LIC's Tech-Term plan is a non-linked, without profit, pure protection 'Online Term Assurance Policy' which provides financial protection to the insured's family in case of his or her unfortunate demise within the chosen term.
LIC Tech-Term Plan: The Life Insurance Corporation of India (LIC), India’s only government-owned life insurance company has launched a new term insurance plan which will be available only online. The new term plan of LIC is titled ‘LIC Tech Term’ plan denoted by LIC Table 854. LIC’s Tech-Term plan is a non-linked, without profit, pure protection ‘Online Term Assurance Policy’ which provides financial protection to the insured’s family in case of his or her unfortunate demise within the chosen term. The latest LIC term insurance plan covers death due to any reason including accidental deaths except suicide during the first year. The LIC Tech Term insurance plan can be bought by resident Indians and is not available to Overseas Citizen of India (OCI) or Person of Indian Origin(PIO). NRI’s, however, can apply for the new LIC term plan while their stay in India subject to the condition that the applicant is residing in any one of the permissible countries only.
LIC Tech Term features
The latest plan from LIC, the ‘LIC Tech Term’ is a pure term insurance plan in which the sum assured is paid to the nominee if the death of the policyholder happens before the end of the policy term. On maturity, on surviving the policy term, nothing is paid to the policyholder. Pure term plans are low-cost, high sum-assured insurance plans.
The minimum life cover i.e. sum assured for LIC Tech Term is Rs 50 lakh with no upper limit. Based on one’s income proof, one may keep a high sum assured as well. As a policyholder, one has to pay the premium either yearly, half-yearly or a single premium may be paid. The minimum and maximum policy term are 10 years and 40 years respectively, while the maximum age for policy coverage is 80 years. The premium rates will differ for smoker and non-smoker lives. The plan comes with an Accidental Benefit rider which can be optionally added to the plan by paying an additional premium.
For a 30-year-old buying LIC Tech Term plan for 30 years for a sum assured ( Level Sum Assured) of Rs 50 lakh, the annual premium comes to Rs 9,912 inlcuding GST. For the same person, if the sum assured is Rs 1 crore, the annual premium comes to Rs 17,445.
How to buy LIC Tech Term plan
To purchase LIC Tech-Term, one will have to directly go to the LIC website, fill the details, make the payment and wait for the policy document to be received at the address. One can make a premium payment including renewal payments through net banking, debit card, credit card, Amex card, UPI, IMPS and e-wallets. There will, however, be a convenience fee charge depending on the premium amount during credit cards transactions.
LIC Tech Term – Claim payments to nominees
LIC Tech Term has features to customise the policy as per one’s need. As not all family remembers may be in a position to deploy or invest the death benefit proceeds in the right manner, the plan allows the death benefit to be availed as installment of 5 years, 10 years or 15 years. The installments to be paid to the nominees shall be paid in advance at yearly or half-yearly or quarterly or monthly intervals, as opted for by the policyholder.
LIC Tech Term – Death benefit options
Further, the policy has two different options for the sum assured to choose at the time of buying the policy. Under Option I, one may choose a ‘Level Sum Assured’ in which the sum assured will remain constant till the end of the policy term Under option II, one can choose the ‘Increasing Sum Assured’ option in which the sum assured will keep increasing every year, subject to conditions. The life cover will be constant for the initial five years and then increase by 10 per cent for the next ten years and later on will remain constant till the end of the policy term.
In other words, the sum assured will increases by 10 per cent of basic sum assured each year from the 6th policy year till 15th policy year till it becomes twice the basic sum assured. From 16th 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.
Typically, insurers make buyers undergo medical test when one is buying a high life cover. LIC’s Tech-Term plans can be bought under the non-medical scheme, if one is in the age bracket 18 – 35 years, with annual income more than Rs 3 lakh and the sum assured is up to Rs 75 lakh. For those who are between 36-45 yrs, with annual income more than Rs 5 lakh, one may buy up to Rs 50 lakh, subject to the condition that the person is a non-smoker and has no past medical history. However, the underwriter’s decision will still be final in such cases.
What to do
For someone looking to buy life cover or enhance sum assured one may consider LIC Tech Term plan. As a thumb rule, one should have a life cover of at least ten times of one’s annual take-home income. Make sure to disclose all material information while buying life insurance. Also, carefully evaluate the options available in the plan to make an informed decision.