Articles 198 views September 10, 2020

LIC vs Private Insurance Companies

We live in a world that is full of uncertainty and to deal with this, people opt for Life Insurance Plans. An insurance plan ensures the safety of an individual’s family and dependents in case anything unfortunate happens with him or her. One of the types of Life Insurance Plans is the Term Insurance that provides coverage to an individual for a specific period. Simply put, the nominee will get a fixed sum of money to protect the finances in case the policyholder dies during the policy term. Both Government (LIC) and Private companies (ICICI Prudential, HDFC Life, etc.) provide term insurance plans to customers. That’s why people often get confused about the term insurance plan they should take.

Term Insurance

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One golden rule is to keep in mind that the best term plan should be the one with a maximum cover at the least premium. Plus, how much riders the policy has, like personal accident cover, critical illness benefits, etc. While looking for a suitable term plan, it is important to look at factors such as Claim Settlement Ratio, Solvency Ratio, Rider Benefits, etc, and then make a decision.

We will cover all the important features of LIC and some Private Term Insurance Plans so that you can decide by yourself about the suitable one. Let’s get to it without any further delay.

LIC Term Insurance Plan

When we talk about insurance providers in India, one of the most popular and common is Life Corporation of India (LIC) that provides a range of insurance schemes to customers. One of them is LIC Jeevan Amar that is a non-linked, non-participating Life Term Insurance Plan. This scheme provides financial protection to the policyholder’s family in case of his or her unfortunate death during the term of the policy. So, what are its key features that make it so popular among customers? Well, we are showing some of them below. Please have a look.

  1. Customers can choose from two options according to their convenience — Level Sum Assured and Increasing Sum Assured.
  2. The premium rates are divided into two categories. These are Smoker Rates and Non-smoker rates. So, if you are a non-smoker, the premium rates can be lower as compared to smokers.
  3. Sum assured will be paid in case something unfortunate happens with the policyholder.
  4. Customers have the flexibility to choose Single-Premium,  Regular Premium, and Limited Premium Payment according to their convenience. They can also choose the policy term and premium paying terms.
  5. The best thing about LIC Term Insurance Plan is people can enhance their coverage by choosing the Accident Benefit Rider. But for this, they will need to pay an additional premium.
  6. This term insurance plan will have no surrender value. Also, customers cannot opt for a Loan against this term insurance plan.
  7. The minimum Basic Sum Assured is INR 25,00,000 while there is no limit on the Maximum Basic Sum Assured on this insurance plan.
  8. The policy term ranges from 10 to 40 years. While the premium paying term will be the same as the policy term in case of the regular premium.
  9. If a customer survives until the end of the fixed policy term, policyholder or family members won’t get any amount.
  10. Customers can also get Tax Benefits under Section 80C of the IT Act on paying the premium upto INR 1,50,000 every year.
  11. The minimum age for entry is fixed at 18 years while the maximum age can be 65 years (last birthday) to get the LIC Term Insurance Plans.

This must have given you enough knowledge about the LIC Term Insurance Plan. Now, it’s time to know about some of the Term Insurance Plans by Private Companies such as ICICI Prudential, HDFC Life, etc. So, keep reading.

ICICI Prudential Term Life Insurance

This Term Life Insurance plan from the ICICI Prudential provides security to the policyholder’s family in your absence due to unforeseen events. But what is the most special thing about this plan? Well, individuals can get a payout in the case of 34 Major illnesses like Heart Attack, Cancer, Kidney Failure, etc. We are showing some of its prominent features. Please have a look.

  1. Customers can get enhanced protection such as Coverage Against Death, Terminal Illness, and Disability with a wide range of Benefit Options that you can choose from. These options are Life, Life Plus, Life & Health, and All-in-One. The benefits in each option vary from one to another.
  2. People who don’t consume Tobacco in any form can get special premium rates.
  3. ICICI Prudential Term Life Insurance plan also offers the flexibility to opt for Need-based benefit payout as a lump sum or monthly payouts for 10 years or a mixture of both of them (lump sum and income).
  4. The premium can be paid via various methods such as Lump Sum, For a limited period, or throughout the term of your policy (Yearly, Half-yearly, and Monthly). Also, the premium will vary depending on the policyholder’s age and the chosen plan.
  5. Women customers can get Special Premium Rates for Life Cover and Accelerated Critical Illness Benefit.
  6. The minimum premium of this term insurance plan is fixed at INR 2,400. This amount does not include GST.
  7. The minimum and maximum age of entry are fixed at 18 and 65 years respectively for this term insurance plan from ICICI Prudential.
  8. The minimum benefit under Accidental Death Benefit and Accelerated Critical Illness is fixed at INR 1,00,000.

HDFC Life Term Insurance Plan: HDFC Click 2 Protect Plus

This term insurance plan of HDFC Life is quite popular among the customers because of the large amount of life cover it provides at an affordable premium. With this policy, people get an extensive range of cover options and they can choose the cover depending on their financial needs. We are showing some of the highlights of this plan. Do check.

