LIC of India offers a range of products designed to meet diverse financial needs. For new and existing policyholders, familiarizing themselves with the terminologies of LIC is important in making informed decisions about insurance policies. Therefore, to help you understand the common terms in insurance, here is a list of some commonly used LIC terminologies.
Read moreThe premium is the amount you must pay to obtain LIC insurance coverage. While premiums may vary depending on the type of policy, they generally remain consistent throughout the policy term.
LIC offers premium payment modes, including monthly, quarterly, semi-annual, and annual options, allowing policyholders to choose the one that best suits their financial planning.
This term refers to the period during which the policyholder must pay premiums. Depending on the policy, payment options include single, limited, or regular premium terms.
The policy term is the duration for which the insurer provides coverage and benefits. Most policies allow you to select the term, which can often be extended with whole-life policies up to 99 or 100 years.
The claim amount is the benefit the policyholder or their beneficiaries are entitled to receive. It includes the death benefit in case of a claim and the maturity amount upon policy completion.
Also known as the life cover amount, the death benefit is the sum payable upon the policyholder’s death during the policy term. This amount may include the sum assured, rider benefits, and applicable bonuses.
Exclusions are specific conditions or circumstances under which the policy does not provide coverage. For example, most LIC policies do not cover deaths due to suicide within the first year.
This is the period immediately following the issuance of a policy during which the policyholder can review the policy details. If dissatisfied, the policyholder can return it within this period (usually 30 days for online policies and 15 days for offline policies) and receive a refund of the premium minus any nominal charges.
The grace period is the extra time to pay premiums after the due date. Typically, LIC offers a 15-day grace period for monthly premiums and 30 days for other payment modes, allowing policyholders to avoid policy lapse.
The policy lapses if premiums are not paid even after the grace period, meaning it will no longer provide coverage.
The life assured is the individual covered under the policy. In policies purchased for oneself, the policyholder and life assured are the same person. For child plans, the policyholder is the parent, while the child is the life assured.
This is the amount payable to the life assured upon surviving the policy term. It can be a fixed sum assured or a variable amount based on the type of policy. In LIC policy, it refers to the return of premiums paid throughout the policy term at maturity.
The nominee is the person designated by the policyholder to receive the death benefit in case of the policyholder's death during the policy term.
Some policies offer a paid-up benefit, where if premiums are not paid after a certain period, the policy will continue with a reduced sum assured based on premiums already paid, rather than lapsing.
After a policy lapse, the revival period allows the policyholder to reinstate it by paying the outstanding premiums and any applicable interest. This often requires a new medical assessment.
Riders are benefits that can be added to a base policy for enhanced coverage. Common riders include critical illness riders, accidental death benefit riders, and waiver of premium riders.
The sum assured is the amount the insurer guarantees to pay in case of the policyholder’s death or other specified events. For instance, if a policy has a sum assured of ₹50 lakhs, that amount will be paid to the nominee upon the policyholder’s death.
If the policyholder decides to terminate the policy before its maturity, they can receive the cash value accumulated up to that point, known as the surrender benefit. The policy will terminate after this payment.
Some policies offer periodic survival benefits for outliving specific policy years. This benefit may include any applicable bonuses.
Life insurance policies in India offer tax benefits under sections 80C, 80D, and 10(10D) of the Income Tax Act of 1961. These benefits are subject to changes in tax laws.
The LIC of India offers an array of insurance and investment products to cater to the needs of a diverse range of customers. Let us take a look at the various types of plans offered by Life Insurance Corporation of India:
Enjoy the dual benefit of tax deductions under Section 80C and comprehensive insurance coverage with LIC’s tax-saving policies.
Explore LIC's top-performing plans, which provide the perfect blend of investment growth and insurance protection to achieve your financial aspirations.
Ensure a peaceful and financially stable retirement with LIC plans offering guaranteed returns, life cover, and regular income options.
Protect and plan your child’s education, marriage, and future goals with LIC’s specialized child insurance plans that combine savings and life cover.
LIC offers plans tailored for women, focusing on their unique needs. These plans include savings, life cover, and financial independence to secure a brighter future.
Understanding these terms will help you navigate LIC policies more effectively, ensuring you make the most of your insurance coverage. Whether you’re a new policyholder or looking to review your existing policies, familiarity with these terms will help you navigate the intricacies of LIC products and manage your insurance needs more effectively.
LIC Resources
LIC Online Services |
LIC Investment Plans |
LIC Other Plans |
*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
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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