A Complete Guide to LIC eTerm Insurance

LIC (Life Insurance Corporation) is one of India's oldest and most trusted insurance companies, serving the nation for over 60 years. They have earned a reputation for reliability and are known for their high claim settlement ratio. LIC offers a range of unique insurance products designed to meet various needs of people across different segments of society. One such product of LIC is LIC e-Term insurance.

If you don’t know much about this plan and want to get insights into it then we have got you covered. In this guide, you will learn everything about the LIC e Term plan online including its features, benefits, eligibility criteria, and much more. 

What is LIC's e-Term Insurance?

LIC e-Term Plan is a special kind of insurance from LIC that is designed to help and support your family in case something happens to you. This plan is all about providing financial help to your loved ones when you're not around.

It's a simple online insurance plan that you can buy directly from LIC's website, without any middlemen. This insurance plan only pays out if the policyholder passes away during the term of the policy. In other words, it's there to give your family a lump sum of money if you're no longer there to take care of them. If you live through the policy term, there's no payout. In essence, the LIC tech term plan is just for peace of mind and protection of you and your family.

NOTE: LIC e-Term insurance is a pure Term Insurance Plan and offers only death benefit and no maturity benefit. 

Features & Benefits of LIC e-Term Insurance

Listed below are the key features of  LIC e Term plan:

• Death Benefit: The Death Benefit is a crucial aspect of the LIC e-Term Plan. If the person who is insured under the policy were to pass away during the chosen policy duration, a pre-decided sum of money, known as the "Sum Assured," is paid to the person or persons nominated by the policyholder. This is meant to provide financial support to the family or beneficiaries in the unfortunate event of the policyholder's death. Once this benefit is paid out, the policy comes to an end.

• Maturity Benefit: The LIC e-Term Plan is categorised as a pure term insurance plan. This means that it solely provides financial protection in the event of the policyholder's death within the policy term. If the policyholder survives the entire policy duration, there is no payout or Maturity Benefit provided.

• Tax Benefits: The LIC e-Term Plan offers tax advantages to policyholders. Premiums paid for this plan are eligible for tax deductions under Section 80C of the Income Tax Act, up to a limit of INR 1.5 lakhs per year. This means that the money you spend on premiums can be subtracted from your taxable income, reducing your overall tax liability.

• Premium Payment: To keep your LIC e-Term Plan active, you need to pay the premiums on an annual basis. These payments are made through online channels, making the process convenient and hassle-free. 

Eligibility Conditions and Restrictions of LIC e Term Policy

The LIC tech Term Plan has certain eligibility conditions and restrictions that are highlighted below:

Additional Conditions for Eligibility:

• The person applying for the LIC insurance plan must be an Indian resident, living in India.

• Non-resident Indians (NRIs) can also apply for the plan, but only if they are currently residing in one of the approved countries.

• The applicant should have a source of income or be currently earning money, and this income needs to be sufficient to cover the yearly insurance premium.

• There are different premium rates for smokers and non-smokers in this plan, meaning that the cost of the policy may vary based on whether you smoke or not.

Other Key Details of LIC e-Term Insurance

The other critical details of LIC e-Term insurance are as follows:

• Online-Only Purchase

LIC's eTerm Plan is available for purchase exclusively online. This means you can buy it directly from LIC's official website. There are no intermediaries involved, such as brokers, agents, or distributors. This online availability makes it easy and convenient for individuals to purchase the plan without the need for a middleman.

• Pure Term Plan

LIC's eTerm Plan is a pure term insurance policy. With this type of policy, you pay a regular premium at specified intervals (typically annually) for a predetermined period. If the insured individual were to pass away during this period, the policy pays a predetermined sum to the nominee. No further premiums are required, and the policy terminates. However, if the insured person survives the entire term, there is no payout at the end of the policy's duration.

• Differential Premiums

LIC's eTerm Plan offers two premium rate categories:

Aggregate Lives: This category is for individuals who choose a sum assured of up to INR 49 lakhs. They pay one premium rate.

Non-Smoker Lives: If the sum assured is above INR 50 lakhs and the applicant is a non-smoker, there's a different premium rate. Whether the applicant qualifies as a non-smoker is determined through a test, specifically the Urinary Cotinine Test.

2lan doesn't provide this option. It is a straightforward plan without any extra add-ons.

• Surrender Benefits

The LIC e Term Policy doesn't accumulate any surrender value, meaning that there are no surrender benefits associated with this plan. If you choose to discontinue the policy, you won't receive any money back.

• No Provision for Loan

Under the e-Term plan, no provision allows you to take a loan against the policy. Some insurance policies offer the option to borrow money against the policy's cash value, but this isn't the case with the LIC e-Term plan.

• Section 45 of the Insurance Act

According to Section 45 of the Insurance Act, after the policy has been active for 2 years, the insurance company cannot reject a death claim except in cases of fraud. In simpler terms, after the policy has been in force for two years, the insurance company cannot refuse to pay the death benefit unless they can prove that there was fraudulent activity involved.

• Grace Period

LIC provides a grace period of 30 days beyond the premium due date. During this period, you can pay your premium without incurring any late fees. If you fail to clear the dues during this grace period, the policy will lapse, which means it will no longer be in force, and you won't have coverage.

• Free Look Period

After purchasing the policy, you have a "Free Look" period of 30 days. During this time, you can reconsider your decision. If you're not satisfied with the terms and conditions of the policy, you have the option to return it to LIC within 30 days. Once any required formalities are completed, you'll receive a refund of the premium paid.

• Exclusions

The LIC tech Term policy has specific exclusions. If the insured individual, whether sane or not, commits suicide within one year of buying or reviving the plan, the policy is considered invalid. In such cases, the Corporation pays only 80% of the premium amount; it does not provide the full death benefit. 

Additionally, this plan does not allow for keyman plans, partnership insurance, or employer-employee plans to be proposed. It is designed for individual coverage, not business or partnership-related insurance needs.

Documents Needed to Buy LIC e Term Plan Online

The following are the documents required to purchase LIC e-Term Policy:

• A duly filled Application Form 

• Medical history details

• Proof of Address, like an Aadhaar Card, Passport, or Voter ID

• Identity Proof, such as an Aadhaar Card, PAN Card, Voter ID, or Passport

• KYC Documents

• Medical and diagnostic tests, if required by LIC, based on factors like the applicant's age, medical history, and sum assured.

Take Away

LIC e-Term insurance serves as a safety net, ensuring that your loved ones are financially supported in your absence.  Also, remember that LIC e-Term insurance is designed solely for individual coverage, making it unsuitable for business-oriented insurance needs.

Frequently Asked Questions (FAQs)

Ques 1. What is the LIC e-Term Plan?

Ans. LIC eTerm Plan is an online term insurance policy offered by LIC. It provides financial protection to your family in case of your demise during the policy term.

Ques 2. What is the key feature of the e-Term Plan?

Ans. The main feature is that it offers a lump-sum payout to your nominee if you pass away during the policy term. However, if you survive the term, there is no maturity benefit.

Ques 3. Are there different premium rates for smokers and non-smokers?

Ans. Yes, the LIC tech Term plan has separate premium rates for smokers and non-smokers. The rate for non-smokers is determined through a test.

Ques 4. Is there a free look period for this plan?

Ans. Yes, you have a 30-day free look period after purchasing the policy. During this time, you can review the terms and return the policy if not satisfied. 

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