Insurance Plans 134 views April 11, 2020

LIC Convertible Term Assurance plan is a term insurance plan which offers affordable and low premiums. The premium paid on the insurance plan can be converted later into a whole life policy or an endowment insurance policy. This plan is specifically designed for those individuals for whom a high premium is not affordable.

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Features of LIC Convertible Term Assurance Plan

This plan can be converted into a whole life or endowment plan during the specified term of the plan. The key features of the LIC Convertible Term Assurance Plan are as follows:

  1. The plan is designed for those people who cannot afford higher premium payments which are required for a whole life plan or endowment assurance plan.
  2. The insured is not required to undergo a fresh medical examination at the time of conversion of the insurance plan
  3. Riders- The plan does not offer any add-on rider benefit on the insurance plan.
  4. All the benefits under the insurance plan will cease on non-payment of the premium on the policy after the grace period for the premium payment.
  5. The plan does not offer any surrender benefit to the holder of the policy
  6. The facility of loan is not available under this insurance plan

Benefits of LIC Convertible Term Assurance Plan

The benefits of LIC Convertible Term Assurance Plan are as follows:

Death Benefit

Under the plan basic sum assured in the insurance plan is paid on the death of the insured individual during the term of the policy to the beneficiary or the nominee of the policy

Maturity Benefit

As LIC Convertible Term Assurance plan is a pure protection insurance policy no maturity benefit is  paid to the insured on the maturity of the plan

Tax Benefit

The premiums in the plan paid by the insured can be availed as an exemption under section 80C of the Income Tax Act up to a maximum of Rs.1,50,000. The death benefits received under the plan are also tax-exempt as provided under Section 10(10D) of the Income Tax Act.

Eligibility conditions of LIC Convertible Term Assurance Plan

It is necessary to check the eligibility criteria before making a proposal to the Insurance company. Eligibility Conditions of LIC Convertible Term Assurance Plan are as follows:

  1. Minimum sum assured in the plan is Rs 50,000 and Maximum sum assured in the plan is Rs 1 crore
  2. Minimum term of the policy is 5 years and Maximum term of the policy is 7 years.
  3. The term of premium payment is the term of the policy. The premium in the plan is to be paid during the entire term of the policy.
  4. The Minimum age required for entry to the policy is 20 years and maximum age is 50 years
  5. Maximum maturity age is 57 years
  6. The modes of payment are Yearly, Monthly, Quarterly, Half-yearly and Salary Savings

Conclusion

LIC Convertible Term Assurance policy is best for those people who are teenagers or have recently started working or whose earnings are not very high but they want to purchase insurance for the protection of their family through a whole life insurance plan or an endowment insurance policy with a much higher amount of premium. Hence under this plan, the payment of premium is low initially before the conversion of the insurance plan. LIC Convertible Term Assurance has been withdrawn by LIC and is no more in force. Hence you can buy any other similar plan with the same features and benefits.

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