LIC is going to launch its Online Term Insurance Plan “LIC Tech-Term (No. 854)” on 12th July 2019. This new plan is a non-linked and non-participating term insurance plan. LIC already have few term insurance plans in its portfolio namely LIC e-Term – Pure Online term plan, LIC Amulya Jeevan – II, LIC New Jeevan Mangal, LIC Anmol Jeevan – II and LIC Bhagya Lakshmi. The new term plans comes with new features aim to compete with the private insurance players.
Term Insurance means where the family (nominee) would get the sum assured on the death of the insured person. There are no survival benefits of the policy. Term plans comes with low premium compared to other insurance plans such as ULIPS, Endowment plans etc.
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LIC Tech Term Plan No 854
- LIC Tech Term Plan No 854 is a Pure Online Term Insurance Plan.
- It’s a non-linked and non-participating plan.
- Special Discounts for Women.
- Lower Premium for non-smokers.
- The maximum life coverage is extended to 80 years.
- Optional accidental death benefit rider is also added.
- Regular, Limited period or single premium payment option.
- A unique feature of increasing Sum Assured amount i.e. for the first 5 years SA will remain same then for 10 years the SA will increase 10% yearly and then from 16th year the SA will remain same throughout the policy period.
- Death Benefits can also be claimed in installments of 5 years, 10 years or 15 years.
- Minimum Sum Assured is ₹ 50 lakhs and there is no ceiling limit for the Maximum Sum assured.
- The premium payment mode is Online only.
- Minimum Entry Age: 18 years
- Maximum Entry Age: 65 years
- Minimum Sum Assured: ₹ 50 lakhs
- Maximum Sum Assured: No limit
- Minimum Policy Term: 10 years
- Maximum Policy Term: 40 years
- Premium Payment Options: Single, Regular, Limited
- Minimum Installment of Premium: ₹ 3,000 for Regular and Limited Premium and ₹ 30,000 for Single Premium
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For instance, sum assured ₹ 1 crore, Policy Term and Premium Paying Term is 10 years and the premium paying frequency is yearly under the sum level assured option. The premium works out as follows:
|20 years||Male||₹ 5,456||Yearly|
|20 years||Female||₹ 5,192||Yearly|
|30 years||Male||₹ 6,248||Yearly|
|30 years||Female||₹ 5,896||Yearly|
|40 years||Male||₹ 10,260||Yearly|
|40 years||Female||₹ 8,460||Yearly|
Premium Paying Terms
- Regular: Yearly
- Limited: 5 years or 10 years
- Single: One Time
- Mode: Online only
Sum Level Assured
Under this option, the nominee will receive the sum assured fixed at the time of buying the policy. The sum assured remains same throughout the policy period.
Increasing Sum Assured
Under this option, the sum assured increase with the time as follows
- If death occurs within first 5 years of Policy period, the Sum Assured shall be the amount opted while buying the policy.
- If death occurs from 6th policy year to 15th policy year, the sum assured shall be increased by 10% each year.
- If death occurs after 15th year, the sum assured shall be the increased amount upto 15th Policy year.
The sum assured shall be received as a lump sum or installments of 5 years, 10 years or 15 years as chosen by you at the time of buying the policy.
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Since LIC Tech Term Plan No 854 is pure term plan there are no maturity and survival benefits.
Review of LIC Tech Term Plan No 854
There are two big major positives with LIC Tech Term Plan No 854 i.e. the life coverage up to 80 years and the increment in the sum assured amount. Both these features act as an icing on the cake. Further, in previous term-plans of LIC there was no accidental death rider benefit but this policy includes this benefit also. Given the trust and the brand value of the LIC, the policy seems pretty goods in comparison to other life insurance policies due to competitive premium rates for males and discounted premium rates for females. LIC also has the second highest Claim Settlement Ratio of 98% as per IRDA. The only negative I see in this plan is no Income Option available as offered by many private insurance companies. But, it is always advisable to make a comparison of the Premium rates for Basic Term Life cover offered by other Life Insurers. But, do remember that the cheapest Term plan does not necessarily means the best.