LIC Plans for 5 Years

LIC Plans for 5 years are designed for those who wish to secure the future of their loved ones without paying heavy premiums. These plans come with a five-year policy term of 5 years and offer short-term protection to cater to your short-term goals and help you plan your future better. 

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Why Consider LIC Plans for 5 Years?

LIC of India offers several 5-year policies specifically designed for insurance buyers who prefer a short-term insurance plan. The LIC 5-year policy provides sufficient time to fulfil many financial goals. It's long enough to implement a strategic financial plan yet short enough to give enough financial results. Whether you want to save for a down payment on a home, fund your child's education, or simply grow your wealth, LIC offers a range of plans to help you meet these objectives. Let's delve into some top LIC plans suitable for a 5-year horizon.

LIC plans for 5 years offer customers a wide range of benefits. In addition, one of the significant advantages of LIC policy for 5 years is that these policies can convert it to a longer tenure if required. In detail, Let’s look at some of the best LIC policies for 5 years.

Best LIC Plans for 5 years

Below are some of the best LIC plans that offer short-term protection for 5 years and help you save for your future goals.

  1. LIC Term Plans

    LIC Term Assurance Plan is a life insurance protection plan that provides financial protection to the insured's family at an affordable premium rate. Under such a plan, a death benefit is offered to the beneficiary of the policy in the event of the unfortunate death of the insured person during the tenure of the policy. As a pure-term protection plan, the policy offers no maturity benefit.
    LIC Term Assurance offers the following plan that starts from the policy tenure of 5 years.

    LIC Saral Jeevan Bima offers short-term risk coverage for your life. If you die within the policy tenure, the plan will offer the sum assured on death to your family members. This way, you can rest assured that your family won’t have to struggle for finances in your absence.

    Eligibility Criteria Minimum Maximum
    Sum Assured Amount Rs.5,00,000 Rs.25,00,000
    Entry Age 18 years 65 years
    Maturity Age - 70 years
    Policy Tenure 5 years 40 years
  2. LIC Endowment Plans

    These are plans that offer two important benefits together - Savings and Insurance. You pay a premium against your desired cover amount (sum assured). If you survive the policy term, you get the entire sum assured as guaranteed income. If you die within the policy term, your family benefits from the sum assured on death.

    This plan helps you create an income stream after the policy has matured. In the event of your death within the policy term, the plan’s death benefit amount will be offered to the nominee you assign.
    Note that this LIC plan for 5 years is only applicable under the options - Single Premium Level Income Benefit and Single Premium enhanced cover with Level Income Benefit.

    Eligibility Criteria Minimum Maximum
    Entry Age 3 years 65 years
    Single premium Rs.2 lakh No limit
    Policy term 5 years, 10 years, or 15 years
    Sum Assured on Death Single Premium Level Income Benefit – Rs. 2.5 Lakhs Single Premium enhanced cover with Level Income Benefit – Rs. 22 Lakhs
  3. LIC Pension Plans

    Retirement or pension plans are ideal for insurance seekers planning a secured future after retirement. With the help of an LIC Pension Plan, one can create a financial cushion in the long term to have a regular flow of income after retirement.
    There are two different plan options offered under the LIC Pension Plan. Let’s look at these LIC plans for 5 years in detail.

    This is a deferred annuity plan, meaning that you start receiving the pension amount after a certain period of time, called the deferment period. You get to fix the pension amount at the time of purchase. The income will start flowing once the deferment period ends and continue until your death. On your death, annuity payouts stop, and your family is given the death benefit amount.

    Eligibility Criteria Minimum Maximum
    Entry Age 30 years 79 years
    Deferment period 1 year 12 years
    Annual annuity amount Rs. 12,000

    LIC Jeevan Akshay VII is an immediate annuity plan that can be bought by paying a lump-sum amount in one go. Under this plan, the policyholder pays the annuity monthly, quarterly, half-yearly, and yearly. Let’s take a look at the eligibility criteria of the policy.

