LIC Tech Term Plan : New Online Term Life Insurance Plan | Details & Review

As per the latest news, LIC is proposing to launch its new Online Term Life Insurance plan called as ‘LIC Tech Term Plan’ (Plan no 854).

LIC already has been offering different types of Term insurance plans in its term plan product catalogue;

• LIC e-Term.
• Amulya Jeevan – II.
• LIC Anmol Jeevan – II.
• Bhagya Lakshmi.
• LIC New Jeevan Mangal.

LIC’s e-Term is its popular online term insurance plan offering and looks like they are now coming up with an improved version of online Term plan, loaded with more features and rider(s).

Before discussing about the features of LIC’s Tech Term Insurance plan, let’s understand the different types of Traditional Life Insurance plans.

• What is Term Life Insurance Plan? – Term insurance is the simplest and most fundamental insurance product. These insurance plans are designed to ensure that in the event of the policyholder’s death, the family gets the sum assured (the cover amount). Term plan provides risk coverage for a certain period of time (policy term/duration). If the insured dies during the time period specified in the policy and the policy is active – or in force – then a death benefit will be paid. It is the cheapest form of Life insurance in terms of premium. LIC’s Tech-Term insurance plan falls under this category.
• What is an Endowment plan?  – It  is a combination of insurance and investment. The insured will get a lump sum along with bonuses (if any) on policy maturity (or) on death event. 
• What is an ‘Whole-Life Insurance Plan’? –  It is a life insurance policy which is guaranteed to remain in force for the insured’s entire lifetime. The Sum assured is paid to the Policyholder’s nominee in the event the insured dies.
• What are Money-back policies? – They provides life coverage during the term of the policy and the maturity benefits are paid in installments by way of Survival Benefits (money-back payments).
• What are Limited Premium Payment Insurance Plans? – A limited premium payment plan is a plan where you pay the premium for a shorter span of time and enjoy the benefits of an insurance cover for a long time.
• What is a Single Premium Plan? – It is the insurance policy where you pay insurance only in the first year but continue to enjoy the life cover and other plan related benefits throughout the term of the policy.

Let’s us now discuss – What are the features of LIC Tech-Term Insurance plan? Is it going to be LIC’s Best online Term Insurance plan? Will it be the cheapest online Term insurance plan?….

Features of LIC Tech Term Plan

Below are the key features of LIC’s Tech-Term Insurance plan ;

• Minimum Age at entry : 18 years
• Maximum age at entry : 65 years
• Coverage available till : 80 years
• Minimum basic sum assured (BSA) : Rs 50 lakhs
• Maximum basic sum assured (BSA) : No Limit
• Policy term : 10 to 40 years
• Premium Payment Term : Single, Regular or Limited
• Limited Premium Payment Term : 5 years or 10 years
• Minimum Premium Installment : Rs 3,000 for Regular/Limited options and Rs 30,000 for Single premium payment option.
• It will be available through ONLINE mode only.
• Sum Assured options : i) Level Sum Assured & ii) Increasing Sum Assured. You can choose this installment option either at the time of buying or during the policy period. Accordingly, your nominee will receive the death benefit (if any).
• Increasing Sum Assured Option : The death benefit under this option will remain same for up to the first 5 policy years. After that, it increases at a rate of 10% for the next 10 years. From the 16th year, it remains the same.
• Death Benefit Payment : The death benefit can be taken as lump sum or in installments payable in 5 years, 10 years or 15 years.
• Special Discount on Premium : Discounted premium rate is available on the proposals made by women applicants.
• Optional Rider : Accidental Death Benefit rider is available.

You can notice that LIC is offering certain value added features which are currently not available in its existing online term insurance plan, e-Term plan.

LIC’s New Online Term Life Insurance Plan – LIC Tech Term – Illustration

The expected premium quotations for a Sum Assured of Rs.1 Cr, with tenure & premium paying term (yearly mode) of 10 years are;

• Age-20 Years-Male-Rs.5,456 | Age-20 Years-Female-Rs.5,192
• Age-30 Years-Male-Rs.6,248 | Age-30 Years-Female-Rs.5,896
• Age-40 Years-Male-Rs.10,260 | Age-40 Years-Female-Rs.8,460

Let’s consider an example – A 40 year old male individual buys LIC’s Tech Term insurance plan for Rs 1 cr level Sum Assured, with 10 year term, premium payable @ Rs 10,260 p.a., opts for regular premium payment for 10 years and selects ‘lump sum’ death benefit option.

In case, the policy holder expires anytime during the policy tenure (10 years), his/her nominee will receive the death benefit of Rs 1cr as a lump sum amount and the policy gets closed.

In case, the policy holder survives the term then the insurance cover ceases and nothing is payable to him/her.

Can NRIs buy LIC Tech Term Insurance Plan?

The LIC Tech Term insurance plan can be bought by resident Indians and is not available to Overseas Citizen of India (OCI) or Person of Indian Origin(PIO). NRI’s, however, can apply for the new LIC term plan while their stay in India subject to the condition that the applicant is residing in any one of the permissible countries only.

My opinion on LIC Tech-Term Online Term Insurance plan – Is LIC Tech Term Plan the best LIC Term Plan?

Kindly go through the below points before you make a decision to buy a Term insurance plan;

• Looks like LIC’s Tech term plan has been very competitively priced. This plan may give tough competition to private insurance companies. But, do make a comparison of the Premium rates for Basic Term Life cover offered by other Life Insurers. But, the cheapest Term plan, does not necessarily mean its the best.
• Kindly go through the Claim Settlement Data. Though this is no more a primary selection criteria, it is good to go through the claims data provided by the IRDA.
• Though Claim Settlement record is one of the important factors while choosing your life insurance plan, it is advisable to go for only Term Insurance. You can opt for a Term plan based on the claim settlement record. The other deciding factors can be cost of premium, features, optional riders, quality of service and your comfort level with the Brand. (You may like reading : Best Term Insurance Plans).

• Do note that as per the recent amendment to Section 45 of the Insurance Act, If your policy is 3 yrs old, no matter what happens, the life insurance company will not be able to deny the claims. So, your life insurance company has only 3 years in hand to reject the policy based on any mis-representation or mis-statement. Once 3 policy years are completed then the life insurance company has to settle the claims and can not reject them.
• So, you can buy a Life Insurance plan from any Insurer of your choice. But, do not hide any facts while filling the proposal form. This will ensure that your claim (in any unfortunate event happens) is settled.
• You can use the below online Term insurance calculator to know how much life cover you require. You may also download this calculator from here..

• Given the trust and brand value of LIC, you can consider buying LIC Tech Term plan. You may be better off buying a basic life cover with regular premium, lump sum payment option and without any riders. You may buy a stand-alone Personal Accident Insurance plan and/or Health insurance plan for self/family.

(Please note that this article is based on the limited available information and will be edited/updated, if required)

Continue reading :

• How much Term Life Insurance Cover do I need? | Online Insurance coverage Calculator
• LIC New Plans List 2018-2019 | Snapshot & Review of all LIC New Plans
• Why (NOT) to invest in LIC Jeevan Shanti plan?
• Traditional Life Insurance Plan – A terrible Investment option?
• Top 22 Popular Investment options in India – Features & Snapshot

(Post first published on : 10-July-2019)