*Please note that the quotes shown will be from our partners

LIC Adds another Feather to its Hat by Introducing Online Term Plan

The state-owned life insurer LIC, recently launched an online term insurance plan which is slightly expensive than many online pure protection offerings from private companies.

Online term plans have become the first choice of insurance buyers ever since their launch in 2009. The premium of an online term plan is generally low as there are no middlemen involved; so the agent's commission is passed on to the customer. Also, the online buyer is looked upon as a low-risk customer by insurance providers.

LIC’s term plan is offered under two categories – smoker (aggregate) and non-smoker. Under the non-smoker category, the minimum sum assured is Rs 50 lakh and the premium rates are lesser than the aggregate category. In case of the aggregate category the minimum sum assured is Rs 25 lakh. The minimum entry age is 18 years while the maximum entry age is 60 years. The policy tenure can be chosen between 10 and 35 years.

If you are habitual of smoking or use tobacco in other forms, your premium will be approx 25-30% more than that of a non-smoker. But if you hide crucial facts relating to your health, social habits, it is quite likely that your claim will face rejection.

The cover loses its validity when the policyholder reaches 75 years.Whereas at the lower age bracket say 25 years, the premium rates of LIC’s e-term plan are competitive, the rates in the higher age category are higher when compared with the rates provided by private players. The mode of payment of premium is annual only and through online mode.

Though online term plans have become famous, their true potential is yet to be realized. A joint study by Max Life Insurance and Nielsen tells that four out of every five people who begin the process to buy insurance online drop out before completing the purchase. The study does not state the exact reason, but one reason could be that buyers research policies of at least 3-4 insurers before making a purchase decision.

Another reason is that some buyers are skeptical of buying from a private company. While it is a misconception that private companies will not honor claims, the PSU status of LIC will definitely help shed this negative view.

LIC boasts of an excellent claim settlement record — it paid out 97.73% of the claims it received, according to Insurance Regulatory and Development Authority's (IRDA) annual report for 2012-13, this helps LIC to score over its private sector counterparts.

Written By: PolicyBazaar - Updated: 17 September 2021
You May Also Want to Know About
Term Insurance Till 99 Years Of Coverage
Term Insurance Till 99 Years Of Coverage Picking the right policy at the right time is too tricky. If you pick term insurance for a longer period, you will end up paying more premiums. In similar ways, if you pick term insurance for a short peri...
Early Payout on Terminal Illness
Early Payout on Terminal Illness Life insurance helps protect your family to be financially secure and happy in case of an unfortunate demise of the policyholder. If in case a policyholder is diagnosed with a terminal illness, you may be able to...
Term Life insurance Smoker vs non-Smoker
Term Life insurance Smoker vs non-Smoker You must have heard that smoking is injurious to health, but apart from affecting health, do you know that it can also hit your pocked hard when it comes to purchasing term insurance. In Insurance, one of...
Waiver Of Premium | Everything About Term Insurance- Waiver Of Premium
Waiver Of Premium | Everything About Term Insurance- Waiver Of Premium Nowadays, term insurance is a necessity that offers protection to your family in case of an unforeseen event. As we all know, uncertainties can come to your life anytime anyw...
Group Term Life Insurance vs Voluntary Life Insurance
Group Term Life Insurance vs Voluntary Life Insurance Side by Side Comparison helps in making an informed decision Every employer wants their workplace to be safe and healthy for the employees. Employee’s health and his/her family’s financial...
Download the Policybazaar app
to manage all your insurance needs.