  1. As we said, customers can choose the cover from various options. These options are Life Option, Extra Life Option, Income Option, and Income Plus option. All these options have different benefits for customers.
  2. Apart from the cover options, customers can also increase their insurance cover on achieving certain key milestones of life with the help of Life Stage Protection Features available under the Life Option.
  3. Customers can get insurance cover upto the age of 85.
  4. The minimum policy term is fixed at 5 years for Life Option and Extra Life Option while 10 years for all other cover options.
  5. You can choose the premium paying options from Regular, Limited Pay (Pay premiums for 5, 10, 12 years or your chosen policy term less than 5 years), or Single Premium Payment.
  6. Remember that the overall sum assured will depend on the age, gender, and Plan option. However, the minimum amount is INR 25,00,000 while there is no limit on the maximum sum assured.
  7. HDFC Life Term Insurance Plan also offers two Rider options with which you can enhance your protection. These options are HDFC Life Income Benefit on Accidental Disability Rider and HDFC Life Critical Illness Plus Rider.

Max Life Term Insurance Plan

The sudden demise of the sole breadwinner in a family can ruin the financial stability of all the people dependent on him or her. But with the help of Max Life Term Insurance Plan, an individual can maintain his or her family’s finances without any trouble. This is a pure life insurance product that provides financial protection in case of death of the policyholder during the policy term. And not only death, but it also protects individuals from critical illnesses. We are showing some of the important features of the Max Life Term Insurance Plan. Please check.

  1. The best thing about the Max Life Term Insurance Plan is the wide range of options that customers can opt for. These options are – Basic Term Plan, Term Plan with Monthly Income, Term Plan with Growing Monthly Income, Term plan with Return of Premium (TROP) and Group Term Life Insurance Plan. Each plan has different benefits for customers.
  2. Max Life Term Insurance provides an option to the family to choose from A Lump Sum or A Regular Monthly Income in case of policyholder’s demise.
  3. By paying the premium on your term insurance plan, you can save tax under section 80C and 80D for Critical Illness and Life Insurance Premium, respectively.
  4. With this term insurance plan, individuals can get a longer policy term that can go upto 50 years with a term life cover.
  5. The minimum age to get a Max Life Term Insurance is fixed at 18 years. So, you can start the plan as early as possible.
  6. You can also add Disability Benefits to the term plan with the Rider Option by paying an additional premium amount.
  7. The best thing about this term insurance plan is that the customer can receive all his or her money back on surviving the policy term with the TROP Plan.

SBI Life Term Insurance Plan: Smart Shield

Everybody wants to opt for a Term Insurance Plan that can provide financial protection to his or her family. One of the best options to make this sure is to opt for the SBI Life Term Insurance Plan – Smart Shield Plan. The best thing about SBI Life Smart Shield is that it provides Security, Flexibility and Affordability. To know more about this term insurance plan, it would be better to understand its features. We are showing them below. Do check out.

  1. An individual can choose from two plan options according to his or her financial needs. These options are Level Term Assurance and Increasing Term Assurance.
  2. SBI Life Smart Shield also offers to increase the coverage of plans with two Rider Options at a low cost. These rider benefits are Accidental Death Benefit Rider and Accidental Total and Permanent Disability Benefit Rider.
  3. Remember that customers cannot get any maturity benefits with this plan and also, the rider sum assured cannot be more than the basic sum assured.
  4. The minimum and maximum age of entry are fixed at 18 and 60 years, respectively, for this term insurance plan of SBI Life. The maximum age can be 80 years at the age of maturity.
  5. The Basic Sum Assured is allowed only in the multiples of INR 1,00,000. The minimum amount can be INR 25,00,000 while there is no limit on the maximum amount.
  6. If you are making the premium payment via the single lump sum method, the minimum premium amount can be INR 11,000. On the other hand, if you have chosen Regular Premium payment options, it will range from INR 300 to INR 3,000 depending on the frequency.

Cost-Benefit Analysis of LIC vs Private Insurers

It is important to know the cost of premium when going for a Term Insurance Plan so that you can decide according to your finances. That’s why we are showing the premium amount of term insurance provided by the LIC and other private insurance companies in the below table. This will give you a better understanding of the cost-benefit in the premium amount. Please check.

Term Insurance PlanMinimum Premium Amount
LIC Term Insurance PlanSingle Premium - INR 30,000

Limited and Regular Premium - INR 3,000
ICICI Prudential PlanINR 2,400 excluding GST
SBI Life PlanSingle-Premium - INR 11,000

Regular Premium

Yearly - INR 3,000
Half-yearly - INR 1,500
Quarterly - INR 750
Monthly - INR 300
HDFC Life PlanAnnual Premium - INR 2,376
Max LifeDepends on the Sum Assured and Policy Term

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