 years

Minimum Basic Sum AssuredMinimum-Rs. 25,00,000
Maximum Basic Sum Assured
  • No upper limit
  • Sum assured shall be in multiples of Rs.1 lakh if sum assured is b/w Rs.25 lakhs to Rs.40 lakhs. 
  • Sum assured shall be in multiples of Rs.10 lakh if sum assured is above Rs.40 lakhs. 
Mode of premium installmentsMonthly, quarterly, half yearly, or yearly.
Payment Term

Regular Premium - Same as of policy term

Limited Premium - 

  • For policy term of 10-40 years = Policy Term - 5 years
  • For policy term of 15-40 years= Policy Term -10 years

Single Premium - NA

Sample Premium Illustration

Below is the premium illustration for a non-smoker, male looking for a sum assured of Rs.50 lakhs in the Level Sum Assured option. The premium rates have been highlighted for different premium payment options:

Age Term of PolicyRegular Annual Premium optionAnnual premium for limited premium paying option with: Policy Term- 5 Yrs

Annual premium for limited premium paying option with: 

Policy Term-10 Yrs

Single Premium
2020Rs.4,356Rs.5,104Rs.6,556Rs.48,928
3020Rs.5,940Rs.6,952Rs.8,932Rs.66,088
4020Rs.11,475Rs.13,545Rs.17,595Rs.1,27,395

The premiums mentioned above are exclusive of GST.

What are Riders?

Riders are additional provisions in insurance policies that provide an add-on to the existing policy of the policyholder. These riders enhance the basic coverage of the policy or offer additional benefits to the policy buyers depending upon the chosen rider. The policy buyers would need to make additional premium payments along with the premium payments for getting the basic coverage to avail the benefits from the selected rider. 

Riders are available for all kinds of insurance. Talking about the riders in Tech-Term & Jeevan Amar plans, LIC offers the Accident Benefit Rider which has been discussed below:

LIC Accident Benefit Rider

Under LIC's Accident Benefit Rider, if the policyholder dies of an accident during the policy & rider term,  the additional rider sum assured shall be paid as a lump sum along with the death benefit in the base plan. Additional premiums need to be paid along with the premium for the base policy to avail the benefit of the rider.

The rider can be purchased anytime i.e while buying the base plan or during the policy term. However, if buying during the policy term, the premium payment term should be outstanding for at least 5 years. The benefit cover under this rider will be available till the insured attains the age of 70 years. 

How to claim insurance in a LIC term plan?

You need to follow a specific procedure to claim death benefits, which requires proper documentation and valid proofs. The process, although a very lengthy task, is in place to verify the genuineness of the claim. 

The nominees would need to submit the following documents in the LIC’s branch office after informing about the death of life assured:

  • Claim Form A- This is a statement form by the claimant giving details about the deceased and the claimant’s information.
  • A death certificate that clearly specifies the cause of death.
  • Proof of Age
  • Evidence of the deceased’s estate plan in case the policy is not nominated or assigned.
  • Original document of policy 

Additional Forms

Some of these additional forms could be required if the death of life assured happens within 3 years from the start of policy:

  • Claim Form B : Medical attendant certificate filled by the attendant of the deceased during his last illness.
  • Claim Form B1 : If the deceased received medical treatment in a hospital.
  • Claim Form B2 : Form to be filled by the attendant of the deceased prior to his last illness.
  • Claim Form C : Identity certificate and certificate of cremation/burial to be filled & signed by a responsible person
  • Claim Form E : In case the deceased was an employed person, a certificate from employer is required.
  • In the case of death from accident or any unnatural cause,certified copies of FIR, post mortem report & police investigation report is required.

Submit the documents at the LIC office for verification. The claim is further processed after verifying the genuineness of the claim, and the assured sum is credited to the nominee's account.

FAQs

1. Is a single mandate possible to be used for all multiple policies?

No, a separate mandate for each policy has to be used.

2. What is the process by which the firm settles the claim for LIC term insurance plans?

The nominee can contact the branch directly for the claim resolution for any LIC term plan, and the customer service desk can assist & guide you on the claim process.

3. For LIC term insurance policies, what is the policy cancellation process?

You may personally visit the branch in order to revoke or cancel the policy.

4. What are the tax benefits on the premium payments made for LIC term policy?  

Premium payments made for LIC term policies are eligible for claiming tax deductions under Section 80C of the IT Act,1961. The claims are also tax exempt under Section 10 (10D) of IT Act.

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