You may have seen big newspaper ads given by LIC recently. The ads talk about a new term insurance plan: LIC’s Tech-Term. Term insurance provides financial protection to the insured’s family in case of his or her unfortunate demise within the chosen term. It is a simple way of insuring your life and ensuring your dependents are financially secured to the extent you want them to be. All of us agree that we need term insurance because it is the cheapest form of insurance. But, how does LIC’s Tech-Term fare as a policy? RupeeIQ gives you the details. Read on.
Also read: All about term insurance
LIC’s Tech-Term main features
This is a pure term plan. This means there is no investment angle. If the policyholder has paid the premium dues and dies within the policy tenure, their nominee will get the sum assured.
No loan will be available under this plan.
Unlike other LIC policies, there is no survival benefit in Tech-Term (UIN: 512N333V01) if the policyholder survives the policy term.
Minimum age at entry – 18 years (last birthday)
Maximum age at entry – 65 years (last birthday)
Maximum age at policy tenure end – 80 years (last birthday)
Minimum basic sum assured – Rs 50 lakh
Maximum basic aum assured – No limit. High sum assured rebate is applicable for regular, limited & single premium payment.
Policy term – 10 to 40 years
Premium paying term – If the policy is a regular premium type, then the premium paying term is the same as the policy term. If the policy is a limited premium type, then the premium paying term is different.
1. Rider: You have the option to enhance your coverage by opting for ‘accident benefit rider’ on payment of additional premium for the rider benefit. The benefit cover under this rider is available during the premium payment term only or up to the policy anniversary on which age nearest birthday of the life assured is 70 years, whichever is earlier. If this rider is opted for, in case of accidental death the accident benefit rider sum assured will be payable as lump sum along with the death benefit under the base plan.
2. Increasing sum assured: You can choose to increase your policy sum assured. Under this option, your sum assured increases by 10% of basic sum assured each year from the sixth policy year till the fifteenth policy year till it becomes twice the basic sum assured. From sixteenth policy year and onwards, the absolute amount assured to be paid on death remains constant i.e. twice the basic sum assured till the policy term ends. Do note that the death benefit option once chosen cannot be changed later.
3. Take death benefit amount in installments – In LIC’s Tech-Term, there is an option to receive death benefits in instalments over the chosen period of five or 10 or 15 years instead of a lump sum amount under an in-force policy. This option can be exercised by life assured during his/her lifetime for full or part of death benefits payable under the policy. The instalments are paid in advance at yearly or half-yearly or quarterly or monthly intervals, as opted for, subject to minimum instalment amount i.e. monthly Rs 5,000, quarterly Rs 15,000, half-yearly Rs 25,000, and yearly Rs 50,000. Do note that the interest rate applicable for arriving at the instalment payments under this option is fixed by LIC from time to time.
Medical test requirement
You can buy LIC’s Tech-Term Plan without undergoing a medical examination if you are a non-smoker and have no past medical history.
The medical test requirement may depend on your sum assured, annual income and age.
How low-cost is LIC’s Tech-Term
Unfortunately, LIC’s Tech Term plan is a bit more expensive than many plans from private sector insurance players. For example, a 40-year (non-smoker) male will pay Rs 13,770 per annum plus GST for Rs 1 crore level sum assured for 20 years (coverage till 60 years of age).
You can check for your age and requirement and compare the premium rate with others.
LIC’s Tech Term is cheaper compared to the previous online plans from LIC.
Take a look below at the sample illustration for the premium.
How to buy online
Log on to the LIC website (www.licindia.in) for buying this online product. Click on ‘Buy Policies Online’. Select plan LIC’s Tech-Term.
Choose your desired Sum Assured, Sum Assured option (Level/Increasing), Policy Term, Premium Payment option (Regular/Limited/Single)
and Premium Payment Mode (Yearly/Half-yearly) for Regular and Limited Premium Payment option, Date of Birth, Gender and Smoking status.
After filling in the details, a premium calculator will calculate the premium for the chosen parameters. Enter other details such as Name, Address, Occupation, Qualification etc. displayed on the screen and complete the proposal form online.
Pay premium online and fulfill the underwriting requirements, if any.
LIC’s Tech-Term plan is another term insurance plan alternative. As we have pointed out it is a bit more expensive than many plans from private sector insurance players. Then, why should you buy it? Most LIC policyholders buy a policy from LIC not because the policy is the best, but because they trust LIC.
The same logic applies to LIC’s Tech-Term plan. Tech-Term is an online term life insurance and hence offers competitive premiums. But it is trust, not low cost, that is the logical reason for buying this term insurance plan. LIC enjoys a huge amount of trust, which is why customers still buy its policies. If you are an LIC policy aficionado, this online term plan is the best that LIC has to offer. For those who trust LIC and are looking for a term plan, they can opt for this policy. Usually, your insurance cover should be 20 times your annual income so that if you die prematurely, your dependents will be able to clear any outstanding liabilities and lead a respectable and financially independent life.
More term insurance stories here.
Disclaimer: Views expressed here in this article are for general information and reading purposes only. They do not constitute any guidelines or recommendations on any course of action to be followed by the reader. The views are not meant to serve as a professional guide/investment advice / intended to be an offer or solicitation for the purchase or sale of any financial instrument including term insurance plan.