LIC India has launched new online term online, named as LIC Tech Term Plan (Plan 854). LIC Term Policy 854 is an online term policy you cannot buy it from an agent, Its available through online only. Which makes the LIC Term Policy 854 cheaper than other policy plans which are sold by agents, in offline mode. If you are not sure about confused Term Policy than read our previous article on what is a term insurance policy or endowment policy.
A) Level Sum Assured option: Life cover (Sum Assured) remains constant during the entire LIC Tech Term Plan policy term.
B) Increasing Sum Assured: Life cover remains constant for the first five years. From the 6th policy year till the end of 15th policy year, your life cover will increase by 10% each year for the next 10 years i.e. the policy cover will double by the end of 15th policy year. From the 16th policy year till the end of the policy term, your life cover remains constant.
For example, if you purchase a life cover of Rs 50 lacs for 20 years, your life cover will be Rs 50 lacs. From the 6th till the end of 15th year, it will increase by Rs 5 lacs each year (10% of 50 lacs). In the 6th year, the cover will be Rs 55 lacs. In the 7th year, the life cover will be Rs 60 lacs and so on. In the 15th policy year, the cover will increase to Rs 1 crore (double of initial cover of Rs 50 lacs). Thereafter, the life cover will remain constant at Rs 1 crore for the policy term.
You do not necessarily have to specify this upfront. You can specify this anytime during the policy term. There is also an option to receive the part amount as a lump sum and the remaining in instalments.
While I have nothing against receiving the death benefit in instalments (income replacement term plans), LIC has not specified the interest rate it will use to calculate those instalment amounts. That leaves you with the interest rate risk (sort of). You are a captive customer. You will have to take whatever they give you. With other income replacement plans, the instalment amounts are specified upfront and the premium is modified accordingly.
With LIC Tech Term, the premium remains the same. The LIC keeps flexibility with itself.
You must be a non-smoker
You have no past medical history
If you are between 18 and 35 years of age and have annual income > 3 lakhs, you can purchase life cover up to 75 lacs without undergoing medicals.
If you are between 36 and 45 years of age and have annual income > 5 lakhs, you can purchase life cover up to Rs 50 lacs without medicals.
There are three kinds of premium rates:
Aggregator rate (no differentiation made between a smoker and a non-smoker)
Non-smoker rate (those who don’t smoke)
Smoker rate
Everything else being same, you can expect the following relationship.
Non-smoker rate > Smoker rate > Aggregator rate
Do note, the aggregator premium rate applies for the non-medical scheme. This means that the premium for smokers and non-smokers will be the same under the non-medical scheme.
Tip: If you are a non-smoker and are eligible for the non-medical scheme, you may still be better off applying under the regular scheme. You may have to pay a lower premium since you can get a non-smoker rate.
If you are a smoker, you can’t apply under Non-medical scheme.
A medical test is mandatory if you are applying for the non-smoker rate. Non-smoker rate is not available under the non-medical scheme.
Premium starts from around Rs. 6,254 (incl. GST) for a 30-year old non-smoker with policy term of 30 years. Rs. 50 Lakhs Level Sum Assured. Regular premium payment.
If you are a smoker, your premium is higher around Rs. 9,912 (incl. GST) for a 30-year old smoker with same configuration as above.
If you are a non-smoker, the premium is higher is non-medical scheme as compared to the regular scheme. Compare quotes 2 and 4. Everything is same except that the applicant chooses the non-medical option under (2). The premium is Rs 9,912 while the premium is Rs 6,254 under regular scheme. If you are a non-smoker, do not opt for the non-medical scheme. The non-medical scheme is not available for smokers. In any case, it is better to go through a medical test before the purchase of the life insurance policy.
You can buy the plan online from the LIC website (https://eterm.licindia.in/onlinePlansIndex/login.do).
Follow steps. You will have to enter your details. You will get an OTP. Enter OTP. Choose the coverage amount and other details and proceed with the application.
LIC Tech Term Plan - Plan 854, Features, Age, Term, Premium details
- Pure Term Plan. No investment angle involved
- The nominee gets the Sum Assured if the policyholder passes away during the policy term. No pay-out if the policyholder survives the policy term.
- Minimum Sum Assured: Rs 50 lacs
- Maximum Sum Assured: No Limit
- Minimum Age at Entry: 18 years
- Maximum Age at Entry: 65 years
- Maximum age at exit: 80 years
- Minimum Policy Term: 10 years
- Maximum Policy Term: 40 years
- Premium Payment Term: Single premium/Limited Premium Payment/Regular Premium
- Differential premium rates for Smokers and Non-smokers
- Option to add Accidental Death Benefit rider
- Only Indian nationals can apply. OCI/PIOs can’t apply.
