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“Is LIC offer any Term Insurance Plans?” this is the common question which I face during my conversation with my clients when I recommend them to have Term Insurance Plan to cover their Life Risk. This is the situation we are facing due to lack of knowledge sharing and eagerness to sell the products rather than solution. So thought to have a look about the available Term Insurance products in LIC. I thought to speak in this article about LIC’s plans. Reasons are 1) It is India’s oldest Life Insurance Company 2) Major player in Indian Life Insurance industry with it’s huge penetration 3) Faith it generated among the people since long. This is the reason even today also after the private insurers entry into India since 2000, people believe in LIC. But will LIC folks retain this glory? Wait and watch the future 🙂

To proceed further let us look at the history about when LIC started to sell Term Insurance Products. Before the current available term plans Amulya Jeevan and Anamol Jeevan, LIC had term plans called Bima Sandesh and Bima Kiran. Bima Sandesh was the term plan with benefits as Death Benefit-Full Sum Assured payable and Survival Benefit-Return of Premium payable. Bima Kiran was the  improved version of Bima Sandesh,  Death Benefit was-SA+Loyalty Addition and Survival Benefit was-Premium Paid+Loyalty Addition. Currently Bima Sandesh and Bima Kiran not available. Now let us look at the available Term Plans from LIC.

1) Anmol Jeevan-This plan was started on 1-11-2003 with the need of pure term plan which was missing in LIC and this absent was the reason for private insurers to increase their business. This plan was pure term plan rather than any return of premiums or loyalty addition benefit. Main features are as below.

1) Minimum Age at entry-18 Years

2) Maximum Age at entry-55 Years

3) Maximum Maturity Age-65 Years

4) Minimum Term-5 years

5) Maximum Term-25 years

6) Minimum Sum Assured-5 lakh

7) Maximum Sum Assured (Effective from 27-02-2006)-24 lakhs.

Drawbacks are-You cant add any riders to it and as usual compare to private insurers premium is costlier.

2) Amulya Jeevan-This pure term plan was started on 18-02-2008 to cater the insurance need of high earning segment. Major features are as below.

1) Minimum Age at entry-18 Years

2) Maximum Age at entry-60 Years

3) Maximum Maturity Age-70 Years

4) Minimum Term-5 years

5) Maximum Term-35 years

6) Minimum Sum Assured-25 lakh

7) Maximum Sum Assured-No upper limit.

Positive point being age factor- entry and maximum maturity age which is increased compare to Anmol Jeevan. But drawbacks being same-No option to add riders and costly to private insurers.

3) Two Year Temporary Assurance Policy-This plan is suitable for insuring non-insurance minded class of lives who require risk cover for a short period of 2 years or less. Features of this plan are as below.

1) Minimum Age at entry-18 Years

2) Maximum Age at entry-60 Years

3) Maximum Maturity Age-62 Years

4) Minimum Sum Assured-3 lakh

5) Maximum Sum Assured-1 Crore.

6) Modes of Premium payment-Single only

7) Terms Allowed-6/12/18/24 months.

Drawbacks- Insurance for two years??  Proposer required to pay the medical examination fees.

4) The Convertible Term Assurance Policy-LIC shows this plan too as “Term Assurance Plans”. But I dont feel it as a pure term plan as the major aim of this plan is convert in future insured person into investing either in Whole Life plans or Endowment Plans. This plan rather suitable to people who started their carrier recently and unable to pay high premiums for whole life and endowment plans. By taking this plan they can cover their life risk now with lesser premium payment but later they need to convert this plan into Whole Life or Endowment Plans. After the conversion, premium will also raise. Hence this plan is not suitable to them who is looking for pure term plans.

These are the four plans which currently LIC offers. But LIC need to change it’s view on available Term Plans which lacks in competition comparison to-Price, Service, Agents activity to push for these plans and finally online term plans.

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