LIC Tech Term Plan – Features, Benefits, Eligibility & How To Buy

For more than six decades now, LIC, Life Insurance Corporation of India has been a dominant member of the Indian insurance market. One of the many term assurance plans launched by this veteran company is LIC Tech-Term Plan. Being a term plan it offers coverage for life, this means, in case the insured individual passes away during the tenure of the policy, the appointed nominee would receive a death benefit from LIC in the form of the sum assured. There is no maturity benefit offered by this plan.

LIC Tech Term Plan is an online term insurance plan, with 2 death benefit options: Level sum assured and Increasing sum assured. Under the first option, that is Level Sum Assured, the sum assured remains the same until the end of the policy. So, if a policyholder purchases LIC Tech Term for INR 50 lakhs, this amount does not change throughout the policy term. However, in case he opts for an Increasing sum insured, the amount will keep rising as per the terms of the policy. Being a term life insurance policy, there is no maturity benefit in this plan.

Eligibility criteria of LIC TECH TERM

Let us take a look at the eligibility criteria of Tech Term LIC: 

Features of LIC TECH TERM

Here are the key benefits of Tech Term LIC: 

1. There are 2 death benefit options to choose from:
   1. Level Sum Assured where the sum assured remains constant throughout the policy tenure
   2. Increasing Sum Assured where after a period of 5 years of continuous coverage, the sum assured increases by 10% per year for the next 10 years
2. The death benefit can also be received as a lump sum amount or in instalments, as per the option chosen by the policyholder at the time of policy purchase
3. There is a regular as well as a limited premium option in this plan
4. Discounts available with this plan:
   1. For Women policyholders 
   2. For High Sum Assured
   3. For a healthy lifestyle with separate premium rates for Smokers and Non-Smokers. 
5. An additional benefit of Accident Benefit Rider is available

Death benefit and death benefit in instalments under LIC TECH TERM

1. Death Benefit
   The death benefit is payable in the event of the death of the insured member during the term of an active policy. In case of policies with Regular and Limited Premium payment, the Sum Assured is the highest of:
   1. Seven times the annual premium
   2. 105% of all the premiums that have been paid till the time of death OR
   3. Absolute amount assured that is to be paid on death

In the case of a single premium policy, the Sum Assured is the highest of:

1. 25% of all the Single Premium that has been paid 
2. Absolute amount assured 

The Absolute Assured Amount would be dependent on the chosen Death Benefit Option, at the time of policy purchase:

1. Level Sum Assured
   The amount would be equal to the Basic Sum Assured, which remains constant during the policy tenure
2. Increasing Sum Assured
   The amount would be equal to the Basic Sum Assured till the completion of the 5th year of the policy. After that, the amount would increase by 10% of the Basic Sum Assured every year, till the 15th policy year that is the time when the Basic Sum Assured doubles.

So let us understand the difference between the 2 types of Sum Assured with an example:

Suppose, Manish Chandra is a non-smoking 30-year-old man. He purchased LIC Tech Term Plan with INR 60 lakhs as the sum insured for a tenure of 40 years. Sadly, Manish dies due to a heart attack. Let us take a look at the death benefit received by his nominee under the 2 different options.

In case of a Level Sum Assured, the nominee will receive a death benefit of INR 60 lakhs, if Manish dies anytime during the 40 years term of the policy.

Whereas, if Increasing Sum Assured has been opted for, the death benefit will be as follows:

1. Within first 5 years of policy purchase: INR 60 lakhs
2. In the 6th year of the policy, as the sum assured rises by 10%, the death benefit would be 66 lakhs. 

3. In case Manish passes away in the 10th year, the death benefit would increase by 50% and be INR 90 lakhs. 
4. In the 15th year, the death benefit would be doubled that is INR 1.2 crores
5. After the 15th policy year, the sum assured will remain constant at INR 1.2 crores till the end of the plan.