- NRIs can purchase during their stay in India.
LIC Tech Term Plan - Plan 854's Sum Assured and Increasing Sum Assured
We have two options in sum assured for LIC Tech Term Plan - Plan 854A) Level Sum Assured option: Life cover (Sum Assured) remains constant during the entire LIC Tech Term Plan policy term.
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| Online LIC Term Policy (LIC Tech Term Plan - Plan 854), Features and Premium details - Techzost blog |
B) Increasing Sum Assured: Life cover remains constant for the first five years. From the 6th policy year till the end of 15th policy year, your life cover will increase by 10% each year for the next 10 years i.e. the policy cover will double by the end of 15th policy year. From the 16th policy year till the end of the policy term, your life cover remains constant.
For example, if you purchase a life cover of Rs 50 lacs for 20 years, your life cover will be Rs 50 lacs. From the 6th till the end of 15th year, it will increase by Rs 5 lacs each year (10% of 50 lacs). In the 6th year, the cover will be Rs 55 lacs. In the 7th year, the life cover will be Rs 60 lacs and so on. In the 15th policy year, the cover will increase to Rs 1 crore (double of initial cover of Rs 50 lacs). Thereafter, the life cover will remain constant at Rs 1 crore for the policy term.
How does the nominee receive the death benefit in LIC Tech Term Plan - Plan 854
Term Policies are only paid when the insured person had expired, The death benefit can be paid out as lump sum or in instalments over 5, 10 or 15 years.You do not necessarily have to specify this upfront. You can specify this anytime during the policy term. There is also an option to receive the part amount as a lump sum and the remaining in instalments.
While I have nothing against receiving the death benefit in instalments (income replacement term plans), LIC has not specified the interest rate it will use to calculate those instalment amounts. That leaves you with the interest rate risk (sort of). You are a captive customer. You will have to take whatever they give you. With other income replacement plans, the instalment amounts are specified upfront and the premium is modified accordingly.
With LIC Tech Term, the premium remains the same. The LIC keeps flexibility with itself.
Buy Online LIC Term Policy (LIC Tech Term Plan - Plan 854) without the medical test?
You can buy LIC Tech Term Plan without undergoing medical examination (non-medical scheme) subject to meeting the following conditions.You must be a non-smoker
You have no past medical history
If you are between 18 and 35 years of age and have annual income > 3 lakhs, you can purchase life cover up to 75 lacs without undergoing medicals.
If you are between 36 and 45 years of age and have annual income > 5 lakhs, you can purchase life cover up to Rs 50 lacs without medicals.
There are three kinds of premium rates:
Aggregator rate (no differentiation made between a smoker and a non-smoker)
Non-smoker rate (those who don’t smoke)
Smoker rate
Everything else being same, you can expect the following relationship.
Non-smoker rate > Smoker rate > Aggregator rate
Do note, the aggregator premium rate applies for the non-medical scheme. This means that the premium for smokers and non-smokers will be the same under the non-medical scheme.
Tip: If you are a non-smoker and are eligible for the non-medical scheme, you may still be better off applying under the regular scheme. You may have to pay a lower premium since you can get a non-smoker rate.
If you are a smoker, you can’t apply under Non-medical scheme.
A medical test is mandatory if you are applying for the non-smoker rate. Non-smoker rate is not available under the non-medical scheme.
Online LIC Term Policy (LIC Tech Term Plan - Plan 854) premium amount
The premium will depend on your age, gender, policy term, premium payment term, and Sum Assured. It will also depend on your health status, application (medical/non-medical) and your smoking habits. The premium rates for females are lower than those for males.Premium starts from around Rs. 6,254 (incl. GST) for a 30-year old non-smoker with policy term of 30 years. Rs. 50 Lakhs Level Sum Assured. Regular premium payment.
If you are a smoker, your premium is higher around Rs. 9,912 (incl. GST) for a 30-year old smoker with same configuration as above.
If you are a non-smoker, the premium is higher is non-medical scheme as compared to the regular scheme. Compare quotes 2 and 4. Everything is same except that the applicant chooses the non-medical option under (2). The premium is Rs 9,912 while the premium is Rs 6,254 under regular scheme. If you are a non-smoker, do not opt for the non-medical scheme. The non-medical scheme is not available for smokers. In any case, it is better to go through a medical test before the purchase of the life insurance policy.
How to purchase online LIC Tech Term Plan - Plan 854
LIC Tech Term is a purely online term life insurance plan. Therefore, you cannot buy it from an agent or a distributor.You can buy the plan online from the LIC website (https://eterm.licindia.in/onlinePlansIndex/login.do).
Follow steps. You will have to enter your details. You will get an OTP. Enter OTP. Choose the coverage amount and other details and proceed with the application.
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