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Insurance Plans India 8572 views April 27, 2020
Death Insurances, simply explained, are Term Insurance policies that predominantly provide death benefits. Term Insurances, among the oldest form of insurance, should not be viewed as an investment but should rather be seen as a medium to safeguard your family from unforeseen financial challenges in your absence. It essentially pays the sum assured from the accumulated premium payable within the policy tenure, i.e. in case the insured individual survives the policy tenure then the cover ceases and no amount is payable.
LIC Death Insurance Policy provides death benefits as a payout to the nominee of a life insurance policy, pension or annuity. This is only when the insured individual or the annuitant dies within the policy tenure. These policies are not subject to Income Tax and the pay-out is done on a lump sum basis to the beneficiary.
Table of Contents
The following are the Death Insurance Plans also referred to as Term Assurance Plans offered by LIC:
Death Insurance or Term Assurance Plans offered by LIC covers death due to medical and natural conditions as well as accident-related death.
LIC also offers other life insurance policies that offer death cover besides other benefits. So while we are discussing LIC death policies, we thought to talk about these plans too. Let’s read about them below.
LIC Bachat Plus – It’s a non-linked, participating life insurance plan that offers death benefits based on the premium option chosen by the policyholder. Single premium plans will have two options – Option A and Option B. Sum assured on death for Option A and Option B is 10 times the tabular premium and 1.25 times the tabular premium, respectively. Limited premium plans will come with Option 1 and Option 2.
For Option 1, the sum assured on death will be the greater of
The sum assured on death for Option 2 will be the greater of
If the death happens during the first five years before the commencement of risk, the premium will be refunded without interest. The premium won’t include taxes, additional amount chargeable under the policy due to underwriting norms and rider premium, if any. In case the death happens on or after the commencement of risk but before the maturity date, the sum assured according to the above-mentioned options will apply. If you choose the limited premium payment option, the death benefit payout won’t exceed 105% of the premiums paid till the date of death. The premium mentioned here does not include taxes, extra premium and rider premium, if any.
LIC New Endowment Plan – If you die during the policy term, you will get a sum assured on death besides vested simple reversionary bonuses and final additional bonus, if any. The sum assured on death remains the higher of
The death benefit payout won’t be less than 105% of the premiums paid till the date of death. The premium mentioned here does not include taxes, additional premium and rider premium, if any.
Conclusion
LIC Death Insurance Policies are sufficient to provide for one’s family soon after the life assured’s unfortunate demise. It is to be noted that all LIC Life Insurance Plans offer a death benefit. However, Term Assurance Plans by LIC are designed to specifically cover or death by providing detailed death benefits.