LIC Tech Term Plan – New Online Term Plan Review

After such a long wait, LIC is finally coming up its new online term plan known as LIC Tech Term (Plan-No.854). Prior to this, LIC was continuing to offer its old E-term plan.

The premiums in E-term plan were almost double than that of similar plans which were being offered by private companies.

There is a very popular phrase in Hindi which goes like ‘Der Aaye Durasat Aaye’. Likewise, the same can be translated into English as ‘Better Late Than Never’.

LIC’s new plan has not launched yet but it will surely hit the market in a few days.

Why Is LIC Launching A New Online Term Plan?

LIC had been enjoying the trust of Indian consumers as the best brand in the insurance sector. For the very same reason, LIC was charging an extra premium on its E-term plan. When other private insurance companies were offering term cover of 1 Crore at a premium of 9000-10000 per annum, LIC was charging around 18000-20000 for the same sum assured.

LIC thought that its consumers would keep discarding the private insurers and continue to buy their term plan.

Keeping all that aside, there was another reason too – LIC always used to boast about its high claim settlement ratio as compared to the private insurance companies. The entire scenario changed last year when Max Life had a better claim settlement ratio than LIC. As of now, most of the private insurers have more or less of the same claim settlement ratio as LIC.

LIC must have realized that it’s somewhat difficult to sell their e-term plan in a price-conscious market like India. Having learned the lesson, LIC knows that it needs to reduce the premium immediately. Hence, it is coming up with its new online LIC Tech-Term Plan.

Now, the question is – Should I buy the new tech term plan launched by LIC? Before getting into that, let’s study the details and features of the plan which will soon be launched by LIC.

Also Read: LIC Transaction Status Online

LIC New Term Plan – Details and Eligibility

Here is the screenshot which explains the eligibility criteria and details of LIC’s new Term Plan.

1. Minimum entry age is 18 years and the maximum is 65 years.
2. Maximum maturity age is 80 years.
3. Minimum sum assured is 50 Lakhs and there is no limit on the maximum sum assured.
4. The maximum term of the policy is 40 years.

LIC Tech Term – Features

Here are the features of LIC’s new Tech-Term Plan.

It is an online term plan – Your family will get the sum assured in case you die.You will not get anything if you survive the term of policy i.e. there are no maturity benefits.

1. There are 3 payment options, namely single, limited and regular.
2. There are 2 options in sum assured – Level and Increasing sum assured.
   1. Level means your sum assured would remain the same throughout the term.
   2. The increased sum assured means that your sum assured would be the same for 5 years. But then it would increase by 10% for 10 years. Hence, it will double in 15 years and remain the same after that period of time.
3. Additional options of taking sum assured in installments for 5/10/15 years rather than in lump sum.
4. Maximum coverage up to 80 years.
5. An accidental rider is available in this plan.
6. Low rates for women and non-smokers.

Is It Cheaper Than Private Insurers?

The plan seems to be quite comparable vis a vis private insurance companies term plans. You can take a look at this sample illustration that I have received.

Now let us compare it with the premium which is being offered by private insurers.

Sum Assured -1 Crore (Male) Non Smoker, Term -10 years
Age	30 Years	40 Years
LIC	7396	12106
ICICI Prudential	7262	12029
HDFC	7257	11999
Max Life	6726	10856

As you can see, the premium is very much comparable to private life insurers. It is even cheaper in some cases. Seems to be the first product from LIC that’s going to give tough competition to private insurance companies. Believe me, there’re high chances that other insurance companies will also reduce their premium amount after coming across this.

LIC Tech Term Plan Rebate/Discount

The company is giving rebate on high sum assured as follows:

LIC Tech Term Review – Should I Buy It?

Yes, you can definitely go for the new LIC Tech-Term Plan. Given the trust and brand value of LIC, this product can definitely make a killing in the market.

There are certain FAQs which are definitely going to be asked by people. Let’s take a look at them.

Should I Surrender My Previous Term Plan And Go For LIC New Term Plan?

No, please don’t do that. Even if the premiums are comparable and you’re paying an additional premium of 1000-2000, stick to your old plan.

No company gives you the sure-shot guarantee of 100% claim settlement. Just buying a policy from LIC does not mean that your claim would be settled.

Moreover, insurance companies cannot reject your claims on any ground provided that your policy is more than 3 years old.

Should I Shift From E-term To Tech-Term Plan?

Yes, you can make the shift provided that your health conditions have not deteriorated till now. As the premium in E-term is more than double of the new plan.

Precautions To Take While Buying LIC’s New Term Plan

These are some precautions that you must take while buying LIC’s new term plan to be on the safe side.

1. Only opt for regular premium – Do not go for limited premium or single premium.
2. Go for Level sum assured only. Calculate your needs by clicking on the link – Life Insurance Need Calculator
3. Opt for the lump sum payment option – Do not go for 5/10/15 years installments.
4. Select a term only till the age of 60 i.e. in most cases, it is the retirement age. Do not take term insurance till age 80 at any cost.
5. It’s better to buy an accidental cover from a general insurance company – Do not buy as a rider.

Finally, we’re going to get one good product from LIC.