Should I Buy LIC Pure Term Policy?

Pure Term Policy or Term Insurance Plan is nothing but the purest form of life insurance. It is in fact a basic protection plan with no benefits of investment or savings attached to it.  Pure term policies are the most affordable plans with the maximum coverage and relatively lower premiums.  

What Are Pure Term Policies?

Term policies as the name suggests are life insurance plans that offer coverage for a certain period of time or stipulated number of years. If death of the insured occurs during the tenure of the policy, the sum assured is paid out to his nominee. 

Term insurance plans are also called Pure Protection Plans. They help secure the family of the insured financially in the unfortunate event of his demise.  They offer high coverage amount with minimum premiums that can be paid periodically or at a single time depending on the terms of the policy taken.

Term plans usually consists of 2 portions namely Mortality charge, Administrative expenditure and the rest is taken as investment. Mortality charges are those charges that are paid to the insurance company by the insured person for giving him the benefit of life coverage and benefit upon death.

Administrative expenses are those expenses that are incurred in documentation and so on. The remaining amount is treated as investment for the insured which he claim upon maturity of the policy.

Advantages of Pure Term Plans

Some of the features due to which pure term policies are indispensable are:

They Provide A Larger Life Cover

Term insurance policies have very affordable premiums. Hence individuals can opt for a policy with a higher coverage for the same premium of an endowment policy with a lower coverage.

They Include Riders

The policy holder can add riders to the term policy thereby adding to the value of the policy. For instance, if you opt for a critical illness rider, you are entitled to the sum assured in case the illness occurs.  This is of course in addition to the life cover offered by the main terms of the policy. Other riders such as employment loss, physical disability, premium cover waiver and so on can also be added.

They Provide Enhanced Cover

Some insurance companies provide the option to enhance the life cover at the critical stages of the insurer’s life. For instance, the life cover can be enhanced by 50% at the time of a wedding or 25% at the time of child birth and so on. This provides an option to the policy holder to begin the term policy with basic coverage and enhance as the responsibilities add on. He needs to pay a higher premium only when it is actually necessary.

They Have Innovative Features

The best part about term plans is that they have been evolving very often and insurance companies have been innovative with them. They have proactively reduced premium rates and offered discounts to special categories.

Term Policy from LIC

The Life Insurance Corporation of India (LIC) has various term plans with different features. Some of them can be purchased online while others through third parties. The term policies of LIC include:

LIC Anmol Jeevan II

This term policy from LIC provides the financial security to the nominee in the event of death of the insured.  The benefits of this plan are:

Death Benefit: In the event of death of the insured during the policy term, the sum assured is compensated to the nominee of the policy.

Maturity Benefit: In case the insured survives the tenure of the plan, no amount will be payable.

The eligibility conditions are:

Minimum assured sum	6 lakh
Maximum assured sum	24 lakh
Minimum entry age	18 years
Maximum entry age	55 years
Maturity age	65 years
Minimum term policy	5 years
Maximum term policy	25 years

 

Premiums can be paid at half-yearly or yearly intervals during the course of the policy.

LIC Amulya Jeevan II

This term policy from LIC is a protection policy which helps the family of the deceased by providing financial security. The benefits of this plan are:

Death benefit: In the event of the death of the policy holder, sum assured will be payable.

Maturity Benefit: In the event of survival of the insured till the end of policy term, nothing should be owed.

The eligibility conditions are:

Minimum assured sum	25 lakh
Maximum assured sum	No limit
Minimum entry age	18 years
Maximum entry age	60 years
Maturity age	70 years
Minimum term policy	5 years
Maximum term policy	35 years

 

Premiums can be paid at half-yearly or yearly intervals during the course of the policy.

LIC e-Term Plan

This LIC term plan is different from the other plans in the way that it can be purchased through an online application process. It is a regular pure term policy available online that provides benefits to the policy holder’s family in the event of his death.

In this plan, there are different premium rates for aggregate lives and non- smokers.

For amount of sum assured up to Rs. 49 lakh, aggregate rates would only apply. Any amount beyond that, non-smoker rates can be chosen.      

Benefits of the policy are:

Death benefit: In the occurrence of the death of the policy holder, sum assured will be payable.

Maturity Benefit: In the event of survival of the insured till the end of policy term, nothing should be owed.

The eligibility conditions are:

Minimum assured sum	25 lakh(aggregate), 50 lakh(non-smoker)
Maximum assured sum	No limit
Minimum entry age	18 years
Maximum entry age	60 years
Maturity age	75 years
Minimum term policy	10 years
Maximum term policy	35 years

 

Premiums are supposed to be paid annually. An individual can only insure for himself and not propose for any third party.

Pure term insurance plans help keep your family secure and financially stable in your absence. They provide excellent coverage and their low premium rates make them very affordable as well.