For our parents and grandparents, LIC has been synonymous with insurance. Most people relate LIC with endowment or ULIP policies like Jeevan Anand, Jeevan Adhaar etc which are not popular with today’s millennial. However, not many know that now you can also buy Term Insurance with LIC at very competitive rates. So in this article, I will tell you everything you need to know about one of the best LIC Term Insurance Plan – LIC Tech-Term Plan 854 – its features, eligibility criteria, where to buy etc.
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Term Insurance With LIC
As per their website, LIC offers Term Insurance in 3 plans
- LIC Tech-Term Plan 854
- LIC Saral Jeevan Bima Plan 859 (with Sum Assured between 5L and 25L)
- LIC Jeevan Amar Plan 855
But of these, only Tech-Term Plan 854 appears to be a pure Term Insurance plan with competitive rates. For other plans, the premium amount is very high.
For example, following are the premium to be paid on 3 LIC term insurance plans for a 36 year old non smoker male:
|Policy||Sum Assured||Annual Premium (25 yrs)|
|Tech-Term Plan 854||2 Cr||26,880/-|
|Jeevan Amar Plan 855||2 Cr||44,533/-|
|Saral Jeevan Bima Plan 859||25L (max allowed)||18,703/-|
As you can see, Tech-Term Plan 854 is lowest priced. Hence, in remaining of this article, I will discuss only LIC Tech-Term Plan 854
What is LIC Tech-Term Plan 854
LIC Tech Term Plan 854 policy is a non-linked, non participating online pure risk premium term insurance plan. In simple language, this means that the performance is not related to market (non-linked), you will not get any dividends/bonus (non-participating) and you can buy it only via online mode and not by any agents. Infact, policy aggregators like Policy Bazaar or Coverfox also do not sell LIC term insurance. Due to this reason, LIC has been able to save on agent commissions and offer a competitive priced term insurance in market.
Key Features of LIC Tech-Term plan 854
Following are the key features of this term insurance plan of LIC
|Entry Age||o Minimum 18 years|
o Maximum 65 years
|Maximum Maturity Age||o 80 years|
|Sum Assured||o Minimum 50L|
o Maximum No Limit
|Policy Term||o Minimum 10 years|
o Maximum 40 years
|Policy Options Available||o Limited Sum Assured|
o Increasing Sum Assured
|Premium Payment Options||o Single Premium (you pay premium only one time)|
o Regular Premium (pay premium every year till policy is valid)
o Limited Premium Payment (pay premium for few years and enjoy benefits till policy is valid)
|Add-on Riders||o Accident Benefit Rider|
As shown in above table, anyone between 18 to 65 years of age can buy this LIC term insurance plan for 10 to 40 years duration. Just remember that maximum age at maturity is 80 years and minimum sum assured to purchase policy is 50 Lakh rupees.
L I C Term Insurance offers two variants under Tech Term Plan 854 – Limited Sum Assured and Increasing Sum Assured. In Limited Sum Assured, the policy sum assured will remain same for entire duration of the policy. Under Increasing Sum Assured policy, the sum assured will remain same until 5th year and then increase by 10% for next 10 years. So a policy of 1 Cr will become 1.1 Cr in 6th year, 1.2 Cr in 7th year and so on till it becomes 2 Cr in 15th year. Thereafter, it will be 2 Cr for rest of the policy period.
Premium Payment Options
Like all other term insurance policies from other brands, LIC Tech-Term Plan 854 offers discounts to non smokers & females and also offers multiple options to pay premium. You can pay all the premium at one go (Single premium), or pay every year (regular premium) or pay for few years (limited premium payment)
In addition, there is Accidental Death Benefit rider which is offered as optional add-on to this policy. You can decide whether to buy it or not. If you buy it, you will get certain amount extra in addition to your original sum assured only if death happens by Accident. If death is due to natural cause or disease related, you will get only the sum assured of the policy.
How to Purchase
As mentioned earlier, this term insurance with LIC is offered only via online mode. Hence, you will have to login to LIC website – www.licindia.in to buy the policy. However, the main page of LIC is little complex and it will be hard for many users to search this policy.
Hence, you can click this link to directly reach the LIC page from where you can buy the policy.
Pros and Cons
Now that you know the features of LIC Tech-Term Plan-854, let us understand the Pros and Cons of buying this policy
|Brand name and Trust||No helpline to speak with an agent|
|High Claim Settlement Ratio||Processing time for underwriting and issuing the policy is little high|
|High Amount Settlement Ratio|
|Vanilla Term Insurance without too many complex add-on riders / payback options|
For me, the biggest positives of this term insurance plan with LIC are competitive pricing and simplicity.
Below table shows how this plan compares in pricing when compared to other plans available in market
|Policy (36 yr non smoker male)||Sum Assured||Annual Premium (25 yrs)|
|LIC Tech-Term Plan 854||2 Cr||26,880/-|
|ICICI iProtect Smart||2 Cr||23,613/-|
|HDFC Life||2 Cr||27,747/-|
|Tata AIA||2 Cr||26,668/-|
As you can see, LIC Tech-Term Plan 854 is priced on par with other players making it a lucrative buy.
What is my recommendation
Ideally, Term Insurance plans should be simple – you get money if you die within policy period, do not get money if you survive. But today, buying a term insurance has become very complex with too many riders, money back conditions being added to it. I like the way LIC has kept this plan simple without getting into all such complex riders. This will make it convenient for users to buy the policy. And with very competitive pricing, LIC definitely has a winner here. Hence, I will recommend that one should buy this LIC Tech Term Plan 854 without hesitation.
Hope you liked this article and found it useful. Please feel free to share your feedback and comments.
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