LIC has launched new LIC term plans, and one online plan LIC e term as per the new guidelines issued by IRDA. One of the new guidelines for life insurers were to follow the mortality tables of 2006-08 as per IRDA’s Indian assured lives mortality 2006-2008. (Read : new guidelines for life insurers)
Along with these, LIC has also entered in Online term plan category and launched LIC e term plan.
Since LIC was following an age old mortality rates, so the term insurance premium or mortality charges, in general were very high. The new LIC term plans now offer some reasonably better premium quotes at least as compared to their earlier versions. Let’s check this out in detail.
LIC term plans and LIC e term – in brief
LIC has 2 term plans in its kitty. LIC Anmol Jeevan and LIC Amulya Jeevan. The name is similar to the earlier term products. From the core, both of these are pure term insurance policies with only death benefit and no maturity benefit. The main differences in these 2 products are the minimum /maximum sum assured, maximum cover ceasing age and also the term of the plan.
Whereas LIC e term is pure online term insurance plan.
Feature comparison of LIC term plans
LIC e term features
| Minimum Sum Assured | Rs 25 lakh for aggregate category
Rs 50 lakh for Non-smoker category |
| Maximum Sum Assured | No Limit |
| Minimum age at entry | 18 years |
| Maximum age at entry | 60 years |
| Maximum cover ceasing age | 75 years |
| Minimum Policy term | 10 years |
| Maximum Policy term | 35 years |
| Mode of premium payment | Annually |
LIC term plans – Premium comparison with other Insurers
As these days you can get online term plans which are comparatively much cheaper, so this comparison is between LIC term plans available offline and some popular online term plans for a sum assured of Rs 24 lakh and Rs 1crore with a maximum term of 25 years. All comparison will be of a healthy, non-smoker male. And the premium quotes are exclusive of service tax
*Maximum cover ceasing age is 65 years, so term of 25 years is not available ; Birla easy protect doesn’t offer cover below Rs 50 lakh
Now the above calculation clearly shows that how costly the LIC term plans still are as compared to other insurance company’s term policies. Many would argue that the comparison of online plans with offline plans is not right , but as far as I know you can buy the online plans mentioned above of HDFC and Birla through agent also (means these plans are available offline too)and thus there would be hardly any difference in the online and offline approach.
Comparison of LIC e term plan with other Online Plans
| Age | LIC e term | HDFC Click 2 protect Plus | Kotak e-preferred |
| 30y | 9202 | 6492 | 5319 |
| 40y | 20010 | 14491 | 10293 |
| 50y (25y term) | 32422 | 26465 | 18946 |
The above comaprison is for 50 lakh of sum assured for a healthy non smoker male.It is very much visible from the above comparison that even though
It is very much visible from the above comparison that even though LIC e term is online term policy, still as compared to other policies available online, ths product is very costly.
(also read : LIC Money Back Plans review)
LIC Term plans – Conclusion
The premium rates of all of LIC term plans, including online term plan LIC e term has considerably reduced as compared to their earlier versions but still even in this new avatar these plans are way too costly in comparison to others.
I always advise on having an adequate insurance coverage through term insurance plans being a cheapest option available. So, those of you who are avoiding term policies saying that you don’t trust private players and LIC policy is costly, they can go ahead now. And for those who are not in love with LIC yet, they should consider the other cheaper options available.
Sir, Very nice article. Thank you. I would like to know why is LIC not offering the term plans as online products as it is the pure protection plan and thereby reduce the burden on customers as they may not have to pay agent commission which i believe is about 25-40% .
Thanks for your appreciation.
With the rising competition and increasing awareness among people for online term plans , I think LIC will soon launch its online term plan. Now as you know that LIC has the largest agent force and online term plans offers very less commission so may be they are delaying online plans due to some opposition from agent community.
Still there are many other good and well established corporates which offers a very cost effective online term plans, so people can chk with them
Why are you comparing on line plans of others (not sure about birla though) with LIC?? not may people with online purchase. pls compare with offline plans of other players with LIC….
though not a LIC fan… i think it is being pasted badly by all EXPERTS !!!
Mr B, u can buy many plans available online through agent too. I guess agent is the main difference between offline and online plans, right? Birla easy protect and HDFC click 2 protect as compared above with LIC are available through agents also. That’s why i don’t find any reason to not compare it with online plans.
u r correct presence/absence of agent is the main difference…..
“online plans can be bought though agents also”…….Thanks… thats a news for me…..
but will the premium increase if online plans are bought through agents????
if not that there is no reason not to buy these plans through agents……….
HDFC click 2 protect charges 2.5% extra on premium if bought through agents, i don’t know if they charge the same if you visit there local branch and ask for the policy. Birla easy protect does not charge anything extra, and i think this policy is available through agents only. ICICI I care as far as i know does not charge anything extra if bought through there local office people.
See…you have to explore a bit. Decide on the policy you want to buy and then lookout for the premium if bought through agents or direct.
By no means the title ” the same old story” is correct…. the premiums have reduced considerably….
Same Old story only depicts that even after taking the new mortality rates, the premium costs are way too higher than other available policies.
My calculation says that the premiums have been decreased by 0.77 times in amuly ajeevan.. (including ST)….
I can’t comment on the number of times but yes compared to earlier versions premiums have definitely reduced
What is meaning of maximum and minimum policy term in lic term plan?
At the time of buying a policy, you need to decide the term for which you want to continue the policy. minimum term is the least term for which the policy is available , rest you may decide the term at the time of buying the policy whether it is minimum, maximum or any term between.