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LIC’s Tech Term is now available for purchase from its online portal. However, LIC’s Tech Term Premium is still a few thousands more than term policies from private insurers. Waiting for a term plan to launch is the dumbest thing a person can do and now the wait is not worth it IMO. Here are some premium illustrations. The numbers are from LICs purchase portal and policy Bazaar.
LIC’s Tech Term Features (what to choose and what not to)
LIC’s Tech Term plan is a non-linked, without profit, pure protection ‘Online Term Insurance Policy. Refer this for a guide to buying LICs Tech Term Online
Min sum assured: 50 Lakh. Max: Unlimited.
You can pay a premium each year, once or for a limited period. Always choose regular (each year)
There is an increasing sum assured option where from 5th to 15th year the sum assured will increase each year by 10%. Do not opt for this. Choose level cover or same cover each year. Invest right and grow your net worth instead! I do not see the logic behind increasing cover after five years!!
There is an accident rider (opt if you want), and special rates for women. The cover can be availed up to age 80 but only choose until age 60! Cost depends on the duration of the cover.
LIC’s e-Term (old online plan) vs LIC’s Tech Term (new online plan)
The only “benefit” is that LIC’s Tech Term is significantly less expensive than LIC e-term. The “benefit” is only for those who do not have a policy yet. Those who already own LIC e-term please do not discontinue it. That would be most irresponsible. An old term policy makes it harder for the insurer to deny claims and is a lot more valuable than a new cheaper policy! Do not take chances with the well-being of your nominees!
LIC’s Tech Term Premium Example 1 (one crore policy)
Age 29; Male; Non-smoker; Policy Term up to age 60. No Riders. Premium = 10696 (incl GST). Price comparison (approx, all incl GST) of other players shown below. I have only shown some established players. There are others who offer it for a lesser premium.
| Tata AIA LIFE Sampoorna Raksha | 9204 |
| LIC e-term | 15198 |
| Aegon | 7250 |
| Aviva | 8935 |
| icici iprotect | 9406 |
| Max life | 8024 |
| HDFC Life 3D Plus Life Option | 9398 |
Other illustrations for LIC’s Tech Term
Age 29; Male; smoker; Policy Term up to age 60. No Riders. Premium = 16926 (incl GST)
Age 29; Female non-smoker; Policy Term up to age 60. No Riders. Premium = 9138 (incl GST)
Age 29; Female smoker; Policy Term up to age 60. No Riders. Premium = 14122 (incl GST) This is a screenshot.
LIC’s Tech Term Premium Example 2 (one crore policy)
Age 24; Male; Non-smoker; Policy Term up to age 60. No Riders. Premium = 9346 (incl GST).Price comparison (approx, all incl GST) of other players shown below.
| Tata AIA LIFE Sampoorna Raksha | 8260 |
| LIC e-term | 13244 |
| Aegon | 7264 |
| Aviva | 6663 |
| icici iprotect | 8121 |
| Max life | 6962 |
| HDFC Life 3D Plus Life Option | 8136 |
Other illustrations for LIC’s Tech Term
Age 24; Male; smoker; Policy Term up to age 60. No Riders. Premium = 14434 (incl GST)
Age 24; Female; Non-smoker; Policy Term up to age 60. No Riders. Premium = 8203 (incl GST)
Age 24; Female; smoker; Policy Term up to age 60. No Riders. Premium = 12357 (incl GST)
LIC’s Tech Term: Should I buy?
If you prefer LIC to private insurers then go ahead and buy Tech Term. If you already hold LIC e-Term then for the sake of your nominees do not stop that and buy this! Go do something else instead of comparing premiums! If you do not mind buying from private players then go ahead and buy it from them.
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M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com
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Pattu Sir,
But, why should one not stop the old policy? I thought one of the features of Term policy itself is that its so simple and we can always start fresh (if a need arises).
For example. if some one has 30 year LIC term policy which is 15k for 50 lacs. If he/she completed 4 years and if the new policy is 40% cheaper, what is wrong in going for a new policy?
Because, many times I heard from good people like you, Subra, Manish that as long as you fill the form correctly while opening a term policy, the claim cannot be denied. So dont worry much about claim ratio etc… and go for the cheapest policy available… So, the same concept should be applicable here as well. Isnt it?
Just as a precaution, one might consider continuing the old policy until the new policy completes one year term.
Professor in Example 2, you have mentioned both the females as non-smokers.