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LIC Tech-Term – Online Term Insurance Plan – How good is this Term Plan?

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LIC Tech-Term – Online Term Insurance Plan – Features, Pros and Cons

One of the best ways to have life security with low cost is to consider a term insurance plan. There are several private and public sector life insurance companies that offer term insurance plans in India. LIC is considered as the most trusted brand in India. LIC offers Tech-Term which is pure online term insurance plan. In this article, let us check LIC Tech Term Plan Features, what does it cover, major exclusions, Pros and Cons.

LIC Tech-Term No 854 – Key Features

Here are the key features of this term insurance plan

  • This is pure non-linked, non-participating and pure risk premium term insurance plan which provides financial protection to the family in case of unfortunate death of the life insured.
  • This plan comes with two options – level sum assured and increasing sum assured.
  • Flexibility to choose premium payment options. One can choose a regular premium payment plan, single premium payment plan or limited premium payment plan.
  • Flexibility to choose the policy tenure and premium payment term.
  • This plan offers special rates for women.
  • Plan comes with high sum assured rebate.
  • Special rates for non-smoker individuals.
  • Optional accident death benefit rider available.
  • This plan is numbered as 854 with unique ID UIN: 512N333V01
  • This term insurance plan can be purchased only online. Means you need to login to LIC website and purchase it directly online. You cannot buy through an insurance agent or by visiting LIC branch.

What is the eligibility to take LIC Tech-Term Plan?

Here are the eligibility criteria.

Min age of entry 18 years
Max age of entry 65 years
Max age at maturity 80 years
Min Basic Sum Assured 50 lacs
Max Basic Sum Assured No limit
Policy Term 10 to 40 years
Premium Payment Term
– Single Premium Once
– Regular Premium Same as policy term
– Limited Premium 10-40 Years – Policy Term minus 5 years
15-40 Years – Policy Term minus 10 years

What are various benefits in the LIC Tech Term?

Death Benefit

In case of unfortunate death of the life insured, LIC would pay sum assured on death to the nominee.

Regular Premium and limited premium – Sum assured on death would be higher of the following:

  • 7 times of annualized premium
  • 105% of total premiums paid
  • Absolute amount assured to be paid on death

Single premium policy – Sum assured on death would be the highest of:

  • 125% of single premium paid
  • Absolute amount assured to be paid on death

Absolute amount assured on death means:

Option-I – Level Sum Assured: Absolute amount assured on death equals to the basic sum assured.

Option-II – Increasing Sum Assured: Absolute amount assured on death equals to the basic sum assured till 5th policy year and thereby increases 10% of basic sum assured each year from 6th policy year to 15th policy year till it becomes twice the sum assured.

Maturity Benefit in LIC Tech Term

Since this is the pure risk protection plan, there is no maturity benefit in this plan.

Rider Benefit in LIC Tech Term

One can avail LIC accident benefit rider under regular premium and limited premium payment mode.

Under this rider, in case of unfortunate death of life insured happens by accident, the nominee would get the basic sum assured as an accident benefit rider beyond regular death benefit.

Death Benefit in installments

LIC offers another key benefit to nominee in case of death benefit. Such death benefit can be opted to get in installments. One can opt to take the death benefit to be paid such as Rs 5,000 month or Rs 15,000 quarterly or Rs 25,000 half year or Rs 50,000 yearly.

What is the surrender Value in LIC Tech-Term Plan?

There is no surrender value for regular premium payment policy in the LIC Tech Term. However, in the following cases, the premium amount would be refunded:

Single Premium Policy: Applicable refund would be paid during the policy term. Refer policy brochure for more details

Limited Premium Payment: Applicable refund would be paid, in case of premium payment term of less than 10 years, at least 2 years premium should be paid and in case of more than 10 years premium payment term, at least 3 years premiums should be paid.

Is there any loan eligible in LIC Tech Term?

There is no loan available in this term plan.

How to purchase LIC Tech Term Plan?

You can follow below steps to purchase LIC Tech Term.

