5 crore life insurance policy lic : In today’s unpredictable world, securing the financial future of your loved ones is a top priority. A life insurance policy, especially one with a high sum assured like ₹5 crore, ensures peace of mind by providing financial protection to your family in case of unfortunate events. LIC, the largest life insurer in India, offers various policies designed to cater to high-net-worth individuals (HNIs) who seek substantial coverage, such as the ₹5 crore life insurance plans. This article delves into LIC’s offerings, highlighting their benefits, features, and suitability for different financial situations.
1. Overview of LIC’s Life Insurance Policies for High Sum Assured
LIC offers several policies that can provide a sum assured of ₹5 crore, particularly for individuals with large families, significant financial obligations, or those looking for estate planning solutions. The two primary categories of LIC life insurance that cater to such high coverage are:
- Term Insurance: Term insurance policies like LIC’s Tech-Term Plan are specifically designed for individuals seeking pure protection with high coverage amounts. These plans provide a substantial death benefit at an affordable premium, making them ideal for a ₹5 crore sum assured.
- Whole Life Policies: Whole life policies ensure coverage for the insured’s entire life. While these may come at a higher premium, they offer lifelong protection and can include maturity benefits, making them an excellent choice for estate planning.
2. LIC Tech-Term Plan: Pure Protection at High Coverage
- Introduction to the Tech-Term Plan: LIC’s Tech-Term Plan is a non-participating online term insurance policy that offers pure life cover. For a sum assured of ₹5 crore, the policyholder pays a fixed premium over a specified period, and the beneficiaries receive the sum upon the insured’s death
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- Features:
- Online Availability: Being an online plan, it eliminates the need for intermediaries, resulting in lower premiums.
- Policy Tenure and Flexibility: The policy tenure ranges from 10 to 40 years, making it customizable based on the policyholder’s age and needs.
- Death Benefit: For a ₹5 crore sum assured, the death benefit is paid to the nominee as a lump sum upon the policyholder’s demise.
- Premium Calculation for ₹5 Crore Cover: The premium for a ₹5 crore cover varies based on age, smoking habits, and policy tenure. For a healthy 35-year-old non-smoker, the premium can range from ₹30,000 to ₹45,000 annually
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3. LIC Jeevan Umang: High Coverage with Regular Payouts
- Introduction: LIC’s Jeevan Umang is a popular whole-life policy that combines protection with regular income. This policy is ideal for individuals who want a mix of high coverage and savings, offering a ₹5 crore sum assured along with survival benefits.
- Key Features:
- Survival Benefits: After the premium paying term, the policyholder receives an annual survival benefit equivalent to 8% of the sum assured.
- Lifelong Coverage: The policy provides coverage until the age of 100, ensuring a death benefit to the nominee if the insured passes away during the policy term.
- Maturity Benefit: If the policyholder survives the policy term (up to age 100), the full sum assured, along with bonuses, is paid upon maturity
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- Suitability for ₹5 Crore Coverage: For those opting for the ₹5 crore coverage, the Jeevan Umang plan ensures that the policyholder enjoys regular income while also guaranteeing a significant payout to the family in case of death.
4. Eligibility and Documentation for a ₹5 Crore LIC Policy
- Age Limit: For high-value life insurance policies like ₹5 crore, the entry age typically ranges from 18 to 65 years, depending on the policy type.
- Medical Examination: Given the high sum assured, LIC requires a comprehensive medical examination. The health condition of the policyholder plays a crucial role in determining the premiums and whether the policy is granted.
- Income Proof: Since ₹5 crore is a significant sum, LIC requires proof of income to ensure the individual can sustain the premium payments. This could include salary slips, IT returns, and financial statements for HNIs
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5. Premium Payment Options and Riders
- Premium Payment Modes: LIC offers flexibility in premium payment, allowing monthly, quarterly, half-yearly, or annual premium modes. This flexibility ensures that policyholders can manage their cash flow while maintaining the policy.
- Riders for Enhanced Coverage: LIC offers several riders that can enhance the basic coverage:
- Accidental Death and Disability Benefit Rider: For an additional premium, this rider provides an extra payout in case of accidental death or disability.
- Critical Illness Rider: Provides financial protection if the policyholder is diagnosed with a critical illness, ensuring access to funds for medical treatment
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6. Tax Benefits of a ₹5 Crore Life Insurance Policy
- Premium Tax Deduction: Under Section 80C of the Income Tax Act, policyholders can claim deductions of up to ₹1.5 lakh on the premiums paid for life insurance policies.
- Death Benefit Exemption: The death benefit paid to the nominee is fully exempt from taxes under Section 10(10D), making a ₹5 crore life insurance policy an attractive proposition for high-net-worth individuals looking to safeguard their families
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- Estate Planning Advantages: For HNIs, a ₹5 crore life insurance policy can be an effective tool for estate planning, ensuring that beneficiaries receive a tax-free lump sum that can be used to settle debts, taxes, or other financial obligations
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7. Comparing LIC’s ₹5 Crore Plan with Competitors
- Premium Comparison: While LIC’s Tech-Term plan is competitive in pricing, there are other insurers offering term plans with similar benefits. For example, HDFC Life and ICICI Prudential also offer ₹5 crore coverage, often at slightly lower premiums.
- Customer Trust and Claim Settlement: LIC’s claim settlement ratio consistently ranks among the highest in the industry, which is a crucial factor for individuals seeking high coverage policies. LIC’s established brand and government backing offer added peace of mind
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Conclusion: A ₹5 crore life insurance policy from LIC can be a critical part of a financial strategy for anyone with substantial financial responsibilities or estate planning needs. With a range of policies, including the affordable Tech-Term Plan and the savings-oriented Jeevan Umang, LIC provides diverse options to suit different financial goals. Whether you are seeking pure protection or a policy that offers savings and regular income, LIC’s policies can provide the peace of mind that comes from knowing your family’s future is secure.