Term Insurance September 27, 2019
LIC’s new term insurance plan has changed the way industry perceived term insurance. Being a pioneer in this industry, LIC has always had the first mover advantage. With preferential premiums, flexible payout facility, etc. it indeed a good-buy.
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What is LIC tech term plan?
LIC tech term plan is a non-linked pure life insurance plan which ensures the financial security of the insured person’s family in case of his sudden demise. This is a without profit life insurance policy with no surrender benefit or maturity benefit. The tech term plan was launched by the Life Insurance Corporation of India (LIC) on 1st Sep’19 and is being considered as one of the best term insurance plans available in the Indian insurance market.
Features and benefits of LIC tech term plan
Let us have a look at the major features of the LIC tech term plan.
- LIC tech term plan is a pure online term insurance plan.
- This plan provides coverage to the insured person until the age of 80 years.
- The minimum sum assured in case of an LIC tech term plan is Rs. 50 lakhs and there is no maximum limit for the sum assured.
- The tenure of the LIC tech term plan is for a period of 10 years to 40 years.
- Premium will be paid for a limited period i.e. for 5 years or 10 years. The premium payment can be done by Regular method i.e. by paying Rs. 3000 monthly or by Single premium payment method where Rs. 30,000 is paid.
- LIC tech term plan has provisions for low premium in the case of non-smokers and women.
- A policyholder can choose a Level Sum option or an Increasing sum assured option. Depending on this the nominee of the policyholder would receive the death benefit in case of the policyholder’s demise.
- In the case of this policy, the death benefit remains the same for the first 5 years and then it starts increasing at the rate of 10% for the upcoming 10 years. After the 16th year, no more increase in sum assured is feasible.
- The payment of the death benefit can be done in the form of installments in every 5 years, 10 years or 15 years.
- Policyholder can opt for additional death rider benefit by paying extra premium.
- A minor can be appointed as a nominee but an appointee should also be present for the minor nominee.
- LIC tech term plan will remain active even if the policyholder is traveling abroad for a short duration or a longer duration.
Who can apply for the LIC tech term plan?
The LIC tech term plan is best suitable for those individuals who are working and are in search of an option for ensuring the financial security of their dependents. The LIC tech term plan can be purchased by resident Indians only. The benefits of this policy cannot be availed by overseas citizens of India (OCI) or by Persons of Indian Origin (PIO). However, NRIs can purchase the LIV tech term plan during their stay in India and under the condition that the applicant resides in one of the countries permissible as per the guidelines of the Corporation.
An applicant can purchase the LIC tech term plan for himself only and should have sufficient income earned by him. The minimum age for purchase of the LIC tech term plan is 18 years and the maximum age is 60 years.
How to purchase the LIC tech term plan?
The LIC tech term plan is only available for online purchase. An applicant can visit the LIC web portal and fill in all the necessary details. Then the payment has to be completed and the policy document will be received by the applicant at the corresponding address. Premium payment for the LIC tech term plan can be made by internet banking, credit card, debit card, e-wallets, etc.
Some negative aspects of the LIC tech term plan
- The LIC tech term plan has a high premium rate as compared to other insurance providers. The claim settlement ratio of LIC is high and so it has demand for a higher premium from the policyholders.
- The payment of the LIC tech term plan can be made by credit card and the credit card charges a high range of charges for these transactions i.e. within the range of Rs. 2.9 to Rs. 5500 for each transaction based on the amount of premium paid.
- In case of suicide by the policyholder within a year of purchase of the plan, no death benefit can be claimed by the nominee of the policyholder.
Buying a policy with LIC is safe as the company is one of the most trustworthy insurance companies in the country even today. However, it is always advisable to study the plan carefully and weight pros and cons before investing in the same.