LIC Tech Term (table 854) – Should You Opt it?

LIC Tech Term (Table 854) is the new term insurance policy which will be launched by LIC on 12th July 2019. It is going to be a non-linked pure life insurance policy. Looking at the various features and benefits if LIC tech term, this one looks promising and best in the market so far. The icing on the cake, the policy is launched by none other than LIC which is known as the oldest and biggest insurance company in India.

While checking the rates of the policy, I can say that the premium amount is cheaper than the plans available in the market. LIC Tech Term Plan will be available only on the online platform so there will be no intermediate require to purchase the policy, hence the policy premium will be cheaper. Let’s deep dive into the details of the LIC Tech Term (Table 854).

LIC is already offering its e-term policy online which is favorite among the Indians. LIC Tech Term is going to be the upgraded version loaded with more features and riders as compared to its existing e-term insurance policy. Before discussing and evaluating the Tech Term (table 854) policy, let’s understand the basics of the term insurance policy.

What is term insurance policy?

You may skip this section if you are already aware of the term insurance policy.

The term insurance policy is the policy where in case of the unfortunate death of the policyholder, their family usually nominee will get the sum assured amount. This is the pure life insurance plan wherein you will not get any maturity benefits. That’s the reason these plans are available at the lower premium as compared to other traditional insurance policy.

List of the existing term insurance plans by LIC

Key features of the LIC Tech Term (table 854) – LIC Online Term Plan

  • It is the pure online term insurance plan.
  • Minimum sum assured for this plan is 50 Lakhs with no upper limit.
  • There are 2 options for premium, single or regular premium.
  • Death benefits can be availed at various time frame like 5 years, 10 years, 15 years.
  • You can opt from two different sum assured options. 1). Level Sum Assured 2). Increasing Sum Assured
  • This plan will provide coverage for up to 80 years.
  • There is an option of accidental rider benefit by paying an extra premium.
  • The lower premium rate for non-smoker and women.
  • LIC Tech Term Plan no. 854.
  • The plan is available only through the online portal.

Eligibility for the LIC Tech Term (table 854)

The eligibility for the LIC tech term plan is as below.

  • Minimum entry age – 18 years
  • Maximum entry age – 65 years
  • Minimum sum assured – 50 Lakh
  • Maximum sum assured – No upper limit
  • Minimum term policy term – 10 years
  • Maximum policy term – 40 years
  • A various premium option, – Single (one time), Regular (Till the policy period), Limited (Up to 10 years)

Since the LIC Tech term plan will be available only through the online portal, the premium amount would be cheaper as compared to the existing term plans available in the market. Here is the approximate premium calculation with the example to understand whether you should opt it or not.

LIC Tech Term – Death Benefits

As mentioned above this policy is pure death benefit so no maturity benefits will be provided. There are two different options for sum assured available.

Level Sum Assured – Death Benefit

Your nominee will get the sum assured amount as a claim, the sum assured amount will remain constant throughout the policy period.

Increasing Sum Assured – Death Benefit

Under this option, you can increase the sum assured amount after the first 5 years of the policy commencement. If the death is taking place in the first 5 years of the policy, the sum assured amount will be given to the nominee. You have an option to increase the sum assured amount from 6th year to the 10th year of the policy. After completion of the 16th year, the policy benefit will remain constant throughout the remaining years.

Claim Option

There are two claim options available as a death benefit.

  1. One time full lump sum payment to the nominee
  2. Installment of 5/10/15 years

The nominee also has an option to select full death claim amount payable in installment or portion of the claim amount.

What should you look for while buying an insurance plan?

You should go through the below points to make a decision to buy term insurance plan.

Compare Premium : This is one of the main criteria while deciding term insurance plan. Check various schemes available in the market and compare the premium rates. One thing you should know that cheapest term plan doesn’t mean the best one. Rather go for the higher features and flexible terms and condition.

Check the Claim Settlement Ratio : Claim settlement ratio means the number of policies settled by the insurance company in a year. To know more about claim settlement ratio, check this article. Higher the claim settlement ratio, better the company.

There is a recent amendment in section 45 of the Insurance Act. As per this amendment, if you hold the policy for more than 3 consecutive years, the insurance company cannot reject your claim whatsoever.

So after this amendment, the claim settlement ratio loses its importance as one of the main criteria for choosing your insurance company. Non the less, it is not the negligible factor while deciding your insurance company.

Be Frank: You can buy an insurance plan from any of the good company, but do remember that you should declare all the details. don’t hide anything at the time of filling up the policy enrolment form.

Misleading information may hit you back like a boomerang at the time of claim settlement. Justifying at the later stage is much more difficult as compare to declare the right information at first place.

Pros and Cons of the Tech term plan

Pros:

  • Since this is the online insurance plan, there is no agent or intermediate person is required to buy the policy. Hence the premium amount would be cheaper than the other term insurance plans available in the market.
  • The life coverage in this plan is up to 80 years so at later age also you can think of taking this plan.
  • You can choose from the various options for payment of premium. So it is a flexible payment plan which suits your needs. These options are single payment, regular payment, and limited payment plans.
  • Differential/lower premium for women and non smokers.
  • You can increase the sum assured at the later stage which is the distinct feature of this plan. So you can increase the sum assured amount at the later stage. This is a good option for keeping inflation in mind. For example, you have opted to 50 lakh as a sum assured today, but after 10 years you will find that the sum assures is less as the value of that 50 lakh will reduce with time and inflation.

Cons:

  • Being the leading insurance company in India, the premium may be slightly higher as compared to another insurance plan available in the market.

Should you buy LIC Tech Term Plan? – Review

LIC has already launched its e-term plan which is popular amongst the term plan. This is the upgraded version which has cover all the shortcomings of the existing e-term plan.

Policy coverage is up to 80 years: In this term insurance plan, the coverage is up to 80 years. This is in line with the other private players in the market who are offering this feature.

Cheaper Premium: Since LIC Tech Term Plan is an online-only plan available through the portal only, the premium would be cheaper as compared to other existing plans. This is because there is no middle man hence no commission to be paid to anyone.

Special Rate: The LIC tech term plan offers a special premium for women and nonsmokers. So it may be a good option for women and nonsmoker as the will get extra benefit.

Flexible Payment Option: You can pay the premium amount with three different options like one time, regular and limited.

Rider: The plan comes with accidental rider benefit. This is an added advantage which was not there in the existing e-term plan.

Increase Sum Assured: Offered first time by LIC where the sum assured will get increased after the completion of the first five years. From 6th years to the next ten years, the sum assured will be increased at the rate of 10%. After 16th years, the sum assured will remain the same throughout the remaining policy period.

FAQs for LIC Tech Term Insurance Plan

Can I migrate my existing e-term insurance policy to this new LIC tech term plan?

No, you cannot. This plan is unique and cannot cover the existing plan. You are required to close the existing plan and opt for this new plan by applying afresh.

Is this plan better than the private insurance company’s plan?

There are several term insurance plans available in the market which are offered by private insurance companies. LIC is through late entrant in this space, but surely be able to capture good market share because of its strong brand image. The premium in the tech term plan would be slightly higher as compared to other term plans available in the market.

Are there any discount in this plan?

There is a special lower rate for women and nonsmokers under this plan.

Conclusion:

This new tech term plan by LIC has many good and unique features as compared to existing LIC e-term plan. The aim of launching this plan is to compete with private insurance companies who have already launched a term insurance plan with these features.

Overall, this product seems to the BEST product I may have reviewed with no such big negatives in this product to look for. Go ahead and buy it!!

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