LIC e-Term Plan Review

LIC e-Term Plan is a term life insurance policy which provides financial protection to a person’s family in case of his sudden death. If the person survives till the end of the policy term, nothing is payable to him.

A term life insurance provides a substantial amount of protection against death at fairly low prices. The LIC e-Term plan is more than 30% cheaper than the LIC offline term plan, but compared to many online pure protection
term plans from private companies, it is more expensive.

LIC is better in terms of its claim settlement ratio (CSR). According to Insurance Regulatory and Development Authority, LIC has the highest percentage at 97.73 per cent.

LIC e-Term Plan Aggregate versus Non-smoker Category

Under this plan, there are two categories of premium rates namely Aggregate Cetgory and Non-Smoker category.

If you smoke or use tobacco in other forms, your premium will be roughly 25-30% higher than that of a non- smoker.

  • For Sum Assured upto Rs. 49 lacs Aggregate category rates only would apply.
  • For Sum Assured Rs. 50 lacs and above there is an option to choose differential premium rate for Non-smoker category.
  • However, the application of Non-smoker rates shall be based on the findings of the Urinary Cotinine test. In all other cases the Aggregate premium rates shall be applicable.

Indicative Premiums

LIC e-Term Plan Review - Aggregate Rates for 50 Lakhs Sum Assured

 

LIC e-Term Plan Review - Non Smoker Rates for 50 Lakhs Sum Assured

Online Benefits

LIC e-Term is available through on-line mode only and no intermediaries are involved. Hence it is more convenient and cheaper as compared to an offline policy.

Death Benefit of LIC e-Term Plan

In case of unfortunate death of the Life Assured during the policy term Sum Assured shall be payable.

Maturity Benefit of LIC e-Term Plan

On survival to the end of the policy term, nothing shall be payable.

Sum Assured

Minimum
Rs. 25,00,000 for Aggregate category
Rs. 50,00,000 for Non-smoker category
Maximum – No limit

Qualifying Criteria of of LIC e-Term Plan

  • Person should be an Indian citizen.
  • A Non-Resident Indian (NRI) is not eligible for LIC e-Term Plan.
  • An Overseas Citizen of India (OCI) is not eligible for LIC e-Term Plan.
  • A Person of Indian Origin (PIO) is not eligible for LIC e-Term Plan.
  • A person should have at least Rs 3 lakhs of annual income to purchase under non-smoker rates.
  • Minimum Age at Entry is 18 years.
  • Maximum age at entry is 60 years.
  • Maximum cover ceasing age is 75 years.
  • Minimum Policy Term is 10 years.
  • Maximum Policy Term is 35 years

Mode of Payment

Premiums are to be paid annually.

Medical Test

In general, medical test is mandatory if a person opts for non-smoker rate and if it is not covered under Non-medical scheme. Underwriting requirements and a person’s health disclosures will also determine whether a medical test would be required or not.

Tax Benefit

  1. Premium paid is eligible for tax benefits under Section 80C of Income Tax Act.
  2. Benefits received are exempt from tax under Section 10(10D).

Exclusion

If a policyholder dies within 1 year of the start of the policy due to suicide, 80% of premiums paid will be paid as death benefit.

Final Words

LIC e-Term Plan is a very good term insurance product from LIC which is one of the most trusted names in insurance in India. It is cheaper compared to its offline version and quite convenient and useful.

I hope you found this article useful. If you have any comments please feel free to contact me. Before making any investment decision, please contact your financial adviser.

I have provided this article for educational purpose only.

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Reference

Subhodeep Mukhopadhyay

I am a Management Consultant in the Education Sector. In my previous corporate career, I have worked in Banking, Private Equity and Software industry. I am an MBA in Finance/ Computer Engineer and enjoy doing equity research and financial analysis in my free time.

One thought on “LIC e-Term Plan Review

  • November 30, 2016 at 4:12 pm
    Permalink

    is accidental death is covered in this policy? or death due to any desease is covered in this policy?

    Reply

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