LIC’s e-Term plan
The foundation of LIC was laid more than 60 years ago, and till date, it has been a pioneer in the Indian insurance industry. It is not just the oldest insurance company in India but also the most entrusted. With millions of Indians associated with LIC, there are numerous plans that cater to the different needs of people from different strata of society.
As the name suggests, the plan is an ‘online’ plan which is available only through the internet and there is no involvement of intermediaries. This online term assurance policy, is a regular premium, a non-participating plan that offers financial security to the policyholder’s loved ones, in case something happens to him.
Features of LIC’s e-Term Plan
The key features of LIC’s e-Term are as follows:
- Death Benefit
If the life insured dies within the policy tenure, the sum assured would be paid to the nominee as the Death Benefit and the policy would be terminated.
Death Benefit within the policy tenure = Sum Assured
- Maturity Benefit
Since this is a pure term plan, there is no maturity or survival benefit in this plan. Thus, if the life insured outlives the entire policy tenure, nothing would be payable to the policyholder at the end of the policy tenure.
Maturity Benefit = NIL
- Tax Benefits
Similar to other LIC Policies, the premiums paid under LIC’s e-Term are exempted from taxes under Section 80C till INR 1.5 lakhs per annum. The Death Benefit received by the nominee is also tax-free under Section 10 (10D).
- Premium Payment
Payment of premiums has to be done annually and via online payment.
Eligibility and Restrictions in LIC’s e-Term Plan
|Minimum Sum Assured Aggregate Category
|INR 25 lakh
|Minimum Sum Assured Non-Smoker Category
|INR 50 Lakh
|Maximum Sum Assured
|Minimum Age of Entry
|Maximum Age of Entry
|Maximum Cover Ceasing Policy
|Minimum Policy Term
|Maximum Policy Term
|Only own life can be proposed in this plan
- Non-Smoker Rates
The non-smoker rates are applicable to policies with a minimum sum assured of INR 50 lakhs and above and to those who do not smoke or consume tobacco in any form.
Till INR 49 lakhs of sum assured, the aggregate rate would be applicable to everyone.
- The other qualifying criteria are as follows
- The applicant has to be an Indian Resident, residing in India.
- NRI’s are also eligible to buy the plan, on the condition that they are residing in any of the permissible countries only.
- The applicant should have earned income or should be earning. And the income should be enough to cover the annual insurance premium.
- An applicant is not allowed to propose for anyone but himself.
- This is an online plan with no intermediaries and hence has to be purchased and renewed online only.
- There is a differential rate of premium for smokers and non-smokers in this plan.
Important Things to know about LIC’s eTerm Plan
This plan can be bought only online and is not available with brokers, distributors and LIC agents or any other intermediaries.
- Pure Term Plan
This is a conventional term plan, where the insured individual pays a specified premium amount on a regular basis for a pre-decided tenure.
- If he expires during this tenure, the nominee of the plan will receive the death benefit and no further premium will be paid. The policy would thus be terminated.
- If the individual survives the term, meaning he does not die during this period, the policy will expire on the pre-decided date and the individual or the nominee will not receive any money.
- Differential Premium
Under LIC’s e-Term plan, there are 2 brackets of premium rates
- Aggregate Lives
This category is for those who have selected a sum assured up to INR 49 lakhs.
- Non-Smoker Lives
Here, the sum assured is above INR 50 lakh. There is also a different rate of premium for the non-smoker category. Whether the applicant falls under this category or not is investigated through the Urinary Cotinine Test.
- Aggregate Lives
- Grace Period
The time limit that LIC grants to the policyholder over and above the due date of premium payment, without charging any late fee, is called the grace period. Under LIC’s e-Term there is a grace period of 30 days. If the policyholder does not clear his dues during this time, the policy will fail or lapse.
Along with Service Tax, other taxes are applicable as per the Tax Law. Taxes as per the current rates are levied on the premium amount and also extra premium amount if there is any.
There are no Riders that can be attached to the e-Term plan.
- Free Look/Cooling-Off Period
A period of thirty days is given to the applicant to make up his mind about the plan that he has bought. If in case he is not fully satisfied with the terms of the policy he can return the policy to LIC within 30 days of the purchase. The policyholder has to state the reasons of objection. The money is refunded once the formalities are done with.
- Section 45 of the Insurance Act, 1938
As per Section 45 of the Insurance Act, after 2 years of the policy becoming active, it cannot be called in question. In simpler words, the insurance company has 2 years to turn down a death claim if it can prove that the claim was corrupt.
- Surrender Benefits
There is no surrender value accumulated so there are no surrender benefits under the e-Term Plan.
- No Provision of Loan
Under LIC’s e-Term, the policyholder has no provision to take a loan against the plan.
- Under LIC’s e-Term the policy will be considered invalid if the insured individual, whether sane or insane commits suicide within 1 year of purchasing or revival of the plan. The Corporation will not serve any claim other than 80% of the amount paid through premiums if the policy is in force.
- No keyman plan/ Partnership Insurance or Employer-Employee plan can be proposed in this plan.
How to buy LIC’s e-Term Plan?
Buying the plan online is very easy and completely hassle-free. Follow these simple steps:
- Visit the official website to buy LIC’s e-Term www.licindia.in and go to ‘Buy Online’.
- You now need to select and submit the sum assured you wish for and the policy term. The policy term is the number of years you wish the policy to continue. The policy term has to be selected between 10 to 35 years.
- You need to enter your basic details like name, gender, age etc. Please ensure that the details that you submit are completely correct and filled carefully.
- There will the Premium Calculator that would help you in calculating the annual premium that you would be paying. The amount is directly affected by factors like your age, lifestyle habits, term, gender, sum assured etc. The minimum sum assured for Aggregate Category is INR 25 lakhs and for the Non-Smoker Category, the minimum sum assured is INR 50 lakhs.
- Compare the different aspects and select the terms that suit you the most.
- Once you are satisfied, check all the particular again and select the Annual Payment Mode.
- Click “Submit”.
- You would then be asked to make the payment using your Credit/Debit Card or Net-Banking.