SBI Life Term Insurance Vs LIC Term Insurance

A term insurance policy provides life cover for a specific "term" and pays a certain amount as a death benefit in the case of the policyholder’s untimely demise. 

Who should buy a term insurance plan? 

Anyone who wants to ensure the financial stability and protection of their family in case of unforeseen circumstances can opt for a term insurance plan, especially if you are the sole breadwinner. 

Sometimes, choosing the best term insurance can be a tough decision. Because there are so many factors that you have to consider before finally buying one. 

Two of the most popular term insurance options available in India are SBI Life and LIC Term Insurance. Both of these insurers have their own perks; in this blog, we will compare SBI Life vs LIC term insurance to find which one is better! 

About SBI Life Insurance

SBI Life was established through a partnership between the State Bank of India and BNP Paribas Cardif, a French finance company, in 2001. Up to 31st March 2024, SBI Life has paid over ₹2,20,490 crores claims, has 1,040 branches across India, and serves 8,19,05,672 policyholders. In terms of claim performance, SBI Life Insurance has a claim settlement rate of 97.05%(1) for FY 2022-23. 

SBI Life offers different types of insurance plans, such as life insurance, term insurance, money-back policies, whole life insurance, unit-linked plans, endowment policies, and retirement plans. The company also provides many add-ons and riders to increase policy coverage. 

Features and Benefits of SBI Life Insurance

Now, let’s discuss the features and benefits of the SBI Life Insurance.

• Flexible-Premium Payment Options

SBI Life offers flexible premium payment options to suitably serve your financial abilities. You can pay your premiums annually, semi-annually, quarterly, or monthly. This insurance makes it easier to manage your budget and keep your coverage intact at the same time.

• Attractive Reversionary & Terminal Bonuses

A key feature of SBI Life's plans is the attractive reversionary and terminal bonuses, which indicates that the company has strong financial value and is committed to providing its customers with good returns. These bonuses are declared annually by the company and are added to the sum assured, which ultimately increases your total payout and overall coverage.

• Unique Benefits 

Some of the SBI Life term insurance plans come with unique benefits.  

For instance, SBI Life-eShield Next provides a Future Proofing & Better Half Benefit option. 

In Future Proofing, the company gives the insured the choice to increase the “absolute sum assured on death” during the policy term according to their personal and financial situations during certain life stages. The best part is that no medical underwriting is required for the acceptance of this benefit. 

With the Better Half Benefit, the policyholder's spouse gets additional benefits along with a death benefit in case of the policyholder's demise.  

• Tax Benefits

SBI Life insurance plans also offer tax deductions and exemptions. Under Section 80C of the Income Tax Act, you can get a deduction of up to ₹1.5 lakhs. The death benefit and maturity amount are also tax-free. 

• Rider Benefits

SBI Life offers riders such as 

• Accidental Death Benefit, 
• Accidental Disability Benefit, 
• Critical Illness, and 
• Waiver of Premium 

You can add these riders to your base policy and enhance the policy coverage. 

• Customer Representative At Your Service 24*7

SBI Life is specifically known for its excellent customer service. They have a dedicated support team to assist you throughout the insurance process. Whether you need help selecting the right policy or ensuring the claims are settled quickly, they are there to support you every step of the way. This commitment to customer satisfaction is one of the main reasons why so many policyholders trust SBI Life for their insurance needs. 

About LIC Term Insurance

Launched on September 1, 1956, by the Government of India, LIC is one of India's most popular and affordable insurance providers that has been trusted for more than 67 years. 

With a 71.76% market share, LIC alone settled over 9.22 lakh claims during 2022-23, with a claim settlement ratio of 98.52% (2). 

They have issued more than 2.04 crore policies and provided policyholders with benefits such as high sum assured, flexible premiums, maturity benefits, online discounts, customizable coverage, riders, options for premium payment terms, non-smoker discounts, and different plan options to choose from. 

Features and Benefits of LIC Term Insurance

Let’s talk about the features and benefits of LIC Term Insurance Plans.

• Affordable Premiums

Compared to other insurers, LIC term insurance plans offer extensive life coverage at affordable premium rates. The plans have been designed in a way so that everyone can afford a term insurance plan and ensure financial security for their loved ones. 

• Multiple Premium Payment Modes

LIC term insurance plans offer different premium payment modes. You can choose to pay quarterly, monthly, half-yearly, or yearly. 

• High Claim Settlement Ratio

LIC had a high claim settlement ratio of 98.52% in FY 2022-23. This high ratio shows the company's commitment to earning and maintaining customers' trust and relying on them for quick claim settlements.

• Additional Coverage

LIC term insurance plans give policyholders the benefit of adding riders for extra coverage, including critical illness cover, permanent disability, and accidental death cover. These can be added by paying an additional premium.

• Tax Benefits and Exemptions

The premiums paid towards LIC term plans and riders are considered tax-free u/s 80C and 10(10D) of the IT Act, 1961.

Head To Head Comparison Between SBI Life Term Insurance Vs LIC Term Insurance

Conclusion

In the debate of SBI Life Term Insurance Vs LIC Term Insurance, who wins? 

The answer depends on your individual needs and preferences. 

LIC is backed by the Government of India and is renowned for its high claim settlement ratio and affordability. SBI Life, on the other hand, offers 6 Term Insurance plans and unique benefits which you might not find in LIC. 

In short, both insurers offer robust and reliable term insurance plans with unique features and benefits. So, the best choice depends on what you prioritize most in a term insurance plan.

Consider your specific requirements, budget, and the unique offerings of both companies to make the right decision that best secures your family's future.

If you need expert help, don’t mind calling us at +91-7551196989! 

Frequently Asked Questions (FAQs)

Ques 1. Which one is better: life insurance or term insurance?

Ans. Both term insurance and life insurance serve different purposes.
Term insurance covers a specific term, such as 10, 20, or 30 years and has lower premiums. On the other hand, life insurance offers lifelong protection as long as premiums are paid and they are a good investment option as well. Their accumulated value increases over time which you can withdraw periodically according to your needs. 

If you want affordable, temporary coverage, choose term insurance. 

If you want lifelong protection with potential cash-value benefits, choose life insurance. 

Ques 2. Is a loan facility available under LIC term assurance plans? 

Ans. No, a loan facility is not available under LIC term assurance plans. 

Ques 3. Which insurer has a higher claim settlement ratio, SBI Life or LIC?

Ans. LIC has a higher claim settlement ratio, with a ratio of 98.52%, than SBI, with 97.05% for FY 2022-23. 

Ques 4. Which insurer premiums are affordable, SBI Life or LIC?

Ans. LIC Term Insurance plans are known for their affordable premiums while providing high coverage. 

Ques 5. What are the disadvantages of term life insurance?

Ans. One disadvantage of term life insurance is that it does not cover your entire lifetime. If you outlive the term length, the coverage will end, and you won't receive any benefits of the policy till you renew it.