What is a life insurance term plan. Please explain with example
A life insurance term plan is a type of life insurance policy that provides life coverage for a specified term or period. If the policyholder passes away during the policy term, the sum assured or death benefit is paid to the nominee or beneficiary. However, if the policyholder survives the policy term, there is no maturity or survival benefit payable.
For example, suppose a policyholder purchases a term insurance plan with a sum assured of Rs. 50 lakhs for a policy term of 20 years. If the policyholder passes away during the policy term, the nominee or beneficiary will receive Rs. 50 lakhs as a death benefit. However, if the policyholder survives the policy term, there is no maturity or survival benefit payable.
Term insurance plans are popular among individuals who want to ensure financial security for their dependents in case of their unexpected demise. These plans offer high coverage at a low premium, making them affordable for most individuals. Additionally, the premiums paid towards term insurance plans are eligible for tax benefits under Section 80C of the Income Tax Act, 1961.
It is important to note that term insurance plans do not offer any savings or investment benefits. They are purely designed to provide life coverage for a specified term or period. Therefore, if the policyholder survives the policy term, there is no return on the premiums paid. However, if the policyholder passes away during the policy term, the death benefit can provide financial security to the nominee or beneficiary.
Does lic have any term plans?
Yes, LIC (Life Insurance Corporation of India) does offer term insurance plans. LIC offers a range of term insurance plans that provide life coverage for a specified term or period at an affordable premium. Here are some of the term insurance plans offered by LIC:
LIC e-Term Plan: This is an online term insurance plan that offers high coverage at a low premium. The policy term ranges from 10 to 35 years, and the sum assured can go up to Rs. 1 crore.
LIC Tech Term Plan: This is another online term insurance plan that offers comprehensive life coverage. The policy term ranges from 10 to 40 years, and the sum assured can go up to Rs. 3 crore.
LIC Jeevan Amar Plan: This is a term insurance plan that offers flexibility in choosing the policy term and premium. The policy term ranges from 10 to 40 years, and the sum assured can go up to Rs. 2 crore.
LIC Anmol Jeevan II Plan: This is a basic term insurance plan that offers life coverage for a specified term or period. The policy term ranges from 5 to 25 years, and the sum assured can go up to Rs. 24 lakhs.
LIC Amulya Jeevan II Plan: This is a term insurance plan that offers high coverage at a low premium. The policy term ranges from 5 to 35 years, and the sum assured can go up to Rs. 25 crore.
These term insurance plans offered by LIC provide comprehensive life coverage at an affordable premium. It is important to compare the features, benefits, and premiums of the plans before choosing the one that suits your needs and requirements.
Is term plan better than endowment plan. What’s the difference between the two
The choice between a term plan and an endowment plan depends on your financial goals, needs, and risk appetite. Here are the key differences between the two:
Life Coverage: A term plan offers pure life coverage for a specified term or period, whereas an endowment plan offers both life coverage and savings/investment benefits.
Premium: The premium for a term plan is much lower than an endowment plan. This is because a term plan provides only life coverage and does not offer any savings or investment benefits.
Maturity Benefit: A term plan does not offer any maturity or survival benefit, whereas an endowment plan offers a lump sum payout at the end of the policy term as maturity or survival benefit.
Death Benefit: In case of the policyholder’s demise during the policy term, both term plan and endowment plan offer death benefit. However, the death benefit for an endowment plan is higher than a term plan, as it includes both life coverage and savings/investment benefits.
Flexibility: A term plan offers more flexibility than an endowment plan. It allows you to choose the policy term, sum assured, and premium based on your financial goals and needs. An endowment plan, on the other hand, is less flexible and offers limited options for customization.
Based on the above differences, a term plan may be a better choice if your primary goal is to provide financial security to your dependents in case of your unexpected demise. On the other hand, an endowment plan may be a better choice if you are looking for a savings/investment instrument that also offers life coverage.
Who can buy term plan, what’s the eligibility and what documents are required.
Term insurance plans are designed to provide financial security to your dependents in case of your unexpected demise. Here are the eligibility criteria and documents required to buy a term plan:
Eligibility Criteria:
Age: The minimum age to buy a term plan is usually 18 years, and the maximum age can go up to 65 years depending on the plan.
Income: Some term insurance plans may require you to meet a minimum income threshold to be eligible for the plan.
Medical History: You may be required to disclose your medical history and undergo a medical examination to determine your eligibility for the plan.
Documents Required:
Age Proof: You need to submit a copy of your age proof, which can be a birth certificate, Aadhaar card, passport, or any other government-issued identity card.
Address Proof: You need to submit a copy of your address proof, which can be a utility bill, bank statement, passport, or any other government-issued identity card.
Income Proof: Some term insurance plans may require you to submit your income proof, such as salary slips, income tax returns, or bank statements.
Medical History: You need to disclose your medical history and undergo a medical examination to determine your eligibility for the plan. You may be required to submit medical reports and other related documents.
Nominee Details: You need to provide the details of your nominee, who will receive the death benefit in case of your demise.
It is important to read the policy document carefully and understand the features, benefits, and exclusions of the plan before purchasing it. You can compare the features, premiums, and benefits of different term insurance plans online to choose the one that suits your needs and requirements.
LIC term policy. LIC term insurance policy. LIC life term policy
Life Insurance Corporation of India, commonly known as LIC, is a government-owned insurance company that has been operating for over 60 years. LIC is the largest life insurance company in India, providing a range of life insurance products to individuals and families.
If you are looking for a reliable and trustworthy life insurance provider, LIC is an excellent choice. Here, we’ll discuss why and how to purchase LIC policy.
Neetu Jain
Neetu Jain is a trusted and reliable LIC agent with 15 years of experience and a commerce degree. She has in-depth knowledge of LIC policies and can explain their features, benefits, and exclusions in simple and clear language. Neetu is known for her honesty, promptness of service, and personalized service. She offers competitive premiums, comprehensive service, and is always accessible to her clients. With Neetu as your LIC agent, you can have peace of mind knowing that your insurance needs are in good hands.
