LIC has launched (or rather relaunched) its online term plan in 2022 – The name of the new policy is LIC New Tech Term Plan (No. 954). It’s a simple term policy. Technically, it is a Non-Linked, Non-participating, Individual, Pure Risk Premium Life Insurance Plan. This plan is only available online via LIC website.
Note – This new policy, namely LIC Plan 954 (New Tech Term) replaces the older LIC Tech Term Plan (No. 854). So this post will help you understand the differences in LIC 854 vs LIC 954 plans
Term life insurance is the truest and the most basic form of life insurance that I recommend for everyone. Do read the detailed Term Insurance FAQs that I wrote to help people understand why term plans are the best.
Now let’s have a look at the key features of the LIC New Tech Term Plan (2022-2023).
Features of LIC New Tech Term Plan (954)
- The minimum sum assured that one can purchase is Rs 50 lakh.
- There is no upper limit on the maximum basic sum assured.
- The policy term can be from 10 years to 40 years.
- The minimum entry age is 18 and the maximum entry age is 65 years. But in any case, the maximum age at the time of policy maturity should not be more than 80 years.
- You have the option to choose between a fixed sum assured or you can opt for increasing sum assured.
- You can even opt to get the benefit paid out to nominees in instalments instead of the default one-time lumpsum payout. This is an option to receive Death Benefits in instalments over a period of 5 years instead of a lump sum amount under an in-force policy. This option once chosen cannot be modified later on.
- Like all term plans (except the return of premium plans), on the survival of the policyholder to the end of the policy term, no maturity benefit will be payable.
- You can also choose the premium payment frequency – it can be single, regular premium or limited premium payment.
- You can further enhance coverage by opting for Accident Benefit Rider by paying an additional premium for the rider.
Before you decide to purchase life insurance, you should need correct answers to the first question – How to calculate the right life insurance amount? and that is because the right insurance coverage varies from one person to other. Rs 1 crore cover may not be large enough for everyone. Do read Is Rs 50 lac to Rs 1 Crore term insurance enough? to know more.
Also, you don’t need to purchase a policy that covers you till the age of 100 (which many insurance companies are pushing for these days). Read what the right tenure for life insurance is in this detailed article titled –How to find the right tenure for the term life insurance policy?
Let’s discuss the sum assured options in a bit more detail.
LIC New Tech Term Level & Increasing Sum Assured Options
1 – Level Sum Assured – In this option, the policy sum assured remains the same throughout the policy term. So if you purchase a Rs 1 Crore cover for 30 years, then the sum assured will remain at Rs 1 crore for the entire period of 30 years.
2 – Increasing Sum Assured – In this option, the chosen Sum Assured will remain constant till the completion of the 5th year. Thereafter, it will increase by 10% each year from the 6th to the 15th policy year when it will become twice the original basic sum assured. This new sum assured will then remain constant (and not increase any further) till the end of the policy term. So here is how your policy sum assured will increase (for let’s say Rs 1 Crore cover for a 25-year policy):
- Year 1 – Rs 1 Crore sum assured (start of policy)
- Year 2 – Rs 1 Crore sum assured
- Year 3 – Rs 1 Crore sum assured
- Year 4 – Rs 1 Crore sum assured
- Year 5 – Rs 1 Crore sum assured
- Year 6 – Rs 1.1 Crore sum assured (increases by 10%)
- Year 7 – Rs 1.2 Crore sum assured (increases by 10%)
- Year 8 – Rs 1.3 Crore sum assured (increases by 10%)
- Year 9 – Rs 1.4 Crore sum assured (increases by 10%)
- Year 10 – Rs 1.5 Crore sum assured (increases by 10%)
- Year 11 – Rs 1.6 Crore sum assured (increases by 10%)
- Year 12 – Rs 1.7 Crore sum assured (increases by 10%)
- Year 13 – Rs 1.8 Crore sum assured (increases by 10%)
- Year 14 – Rs 1.9 Crore sum assured (increases by 10%)
- Year 15 – Rs 2.0 Crore sum assured (increases by 10%)
- Year 16 – Rs 2.0 Crore sum assured (stays constant after 15th year)
- Year 18 – Rs 2.0 Crore sum assured
- Year 19 – Rs 2.0 Crore sum assured
- Year 20 – Rs 2.0 Crore sum assured
- Year 21 – Rs 2.0 Crore sum assured
- Year 22 – Rs 2.0 Crore sum assured
- Year 23 – Rs 2.0 Crore sum assured
- Year 24 – Rs 2.0 Crore sum assured
- Year 25 – Rs 2.0 Crore sum assured (end of the policy)
Premiums of LIC New Tech Term Plan
The policy premiums are decided based on factors like age at the time of entry/purchase, gender, policy term, policy premium payment term, smoking status, and Sum Assured Option (constant or increasing).
