best life insurance policy lic – Life insurance is one of the most crucial investments a person can make to secure their family’s financial future. In India, Life Insurance Corporation (LIC) stands as a dominant player, known for its reliability and extensive range of insurance products. This article delves deep into the best LIC life insurance policies available, helping you understand how they work, their features, and who should choose them.
Table of Contents
- Introduction to LIC and Life Insurance
- Types of Life Insurance Policies Offered by LIC
- Top LIC Life Insurance Policies (Overview and Benefits)
- Key Features of LIC Policies
- Eligibility Criteria and How to Choose the Right Policy
- Benefits of Buying Life Insurance from LIC
- How to Apply for an LIC Policy
- Common Questions About LIC Life Insurance Policies
- Conclusion: Choosing the Best LIC Life Insurance Policy
1. Introduction to LIC and Life Insurance
Life insurance is a contract between the policyholder and an insurer where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person or after a set period. It is a key element in a sound financial strategy, providing financial protection and peace of mind.
The Life Insurance Corporation of India (LIC), founded in 1956, is a government-owned insurance and investment corporation. With its wide reach, LIC dominates the Indian life insurance market, and its policies are known for being customer-friendly, secure, and versatile.
Life insurance policies can serve multiple purposes, including:
- Providing financial security for your family after your demise.
- Creating a savings mechanism for future financial needs.
- Covering loans, debts, or large expenses like education and healthcare.
- Offering tax benefits under Section 80C of the Income Tax Act, 1961.
2. Types of Life Insurance Policies Offered by LIC
LIC offers a variety of life insurance policies, each designed to cater to different financial goals, life stages, and risk appetites. The key types of policies include:
a) Term Insurance Plans
- Definition: Pure risk cover plans that provide a death benefit to the nominee if the policyholder dies during the term.
- Who Should Choose This: Best suited for those looking for maximum coverage at a low premium.
- Example: LIC’s Tech Term Plan.
b) Endowment Plans
- Definition: These combine life insurance with savings. The policyholder gets a lump sum after the policy term if they survive.
- Who Should Choose This: Ideal for those who want to save along with life cover.
- Example: LIC’s New Endowment Plan.
c) Money-Back Policies
- Definition: A unique plan where policyholders receive periodic payments during the policy term.
- Who Should Choose This: Suitable for people who want liquidity and financial protection.
- Example: LIC’s New Money Back Plan 20 Years.
d) Whole Life Policies
- Definition: These provide life cover for the entire life of the policyholder, as long as premiums are paid.
- Who Should Choose This: Best for those looking to leave a legacy or ensure lifelong financial security.
- Example: LIC’s Jeevan Umang.
e) ULIP (Unit-Linked Insurance Plans)
- Definition: A combination of investment and insurance. Part of the premium goes into market-linked investments.
- Who Should Choose This: Investors who are comfortable with market risks and want to build wealth.
- Example: LIC’s SIIP Plan.
f) Pension Plans
- Definition: These plans help in building a corpus for retirement, providing regular income post-retirement.
- Who Should Choose This: Ideal for individuals planning for their retirement.
- Example: LIC’s Jeevan Akshay VII.
3. Top LIC Life Insurance Policies: Overview and Benefits
Now that we understand the types of insurance plans LIC offers, let’s look into the top LIC life insurance policies and their features.
1. LIC Tech Term Plan
- Type: Term Insurance
- Features:
- Pure risk cover, high sum assured at low premium.
- Flexible premium payment options (regular and limited).
- Two death benefit options: Level Sum Assured and Increasing Sum Assured.
- Available only through LIC’s online platform.
- Ideal For: Individuals seeking pure risk coverage without additional benefits.
2. LIC New Endowment Plan
- Type: Endowment Plan
- Features:
- Offers both savings and insurance.
- Maturity benefit (sum assured + bonuses) if the policyholder survives the term.
- Death benefit is provided to the nominee if the policyholder passes away.
- Loan facility available against the policy.
- Ideal For: Policyholders looking to save while securing life cover.
3. LIC Jeevan Labh
- Type: Endowment with limited premium
- Features:
- Offers a limited premium payment term (10, 15, or 16 years).
- High bonuses declared by LIC.
- Maturity and death benefits available.
- Suitable for short-term premium payment and long-term benefits.
- Ideal For: Individuals looking for shorter premium terms with long-term benefits.
4. LIC Jeevan Umang
- Type: Whole Life Policy
- Features:
- Provides life coverage up to the age of 100.
- After the premium paying term, the policyholder gets a survival benefit.
- Death benefit to the nominee if the insured passes away.
- Combines life insurance with savings and offers periodic payouts.