    Eligibility Criteria Minimum Maximum
    Entry Age 30 years 85 years
    Purchase Cost Rs.1 lakh (offline) No limit
    Payment Mode Monthly, quarterly, half-yearly, yearly

Benefits of LIC 5-year Policy

  • Life Cover: LIC policies provide life coverage, ensuring financial protection for your family in case of your untimely demise during the policy term. Knowing that your loved ones will be financially secure even in your absence can give you peace of mind.

  • Savings and Investment: Many LIC policies offer a combination of insurance and investment components. By investing in these policies, you can build a corpus over the 5-year period, which can be useful for meeting various financial goals such as education, marriage, or retirement.

  • Guaranteed Returns: Some LIC policies offer guaranteed returns, ensuring you receive a predetermined amount at maturity or in case of death. This can stabilise your investment portfolio, especially during volatile market conditions.

  • Loan Facility: LIC policies often offer the option to avail of loans against the policy's surrender value. This can be beneficial if you need liquidity for emergencies or other financial needs during the 5 years.

  • Riders and Additional Benefits: LIC policies may offer various riders and additional benefits such as critical illness coverage, accidental death benefits, disability riders, etc. These can be added to your base policy for enhanced protection.

How to Choose the Right LIC Plan for Your 5-Year Goal?

Selecting the right LIC plan for your 5-year financial goal requires careful consideration. Here are the steps to guide you:

  • Identify Your Goal: Clearly define your financial goal for the next 5 years, whether buying a car, funding a vacation, or building an emergency fund.

  • Assess Your Budget: Determine how much you can comfortably allocate towards premiums. LIC offers plans with varying premium amounts to suit different budgets.

  • Policy Term: Choose a plan with a 5-year policy term to match your goal timeline.

  • Coverage and Returns: Compare the insurance coverage and potential returns of different LIC plans to find one that aligns with your financial objectives.

  • Riders and Add-ons: Consider any optional riders or add-ons that enhance the plan's coverage to meet your needs.

Wrapping it Up!

Short-term financial goals are an essential part of your overall financial plan. LIC plans for 5 years provide a perfect way to secure these goals while enjoying life insurance coverage benefits. However, per one’s choice, the insured can convert these plans into long-term ones. Not only can one secure the future of their loved ones, but they can also enjoy affordable premiums with short-term LIC policies.

FAQs

  • Q: Can I extend or renew my LIC policy after the 5-year term?

    Ans: It depends on the specific policy you choose. Some policies may offer the option to renew or extend the coverage beyond the initial term, while others may not. It's important to review the terms and conditions of the policy to understand the renewal options available.
  • Q: Are the premiums for 5-year policies higher compared to longer-term policies?

    Ans: Generally, premiums for shorter-term policies tend to be lower than longer-term ones. However, the premium amount will depend on various factors such as the sum assured, age, policy type, and individual risk profile.
  • Q: Can I avail of loan facilities against my short-term LIC policy?

    Ans: Loan facilities may be available against certain short-term LIC policies. The loan amount and conditions may vary depending on the specific policy's terms and provisions.
  • Q: Can I surrender my policy before the completion of the 5-year term?

    Ans: Most LIC policies have a surrender value that allows policyholders to surrender their policies before the completion of the policy term. However, surrendering a policy may have financial implications, such as a reduced surrender value or loss of benefits.
  • Q: What happens if I miss paying premiums during the 5-year policy term?

    Ans: If you fail to pay the premiums within the grace period mentioned in the policy, the policy may lapse or become void. In such cases, you may lose the insurance coverage and any associated benefits. Ensuring timely premium payments is essential to keep the policy in force.
  • Q: What is the LIC money-back policy after 5 years?

    Ans: The LIC Money Back Policy after 5 years is a life insurance plan offered by the Life Insurance Corporation of India. After the initial 5-year period, policyholders receive a percentage of the sum assured at regular intervals as survival benefits. These payouts continue until the end of the policy term. In case the policyholder's demise during the term, the full sum assured is paid to the nominee. This plan provides life cover and periodic payouts, offering financial security and liquidity at predefined intervals, making it a popular choice for individuals seeking insurance and investment benefits.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Tax benefit are for Investments made up to Rs.2.5 L/ yr and are subject to change as per tax laws.
+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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