Step-1 – Visit LIC of India

Step-2 – Click on Buy Policies Online Link

Step-3 – Select LIC Tech Term and click on “Buy Online”

Step-4 – Select sum assured, sum assured option (level or increasing), policy term, premium payment option (regular or limited premium payment term or single premium) and premium payment mode (half yearly or yearly for regular plans), date of birth, gender and smoking status.

Step-5 – Premium is computed based on the details entered

Step-6 – Enter basic details like name, address, occupation, qualification etc.,

Step-7 – Pay premium online

The process is complete. LIC can contact for any additional details that may be required. Once it is completed, LIC would issue a policy within a few days.

What is Suicide Exclusion in LIC Tech Term?

This insurance plan is void if the life insured commits suicide within 12 months from the date of the commencement of the risk. In such case, the nominee would get only the following and not entire sum assured.

In case of a single premium, if the life insured commits suicide within 12 months, 90% of the single premium paid would be refunded.

In case of regular / limited premium payment plans if the life insured commits suicide within 12 months, 80% of the premium paid would be refunded.

What is High Sum Assured Rebate in LIC Tech Term?

One can get the high sum assured rebate (discount) on the premium.

Option-I – Level Sum Assured

Sum Assured
Age Band < 1 Crore 1 to 2 Crore > 2 Crore
< 30 years Nil 12% 20%
31 to 50 years Nil 10% 15%
Above 51 years Nil 5% 7%

Option-II – Increasing Sum Assured

Sum Assured
Age Band < 1 Crore 1 to 2 Crore > 2 Crore
< 30 years Nil 10% 18%
31 to 50 years Nil 8% 13%
Above 51 years Nil 4% 6%

What are sample premiums in LIC Tech Term Insurance Plan?

Here are the sample premiums for 30 years male, non-smoker and basic sum assured of Rs 1 Crore.

Option-I – Level Sum Assured

Age Policy Tenure Regular Premium Yearly Premium – Limited Premium payment – (tenure minus 5 years plan) Yearly Premium – Limited Premium payment – (tenure minus 10 years plan) Single Premium
20 20 5,368 6,160 8,008 64,592
30 20 7,216 8,360 10,912 87,120
40 20 13,770 16,110 21,060 1,66,230

 

Option-II – Increasing Sum Assured

Age Policy Tenure Regular Premium Yearly Premium – Limited Premium payment – (tenure minus 5 years plan) Yearly Premium – Limited Premium payment – (tenure minus 10 years plan) Single Premium
20 20 7,020 8,190 10,620 85,140
30 20 10,350 12,060 15,750 1,24,920
40 20 21,252 24,932 32,568 2,56,036

Why to consider LIC Tech Term Insurance Plan?

Here are positive things about this term insurance plan.

  • LIC Tech term comes with good features, flexible options and flexible tenure.
  • Flexible premium payment options (regular, single premium and limited premium payment options)
  • In case of high sum assured, one can get rebate / discount on the premium.
  • Special premium rates for non-smokers and female individuals.
  • Accident death benefit rider helps to get enhanced coverage.
  • Nominee has option to get death benefit in installments.
  • Generally, term plans would not have surrender benefit. In case of the LIC Tech Term, applicable premium would be refunded in case of single premium or limited premium payment plans.

Negative Factors in LIC Tech Term Plan

Here are few negative factors in this term plan.

  • Accident death benefit rider is not in-built and comes with additional premium.
  • Since this is the pure risk protection plan, there are no maturity benefits.
  • There is high sum assured rebate if the sum assured is less than 1 Crore. No rebate for a lower sum assured.
  • There is no loan available in such plans.
  • Suicide exclusion makes the plan un-attractive.
  • While LIC is trusted brand, the premiums are higher compared to private life insurance term insurance plans.

LIC Tech Term Plan – Should you opt?

LIC Tech Term Insurance plan comes with several good features. While the premiums are on the higher side, owing to LIC brand and its nice features, one can opt this term insurance plan.

Source: LIC tech Term Plan Policy Brochure

Suresh KP

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