Term Plan - Insurance Products - Principles of Insurance, B com B Com Notes | EduRev

Principles of Insurance

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LIC Term Insurance


LIC offers five variable options under its term insurance plans and they can be bought traditionally through the branches of LIC. For those who wish a quicker and tech-savvy approach, some plans can be purchased over LIC’s portal as well. These plans feature simple terms and conditions and can be easily availed through minimal or no paperwork. These plans also offer tax benefits on the payment of premiums and the final sum assured that is payable to the nominee. Loans can also be taken in lieu of these term plans and this gamut of offering from LIC is also known as Term Assurance Plans.

 

Types of LIC Term Plans:

There are five types of term plans offered by LIC and they are -

  • LIC e-Term

  • LIC Amulya Jeevan – II

  • LIC Anmol Jeevan – II

  • LIC Bhagya Lakshmi

  • LIC New Jeevan Mangal

Out of the above plans, Bhagya Lakshmi and New Jeevan Mangal are primarily micro insurance products that have a term insurance feature.

A traditional term plan from LIC Insurance, this plan is available through the branches of LIC and its basic features are as follows –


LIC Amulya Jeevan – II​

Features

Description

Entry Age

Minimum – 18 years

Maximum – 60 years

Maturity Age

Maximum of 70 years

Premium

Minimum – Based on the minimum sum assured value and the age of the insured

Maximum – No limit

Premium Payment Term

Regular Pay – Premium paid throughout policy term (5 years to 35 years)

Policy Term

Minimum – 5 years

Maximum – 35 years

Premium Payment Mode

Annual and semi-annual

Sum Assured

Minimum – INR 2500000

Maximum – No limit

Death Benefit

The entire Sum Assured value will be paid to the nominee

 

LIC Anmol Jeevan – II

 

Another traditional plan from LIC, Anmol Jeevan II has almost similar features as Amulya Jeevan II.

Features

Description

Entry Age

Minimum – 18 years

Maximum – 55 years

Maturity Age

Maximum of 65 years

Premium

Minimum – Depends on policy term and age of the insured subject to sum assured

Maximum – No limit

Premium Payment Term

Regular Pay – Premium paid throughout policy term

Policy Term

Minimum - 5 years

Maximum – 25 years

Premium Payment Mode

Annual or semi-annual

Sum Assured

Minimum – INR 600000

Maximum – INR 2400000

Death Benefit

The entire Sum Assured value will be paid to the nominee

 

 

LIC Bhagya Lakshmi

 

An offline plan in the micro-insurance segment, Bhagya Lakshmi can be really helpful for the rural population or the ones belonging to low income groups. Unlike conventional term insurance plans, this plan offers a maturity benefit too. The plan details are as follows –

Features

Description

Entry Age

Minimum – 18 years

Maximum – 55 years

Maturity Age

Maximum of 65 years

Premium

Minimum – depends on the age of insured, policy term and sum assured

Maximum – subject to a Sum Assured amount of INR 50000

Premium Payment Term

Limited Pay –

Minimum – 5 years

Maximum – 13 years

Sum Assured

Minimum – INR 20000

Maximum – INR 50000

Policy Term

Premium paying term plus 2 years

Premium Payment Mode

Annual, semi-annually, quarterly or monthly. Salary deductions are also

Maturity Benefit

Sum Assured on Maturity = 110% of all premiums paid

Death Benefit

Sum Assured on Death

 

LIC e-Term

 

LIC’s only online plan that is a pure term plan and considered only on individual basis. The basic features of this plan are as follows –

Features

Description

Entry Age

Minimum – 18 years

Maximum – 60 years

Maturity Age

Maximum of 75 years

Premium

Minimum – depends on factors decided by the insurer

Maximum – No limit subject to the Sum Assured amount chosen

Premium Payment Term

Limited Pay – Premium paid for 5 years

Single Pay – One time lump sum payment of premium

Sum Assured

Minimum –

  1. Aggregate Category – INR 25 lakhs

  2. Non-smoker Category – INR 50 lakhs

Maximum – No limit

Policy Term

Minimum - 10 years

Maximum – 35 years

Premium Payment Mode

Annual only

Death Benefit

Sum Assured on Death

 

