Formed following the Life Insurance of India Act, 1956, 245 insurance companies in India merged to become Life Insurance Corporation. Currently, with assets in excess of $350 billion, Life Insurance Corporation is the largest general insurer in the country. Life Insurance Corporation offers a plethora of policies from whole life insurance to endowment plans, child plans, and so on. For citizens that wish for a life cover at an affordable premium, they can opt for the Life Insurance Corporation term insurance plan.
The LIC term insurance plan offers the death benefit payout only if the policyholder dies while the policy is still in force and it does not come with any maturity benefits. However, LIC term insurance plan comes with a host of other benefits, some of which are mentioned below.
Reasons to opt for an LIC term insurance plan
Listed below are the perks of purchasing an LIC term insurance plan:
Premiums are affordable
The biggest advantage of the LIC term insurance plan is that the premiums are priced reasonably. For example, for a cover of Rs.1 crore, the premium is priced at a little over than Rs.7,000. As with term insurance plans offered by most insurers, policyholders can get a high sum assured at a low premium cost.
Offers financial stability
LIC term insurance policyholders get to choose the tenure of the policy. However, if the policyholder dies during the term of the policy, then the high life insurance coverage will be extended to his/her family or legal heirs which will in turn offer financial stability for a number of years. In addition, if the policyholder had any debts or pending loan dues, then the term insurance policy will take care of the debts of the policyholder and nullify any financial stress that the family could face.
LIC has one of the best claim settlement ratios
When choosing a life insurer to purchase a policy from, knowing the claim settlement ratio of the company is vital and Life Insurance Company has one of the highest claim settlement ratios in the market. In fact, as per the latest Insurance Regulatory and Development Authority of India (IRDAI) guidelines, after 2-3 years of holding an insurance policy, when it comes to claim settlements, the insured person has the upper hand and could take the insurer to task for not settling a claim for whatever reason.
Policyholders of the LIC term insurance plan have the option of modifying their plan during the tenure of the policy and in addition, they can choose to pay their premiums either online or offline.
In order to enhance one’s financial protection, policyholders have the option of purchasing additional riders offered by Life Insurance Corporation along with the term insurance plan.
Lastly, for the premiums paid to purchase the LIC term insurance plan or to renew the plan, policyholders can avail tax deductions under Section 80C of the Income Tax Act, 1961, up to a maximum of Rs.1.5 lakh in a financial year.
Financial Analyst at Farmer’s Insurance with over 25 years of experience in the Financial Industry