Here are some sample premium details provided by LIC in its sales brochure via its website – The sample illustrative premiums (excluding GST) for both options (Level Sum Assured and Increasing Sum Assured) for a Basic Sum Assured of Rs. 1 Crore for Non-Smoker, Male, Standard lives under different Premium Payment options are as under –
- Fixed Sum Assured Rs 1 crore – Age 20 years, Policy tenure 20 years, the regular annual premium would be Rs 7047
- Increasing Sum Assured Rs 1 crore – Age 20 years, Policy tenure 20 years, the regular annual premium would be Rs 9345
- Fixed Sum Assured Rs 1 crore – Age 30 years, Policy tenure 20 years, the regular annual premium would be Rs 9135
- Increasing Sum Assured Rs 1 crore – Age 30 years, Policy tenure 20 years, the regular annual premium would be Rs 13,083
- Fixed Sum Assured Rs 1 crore – Age 40 years, Policy tenure 20 years, the regular annual premium would be Rs 17,889
- Increasing Sum Assured Rs 1 crore – Age 40 years, Policy tenure 20 years, the regular annual premium would be Rs 27,846
From what I could make out of it, the premium is the only difference between the LIC NEW Tech Term Plan (No. 954) and the earlier LIC Old Tech Term Plan (No. 854). The new plan premiums are higher than the older ones.
Since this policy is only available online and you cannot buy it through your family or LIC agent, here is how to go about it (as detailed by LIC itself) in its brochure available on its website here.
How to purchase LIC New Tech Term Plan online (2023)?
Step-by-step process to buy LIC’s New Tech-Term Online:
- Log on to the LIC website (www.licindia.in) for buying this online product. Click on ‘Buy Policies Online’. Select plan LIC’s New Tech-Term.
- Click on ‘Buy Online’. Choose your desired Sum Assured, Sum Assured option (Level/Increasing), Policy Term, Premium Payment option (Regular/Limited/Single) and Premium Payment Mode (Yearly/Half-yearly) for Regular and Limited Premium Payment option, Date of Birth, Gender and Smoking status.
- After filling in the details, a premium calculator will calculate the premium or the chosen parameters.
- Enter other details such as Name, Address, Occupation, Qualification etc. displayed on the screen and complete the proposal form online.
- Pay premium online and fulfil the underwriting requirements, if any.
Should You Buy LIC New Tech Term Plan (954)?
That is the key question obviously after all the discussion. While there is no doubt about LIC being synonymous with trust in India, the fact is that the new policy is similar to the old one but is slightly costlier.
If you have a strong preference for LIC when it comes to purchasing insurance, then you can go for this new term plan by LIC. Else, if you search for similar term plans by other private insurance companies, then you will find cheaper options as well.
F you have doubts about whether private insurers will settle claims without hassle or not then please note that as per Section 45 of the Insurance Act 1938: (1) No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy. So you can rest assured that unless something is really amiss, the claims will be settled by all life insurance companies and not just LIC.
So that was all about LIC’s new term insurance policy that they have in 2022-23 named LIC New Tech Term Plan.