All of us were eagerly waiting for an online Term Plan from the biggest insurer in the Indian market - and finally it's here. LIC has come up with an online Term Plan, named as LIC e-Term Plan. So to give you an idea of its features and how it differentiates from others we thought of reviewing it in our today's edition of “Financial News Simplified".
 

Features of LIC e-Term
Minimum Entry Age	18 years
Maximum Entry Age	60 years
Maximum Maturity Age	75 years
Minimum Policy Term	10 years
Maximum Policy Term	35 years
Minimum Sum Assured	25 lakh for Aggregate Category & 50 lakh for Non Smoker Category
Maximum Sum Assured	No Limit
Premium Payment Mode	Annually

(Source: LIC Website)  

As you can clearly see in the table above, LIC e-Term Plan can be taken by any individual in the age bracket of 18 to 60 years. The minimum term for this policy is 10 years, while the maximum is 35 years. However the maximum maturity age is 75 years; which means that if your current age is 50, your policy term would be restricted only until another 25 years, and not beyond that {75 (Maximum Maturity Age) - 50 (Current Age)} since the policy will cease at the age of 75.

The minimum Sum Assured is Rs 25 lakh for 'aggregate' category, which includes all individuals other than non-smokers. For the 'non-smoker' category, the minimum sum assured is set at Rs 50 lakh; but it noteworthy that there is no upper limit on sum assured, for both these categories.

Nonetheless, the premium for a 'non-smoker' is higher, than that for an individual in the aggregate category for obvious reasons. The premium for LIC e-Term Plan can only be paid annually. One does not have the option to pay it monthly, quarterly or half-yearly.

Comparative Analysis...
Now let's compare the premium for LIC e-Term policy with LIC Amulya Jeevan II, which is an offline policy from LIC and 2 major online term insurance policies from private insurers. (Also Read: Which is the best Term Plan?)
 

Cost-to-Coverage Benefit

Premium
Term Plan	50 Lakh	1 Crore	5 Crore
LIC e-Term	5,618	11,236	56,180
LIC Amulya Jeevan - II	9,214	18,427	92,135
HDFC Click 2 Protect	5,730	10,112	47,528
ICICI Pru iCare II	7,488	13,105	45,701

(Source: Respective Companies Website)  

Premium Difference with LIC e-Term (%)
Term Plan	50 Lakh	1 Crore	5 Crore
LIC e-Term	0.00%	0.00%	0.00%
LIC Amulya Jeevan - II	64.00%	64.00%	64.00%
HDFC Click 2 Protect	2.00%	-10.00%	-15.40%
ICICI Pru iCare II	33.28%	16.63%	-18.65%

 

You see, in the table above we have compared premiums for a 20 year policy term of a 30 year old non-smoker for a sum assured of Rs 50 lakhs, 1 crore and 5 crore.

The general view is, LIC charges a higher premium for its term insurance policies than private insurers. But the table above depicts that, for a sum assured of Rs 50 lakh, LIC's e-Term Plan has the lowest premium, while LIC Amulya Jeevan - II has the highest premium. In fact, LIC's Amulya Jeevan - II has the highest premium in all the 3 segments (64% higher than LIC e-Term Plan.) The only reason for this is, it's an offline policy which has to be taken through a LIC agent and it involves commission paid to them.

Surprisingly, the premium of HDFC's Click 2 Protect and ICICI Pru iCare II is higher by 2% and 33% respectively than that of LIC e-Term plan in Rs 50 lakh sum assured segment.

But in the 1 crore sum assured segment, the premium for HDFC Click 2 Protect is the lowest; 10% lower than LIC e-Term plan while the premium ICICI Pru iCare II is still higher by 17%.

In the 5 crore sum assured segment, the premium for ICICI Pru iCare II is the lowest - about 19% lower than LIC e-Term plan, while the premium for HDFC Click 2 Protect is lower by 15%.

You might have observed that LIC e-Term plan premium is increasing proportionately with sum assured, while HDFC and ICICI are giving discount for higher sum assured. So as your sum assured increases, the discount on premium also increases for HDFC and ICICI. (Also Read: Which is the best Health Insurance Plan?)

The verdict:

Overall LIC e-Term plan is a good option for term insurance seekers as it provides financial security backed by LIC at low cost. But you need to prudently assess your life insurance requirement before jumping on to any term insurance policy, and then compare its premium and features with others before finalizing it.

Add Comments

Comments
ajvmmcs@gmail.com May 27, 2014 Your analysis would have been complete if you had compared with Mortality Rates as Term Plan comes into play on DEATH and the CLAIMS Ratios and Legal befuddlement of all companies should also be put on public displays with IRDA Warnings and Penalties ; then the Correct Perspective on Life Insurance would be on Public Display to make an INFORMED CHOICE!!
rahaneyogesh2@gmail.com Oct 02, 2018 Required help for choosing right term insurance company
rahaneyogesh2@gmail.com Oct 03, 2018 I have require help to choose right term insurance company
rakeshsharmamarbles@gmail.com Sep 10, 2018 e term plan settlements persents?

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