- Ideal For: People looking for lifelong coverage and periodic income.
5. LIC Jeevan Amar
- Type: Term Plan
- Features:
- Non-linked, non-participating pure protection plan.
- Flexibility in choosing death benefit options.
- Available for individuals aged 18 to 65.
- Lower premiums for non-smokers and female policyholders.
- Ideal For: People who want flexible, affordable pure risk coverage.
4. Key Features of LIC Policies
When evaluating the best life insurance policies from LIC, here are some key features to consider:
a) Flexible Premium Payment Options
LIC offers flexibility in premium payment frequency, allowing policyholders to choose between monthly, quarterly, half-yearly, or annual premiums. Some plans even allow a single premium option.
b) Loan Facility
Most LIC policies offer a loan facility, allowing policyholders to borrow against their policy in times of financial need.
c) Participation in Profits
Many LIC policies, especially endowment and money-back plans, are participating policies, meaning they are eligible for bonuses based on the corporation’s performance.
d) Tax Benefits
Premiums paid for LIC policies are eligible for tax deductions under Section 80C, while the maturity and death benefits are usually tax-exempt under Section 10(10D).
e) Riders and Add-Ons
LIC offers various riders, such as accidental death and disability benefits, critical illness cover, and waiver of premium, that can enhance the scope of the base policy.
5. Eligibility Criteria and How to Choose the Right Policy
Eligibility
Eligibility criteria vary from plan to plan. Here are some general guidelines:
- Age: Most policies are available to individuals aged 18 to 65. However, some term plans extend coverage up to the age of 75-80.
- Health: Some policies require a medical examination, especially if the sum assured is high.
How to Choose the Right Policy
- Assess Your Needs: Are you looking for pure life cover (term plan), or do you also want to save (endowment plan)? Understanding your needs will help you select the right plan.
- Evaluate Your Financial Situation: If you need liquidity during the policy term, a money-back plan might be suitable. If long-term savings are your goal, an endowment or whole life plan could be better.
- Consider Your Life Stage: Young professionals may opt for term insurance for maximum coverage at a lower cost, while middle-aged individuals may prefer savings-oriented plans like endowment or money-back policies.
6. Benefits of Buying Life Insurance from LIC
a) Trust and Reliability
LIC has been a market leader for decades, with a high claim settlement ratio, making it one of the most trusted names in the insurance sector.
b) Wide Range of Products
LIC offers a wide variety of products catering to different needs, making it easier to find a policy that aligns with individual financial goals.
c) Accessibility
With its extensive network of branches and agents across the country, LIC ensures that insurance services are easily accessible to everyone.
d) Transparent Operations
Being a government-owned corporation, LIC maintains transparency in its operations, offering clear terms and conditions, and ensuring that policyholders understand the benefits of their chosen policies.
7. How to Apply for an LIC Policy
Applying for an LIC policy is straightforward. Here are the steps:
- Consultation with an LIC Agent: You can consult a licensed LIC agent who can help you choose the right policy.
- Online Application: LIC has streamlined its processes, allowing users to purchase select policies like the LIC Tech Term Plan online.
- Documents Needed: You’ll need identification (like Aadhar, PAN), address proof, medical records (for higher sums assured), and income proof.
- Premium Payment: You can pay the premium online or through other methods like ECS, credit card, or at LIC offices.
- Policy Issuance: Once the application is processed and approved, the policy will be issued.
8. Common Questions About LIC Life Insurance Policies
Q1. What happens if I miss a premium payment?
LIC policies usually come with a grace period of 15-30 days, depending on the payment mode. If you fail to pay even during the grace period, the policy might lapse, but you can revive it within a certain timeframe.
Q2. Can I surrender my LIC policy?
Yes, LIC allows policyholders to surrender their policy and receive the surrender value. However, the surrender value is usually lower than the premiums paid, especially in the early years.
Q3. Can I take a loan against my LIC policy?
Yes, most LIC policies offer a loan facility after a certain period, typically after three years. The loan amount depends on the surrender value of the policy.
9. Conclusion: Choosing the Best LIC Life Insurance Policy
Selecting the best life insurance policy depends on your individual financial goals, life stage, and risk tolerance. LIC offers a wide range of policies that cater to different needs, whether you’re looking for pure risk coverage, savings, or a combination of both.
If you’re looking for affordable coverage, LIC’s Tech Term Plan or Jeevan Amar would be a good choice. For long-term savings and protection, consider endowment or money-back plans like the LIC New Endowment Plan or LIC Jeevan Labh. If your goal is to secure your family for life, Jeevan Umang provides lifelong coverage and periodic payouts