 

LIC New Jeevan Mangal

A micro-insurance plan with an accidental death benefit rider that offers to return the premiums paid on maturity. The basic features and benefits of this plan are as follows –

Features

Description

Entry Age

Minimum – 18 years

Maximum – 55 years

Maturity Age

Maximum of 65 years

Premium

Minimum – depends on factors decided by the insurer

Maximum – No limit subject to the Sum Assured amount chosen

Premium Payment Term

Regular Pay – Premium paid throughout policy term

Single Pay – One time lump sum payment of premium

Sum Assured

Minimum – INR 10000

Maximum – INR 50000

Policy Term

Single Pay Premium – 5 years to 10 years

Regular Pay Premium – 10 years to 15 years

Premium Payment Mode

Single, annually, semi-annually, quarterly or monthly

Maturity Benefit

Sum Assured on Maturity

Death Benefit

Sum Assured on Death = 105% of all premiums paid for regular pay and 125% of premium for single pay policies

Accidental Death Benefit

Additional Sum Assured over and above the Base Sum Assured

 

Basic Features & Benefits of LIC Term Plans

  • The oldest and the most trustworthy insurer in India in the public sector

  • Flexible options in insurance pertaining to term, cover amount and premium payment

  • Customers can buy selected plans online in the comfort of their homes

  • Customers can avail of certain tax benefits under relevant sections of the IT Act, 1961

  • Some plans can be converted to other plans offered by LIC

 

How to claim LIC Term insurance?

To claim death benefits, you will need to fulfil certain formalities. They are:

  • Process: To claim the death benefits you will have to collect the document required and submit them at the LIC office. Once the documents are received and the claim verified, the policy being in effect and the claimant being the beneficiary, LIC will process the claim and release the sum assured.

  • Documents required:

    • You will need 3 key documents to make a claim for the death benefits of any policy.

    • The original policy document.

    •  The death certificate of the policyholder

    • The claim form, also known as Claim Form A or Form No.3783.

    • An NEFT mandate that will allow LIC to transfer the amount to your account.

 

Exclusions of LIC Term Plan:

Every insurance policy, including term insurance policies, has certain conditions under which claims will not be entertained. These conditions are known as exclusions. The main exclusion that applies to the policies issued by LIC relates to suicide committed by the policyholder. In such a case, if the policy is less than 12 months old then LIC will not pay anything to the beneficiary. If it is more than 12 months old then they will pay 80% of the premiums paid to the beneficiary and not entertain any claims for the sum assured.

 

Why choose LIC Term Insurance Plan?

There are many reasons why LIC is a good choice for term insurance policies. These reasons are:

  • It has the best claims settlement ratio of over 98%. This means that it successfully settle 98% of the claims that they get.

  • It has out-performed all its competitors from the private sector, especially in terms of claims settlement.

  • It has insurance plans that can be bought online. This means that easier to ensure that you are covered.

 

LIC Term Plans FAQs:

1. Q. What are the various types of LIC Term Plans?

A. The five types of term plans are LIC Amulya Jeevan – II, LIC Anmol Jeevan – II, LIC Bhagya Lakshmi, LIC e-Term and LIC New Jeevan Mangal.


2. Q. What are the various benefits available under the plans from LIC?

A. Each term plan from LIC has differing death benefits and add-on benefits as per the riders chosen, but the basic benefits allow a pay-out of sum assured in a lump sum amount.


3. Q. What is the minimum sum assured for LIC Term Plans?

A. The minimum sum assured under the various term plans from LIC is INR 10000 and that is available under the New Jeevan Mangal Plan.


4. Q. Can one be given rebates on premiums?

A. There are term plans from LIC that offer preferential rates on premiums for non-smokers and females.


5. Q. What is the maximum and minimum policy term available under these plans?

A. LIC term plans have a minimum policy term of 5 years and a maximum term of 35 years, subject to the entry age and the maturity age of the life insured.

 

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