LIC e Term is the online term plan from Life Insurance Corporation. As you know that LIC is the biggest name of Life Insurance Industry in India. Thus most of the people want to know about the Term Plan of LIC. In this post, I have reviewed the LIC e-Term on the basis of Premium, Trust, Claim Ratio, flexibility and riders.
Premium of LIC e-Term
The LIC e-Term is the costliest Online Term insurance Plan. In fact, the premium of this plan is about 1.5 times higher than the second most costly online term plan. For a 30 year person, a term cover of ₹1 crore till the age of 60 would cost about 16,000/year. To understand it better you should compare the premium of LIC e-Term with other online term insurance policies. In this comparison, I have not considered any riders. The following comparison is only for the basic term plan.
|Online Term Plan||Premium per year|
|HDFC Click 2 Protect Plus||9,718|
|ICICI Pru iProtect Smart||9739|
|SBI Life eShield||11,092|
|Aegon Life iTerm||7,497|
Now, You have the exact idea of the higher cost of LIC plan.
There is no doubt that LIC has the highest credibility among all the life insurance companies. It is a household name and people have been using the LIC plans for long-term saving. Most of the people trust LIC blindly.
The main reason for this trust is the government guarantee. The government of India gives a sovereign guarantee to plans of LIC. Thus, there is no chance of default. People are assured of their money. They know that LIC would honour the claim whatever would be the situation.
Also, LIC is the only 100% government-owned company hence, people never expect any wrongdoing from it. All other life insurers are private companies.
Claim Settlement Ratio
The claim settlement ratio is the indicator of trustworthiness of a life insurance company. The higher ratio shows that there would be a greater chance of honouring the claim. The IRDA publishes the claim settlement ratio of every life insurance company every year.
This ratio is achieved by using following formula-
Total Settled Claims/Total Claims Made
The LIC scores on this front as well. It has the best claim settlement ratio. It shows that LIC settles more claims than any other insurance company. However, HDFC Life, ICICI Pru and SBI life are not far behind.
|Online Term Plan||Claim Settlement Ratio|
|HDFC Click 2 Protect Plus||97.6%|
|ICICI Pru iProtect Smart||96.7%|
|SBI Life eShield||96.7%|
|Aegon Life iTerm||97.1%|
The flexibility is another factor to judge the term insurance plan. If a term insurance plan gives you cover for more than 60 years or till the age of 100, it may be good for you. Else, A plan with return of premium may seem better to you. Similarly, many people like the term insurance plan which gives higher insurance cover in later age.
The various option of term insurance gives you many choices. More choices mean a better fit for you. I have assessed the LIC e-term on these 4 features.
In this option, the term insurance plan takes care of the rising inflation. The insurance cover increases every year by a fixed percentage. This percentage may be 5% or 10%. If the insurance cover is 1 crore in first year, it would become 1 crore 10 lakh in the next year.
Traditionally, the term insurance cover is not given after the age of 65. However, now the insurance companies give you an option to have term insurance cover till the age of 70 or 75. However, the premium of such policies would be very high. Even some companies give you insurance cover till the age of 100. However, it would not be the pure term plan.
Return of Premium
Many insurance companies offer term insurance cover with the return of premium. The premium is returned if there is no claim during the policy period. However, You should note that this would not be a pure term plan. As a pure term plan never give you back any maturity amount.
It is a good option for term insurance plan. In this plan, the full claim amount is not paid in lump sum. Rather, it is staggered during a time period. This plan is beneficial in case the policyholder’s family can’t manage the lump sum amount.
|Online Term Plan||Increasing sum assured||Maximum Age||Return of Premium||Staggered Payment|
|HDFC Click 2 Protect Plus||Yes||70||Yes||Yes|
|ICICI Pru iProtect Smart||No||75||No||Yes|
|SBI Life eShield||Yes||60||No||Yes|
|Aegon Life iTerm||Yes||80||Yes||Yes|
Riders give you added benefit along with the term insurance plan. These may be the biggest draw for many insurance policies. Sometimes it is a wise decision to opt for a rider along with the pure term insurance plan. You have to pay an extra premium for the riders. The LIC e-Term is pure life insurance cover and does not give the facility of any rider.
|Online Term Plan||Accident Death Benefit||Critical Illness||Disability Benefit||Waiver of Premium|
|Gives extra claim amount if death happens because of an accident||It gives expense for treatment of critical illness and compensates the loss of income||It gives a regular income in case of the disability||If death happens the family need not pay for future premiums of the policy|
|HDFC Click 2 Protect Plus||Yes||Yes||Yes||Yes|
|ICICI Pru iProtect Smart||Yes||Yes||No||Yes|
|SBI Life eShield||Yes||No||Yes||No|
|Aegon Life iTerm||Yes, Free||Yes||No||Yes|
Why Should you Take LIC
The LIC e-term is the most basic online term insurance plan. It does not give any riders. This plan is also limited up to the age of 65. The sum assured payment is also limited to one option. Still, it is the costliest online term plan. The one and only positive thing about the LIC e-Term is the Trust. The claim settlement ratio also enhances this trust factor.
No other company is considered as much reliable as the LIC. So, if you have complete faith on LIC, go for LIC e-Term plan. Else, there are many better and cheaper online term plans available.