2. Death Benefit in Instalments
   At the time of policy purchase, if the policyholder wants he can opt that the nominee receives the death benefit in installments and not as a lump sum. The death benefit can be paid out in installments over a period of 5 or 10 or 15 years. The installments are to be paid in advance at regular intervals that can be monthly, quarterly, half-yearly, or yearly.
3. Maturity Benefit
   Being a term insurance plan, there is no maturity benefit under the Tech-Term LIC. If the insured individual outlives the policy tenure, nothing would be payable.
4. Tax Benefit
   Tech Term LIC also offers you tax benefits. The premium that you pay towards the plan is exempted under Section 80C. The death benefit is also tax exempted under section 10 (10D) of the Income Tax Act, 1961.
5. Payout Benefit
   While purchasing the plan, the policyholder has the option to opt for either of the two death benefit options:
   1. Lump-Sum OR 
   2. Installments

Key features of LIC TECH TERM:

1. Grace Period
   LIC Tech-Term comes with a grace period of 30 days. This period is allowed to the policyholder to make the payment of his half-yearly or yearly premiums and starts from the date of the first unpaid premium. In case the premium is not paid by the policyholder during these 30 days, the policy would expire. All the assured benefits will cease and nothing would be payable.
2. Revival of the Policy
   When the policy lapses due to non-payment of premium, there is still a possibility of reviving it. However, it has to be done within a period of 5 years from the date of the unpaid premium. The revival is allowed only under the terms and conditions of the company.
3. Premiums
   The policyholder can opt to pay premiums on a Regular or a LImited Period or a Single Premium basis. With LIC Tech-Term online payments can also be made.
   In Regular and Limited Premium payments can be made
   1. Yearly OR
   2. Half-Yearly

Premium details for LIC Tech Term

Let us take a look at the illustrative premiums for a non-smoker male, with a Basic Sum Assured of INR 1 crore. The premiums do not include GST.

*These premiums are indicative only and subject to change at any point of time.

Additional/ optional rider benefits for LIC’s TECH TERM

By making an extra payment, the policyholder can also opt for LIC Accident Benefit Rider. Under this rider, if the insured individual dies in an accident, the nominee receives the Accidental Benefit Rider Sum Assured as a lump sum, over and above the death benefit.

For example, there is a person who has purchased LIC Tech Term online, with a basic sum assured of INR 15 lakhs, and LIC Accident Benefit Rider with a sum assured INR 5 lakhs. In case he dies in a motor accident, his nominee will receive the sum assured of INR 15 lakhs along with the rider sum assured of INR 5 lakhs. In all, the nominee would receive a total of INR 15 lakhs.

LIC Accident Benefit Rider greatly helps in dealing with the sudden loss of income that the family may have to face with the death of the insured individual. 

Documents required for LIC TECH TERM

1. To buy the policy:
   1. Identity Proof
   2. Address Proof
   3. Proof of Income/ Salary Statement
2. To raise a claim
   When a claim is to be raised it is advised that the nominee or the claimant has the following documents ready:
   1. Policy document
   2. Claim Form, signed by the nominee
   3. Proof of Death/ Death Certificate from the specified authority
   4. NEFT details
3. For additional PA benefit
   1. Copy of the FIR
   2. Post Mortem Report
   3. Copy of Panchnama
   4. Driver’s License if the insured was driving

Any other document that may be asked for by the company

How to buy LIC TECH TERM online?
Purchasing LIC Tech Term online is a simple and easy process. Follow the steps given below:

1. Log on to the official website and go to “Buy Policy Online”. 
2. Then select LIC Tech Term, choose the details such as sum assured, policy term, sum assured option, premium payment term, and the mode of premium payment.
3. Fill in your personal details
4. Once you fill in the details, you can go to the Premium calculator and see the premium that you would have to pay
5. Then the payment needs to be made.
6. If there is a medical requirement, it would have to be done thereafter for the policy to get issued.
7. Alternatively, you can log into Turtlemint, compare the best plans and then purchase the best policy online.

Exclusions under LIC TECH TERM:

There are certain exclusions related to suicide, which are as follows:

1. Single-Premium Policy
   In case the insured member commits suicide within 12 months of the date of policy purchase, 90% of the Single Premium that has been paid would be paid out to the nominee. No other claim will be entertained
2. Limited/ Regular Premium Payment Policy
   In case the insured member commits suicide within a period of 12 months of the date of purchase of the policy, 80% of the premiums that have been paid would be paid out to the nominee. No other claim will be entertained

Exclusions under Additional rider of LIC TECH TERM:

Death of the insured due to the following is not covered under LIC Tech Term additional Rider:

1. Self-inflicted injuries and suicide attempts
2. Participation in rebels, civil war, and war
3. Criminal or malicious activities 

Conclusion:

Securing the future of your loved ones becomes all the more crucial if one is the primary earning member of the family. LIC has always been the epitome of reliable and trusted insurance in India. For millions of Indians, LIC is the name that first pops in their mind when they hear the word Insurance. Purchasing the LIC Tech Term Online is an easy and affordable way to protect the financial interest of one’s family and loved ones. The plan offers a lot of flexibility and the policyholder can customize the plan as per his/ her insurance needs.