What is Basic Sum Assured in LIC?

The Life Insurance Corporation of India offers a whole range of insurance products serving the wide-ranging needs of their customer base. These policies are primarily designed to financially secure the future of the policyholders’ families in their absence. LIC charges a premium payment against which the policyholder can assure a basic sum that is paid to the beneficiary on her/his death.

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Basic Sum Assured in LIC

The basic sum assured under LIC policies is the guaranteed cover amount payable to the assigned beneficiary on the death of the life assured. The amount is pre-defined by the policyholder at the time of policy issuance as per his/her assessment of the future needs of their families. Based on the sum assured, LIC charges a premium amount that is payable by the life assured in full to ensure continuity of policy benefits. 

The basic sum assured is paid on the death of the life assured or on the date of maturity of the policy. The amount payable on the death of the policyholder is called the sum assured on death or the death benefit. On the other hand, the amount payable to the policyholder on surviving till the end of the policy term is termed sum assured on maturity or maturity benefit. Note that the final death and maturity benefit amounts are inclusive of the basic sum assured plus additional returns as per the plan chosen. You can choose to receive these benefits in installments or as a lump sum amount. On the settlement of the basic sum assured and other benefits under a policy by the insurer, the policy stands terminated. 

Every insurance offering by LIC comes with a cap on the minimum amount that can be assured. This is called the minimum basic sum assured. Although most plans do not have a limit on the maximum sum that can be assured, it is advisable to carefully consider your needs before coming to an amount. The minimum and maximum basic sum assured applicable across LIC policies are discussed below. 

Minimum & Maximum Basic Sum Assured of LIC Policies 

LIC Policies Type of Policy Minimum Basic Sum Assured Maximum Basic Sum Assured
LIC Jeevan Labh Endowment Plan Rs. 2 Lakhs No Limit
LIC New Jeevan Anand Endowment Plan Rs. 1 Lakh No Limit
LIC Jeevan Umang Whole-life Rs. 2 Lakhs No Limit
LIC Jeevan Amar Term Plan Rs. 25 Lakhs No Limit
LIC Tech Term Term Plan Rs. 50 Lakhs No Limit
LIC’s SIIP ULIP Age less than 55 years: 10 times of Annualized Premium Age equal / more than 55 years: 7 times of Annualized Premium NA
LIC Nivesh Plus ULIP Option I: 1.25 times of the Single Premium Option II: 10 times of the Single Premium NA
LIC’s New Endowment Plus ULIP 10 times of Annualized Premium NA
LIC’s New Children’s Money Back Plan Child Money-Back Plan Rs. 1 Lakh No Limit
LIC’s Jeevan Tarun Plan Child Plan Rs. 75,000 No Limit
LIC’s Dhan Rekha Money-Back Plan Rs. 2 Lakhs No Limit
LIC’s Bima Shree Money-Back Plan Rs. 10 Lakhs No Limit
LIC’s New Money Back Plan- 20 years Money-Back Plan Rs. 1 Lakh No Limit
LIC’s New Money Back Plan- 25 years Money-Back Plan Rs. 1 Lakh No Limit
LIC’s Jeevan Shiromani Money-Back Plan Rs. 1 Crore No Limit
LIC’s Single Premium Endowment Plan Endowment Plan Rs. 50,000 No Limit
LIC’s New Endowment Plan Endowment Plan Rs. 1 Lakh No Limit
LIC’s New Bima Bachat Endowment Plan Rs. 35,000 - Rs. 70,000 No Limit
LIC’s Aadhaar Stambh Endowment Plan Rs. 75,000 Rs. 3 Lakhs
LIC’s Aadhaar Shila Endowment Plan Rs. 75,000 Rs. 3 Lakhs
LIC’s New Jeevan Lakshya Endowment Plan Rs. 1 Lakh No Limit
LIC’s Bima Jyoti Plan Endowment Plan Rs. 1 Lakh No Limit
LIC’s Bachat Plus Endowment Plan Rs. 1 Lakh No Limit
LIC’s Saral Jeevan Bima Endowment Plan Rs. 5 Lakhs Rs. 25 Lakhs

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

How to Choose the Basic Sum Assured for LIC Policies?

Selecting the basic sum assured is one of the most crucial aspects of life insurance. It is the cover that your family will receive and continue to live on after your death. The basic sum assured has to be sufficient to take care of your dependents at least till the time another person takes over their financial responsibility. 

The HLV calculator helps you come to a decision on the basic sum assured. It is an online tool that lets you estimate your worth to decide on an ideal amount to fulfill your family’s needs. The Human Life Value calculator factors in the rate of inflation, your income, age, current and future expenses, number of dependents, etc. and offers an accurate idea of how much the basic sum assured should be for your family. 

An important point to note here is that the basic sum assured determines the amount of premium you are going to be charged for LIC’s products. Be mindful that the premium charged does not burn a hole in your pockets. It should be sustainable with your current expenses. 

In Conclusion!

The basic sum assured in a LIC policy is the amount that your beneficiary will use to fund their future needs. A decision such as this should be made after careful consideration. Note that LIC offers incentives to policyholders who choose a higher sum in the form of rebates on premiums. Use the HLV calculator to ensure that you have assured the most comprehensive insurance benefits for your family.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
++Returns are 10 years returns of Nifty 100 Index benchmark

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