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Life Insurance Corporation of India (LIC) is a prominent state-owned insurance and investment corporation known for its extensive range of insurance products and services tailored to cater to the diverse needs of the Indian population.

LIC offers a wide spectrum of insurance solutions, including life insurance, health insurance, pension plans, and investment options to ensure comprehensive coverage for its customers. Established in 1956, the company has gained immense popularity in India due to its long-standing history, unwavering trust, and affordable policies encompassing various financial needs.

This article aims to serve as a comprehensive guide for all those interested in learning more about LIC of India, delving into the core aspects of the corporation, its offerings, and its impact on the lives of millions of Indians.

Must-Known Facts About Life Insurance Corporation of India (LIC India)

Let’s have a look at some quick facts about LIC of India below:

  • State-Owned Entity: LIC is a government-owned insurance company established in 1956 after the merger of 245 insurance providers and provident societies.
  • Market Share Dominance: With a market share of over 70% in the Indian life insurance sector, LIC remains the largest insurance provider in the country.
  • Massive Customer Base: LIC has a vast customer base of over 290 million policyholders and counting.
  • Diverse Product Portfolio: Life Insurance Corporation of India offers a wide range of insurance products such as life insurance, health insurance, pension plans, and investment options.
  • Significant Economic Contributor: LIC plays a crucial role in India's economic growth and development by mobilising domestic savings and investing in infrastructure.
  • Consistent Claim Settlement: LIC's commitment to assist its policyholders is evident with a high claim settlement ratio of 98.62%.
  • Sovereign Guarantee: All LIC policies come with a sovereign guarantee, providing customers with an extra layer of financial security.
  • E-Services: LIC offers various e-Services, such as online premium payments, policy status checks, and claim submissions, making it convenient for customers to manage their policies.
  • Social Initiatives: The Life Insurance Corporation of India actively engages in several social initiatives including scholarships, sports sponsorships, and disaster relief efforts, demonstrating its commitment to India's well-being.
  • Government-Backed Assurance: As a 100% state-run company, LIC policies are guaranteed by the government to settle claims in case of default. Ranked 19th in the list of most desired brands in India and 2nd in the BFSI sector after SBI, LIC's reputation further solidifies its appeal.

Why Opt for LIC Life Insurance Plans?

Life Insurance Corporation of India, as the oldest and one of the most trusted life insurance providers in the country, offers a wide variety of insurance plans. Opting for LIC insurance plans offers several advantages.

Firstly, LIC has a robust claim settlement ratio, indicating high reliability in settling insurance claims. Secondly, the range of insurance products offered by LIC—from term plans, endowment plans, and money back policies to whole life policies — ensures that there's a plan suitable for every individual's financial goals, be it protection, savings, investment, or retirement. Additionally, LIC offers the flexibility of adding riders to enhance policy coverage based on specific needs.

The company's extensive network across India and user-friendly digital services make policy purchases and maintenance convenient for customers. LIC's reputation, built over decades of customer service, further assures policyholders of their financial security.

Who Should Buy LIC Policy?

Life Insurance Corporation of India has a wide range of insurance policies suitable for different life stages and financial goals. Here's who should consider buying a LIC policy:

For Couples

  • Newly married couples can consider LIC policies to secure their partner's financial future in case of an unforeseen event.
  • Couples with dual incomes can explore LIC's pension or investment plans to build long-term wealth and secure retirement.

For Families

  • Families with children can consider LIC child plans to secure their education and future financial needs.
  • Families with dependents or high liabilities can opt for LIC's term or whole life policies to protect their loved ones financially.

For Individuals

  • Self-employed individuals or professionals can explore LIC pension plans to build a retirement corpus.
  • Individuals seeking long-term investments with guaranteed returns or tax-saving benefits can consider LIC endowment or money-back plans.

Types of LIC Plans

By offering a multitude of insurance products, LIC has become a one-stop destination for millions of Indians seeking financial security and growth. Among the extensive array of options, several LIC offerings have gained significant popularity in India.

Some of them are listed below -

1. LIC Unit Linked Plans

Unit-linked insurance plans (ULIPs) represent a unique blend of insurance and investment, offering policyholders both life coverage and the opportunity to invest in market-linked instruments such as equities, bonds, or a combination of both. With these plans, individuals can easily diversify their investments while securing their financial future.

For instance, a policyholder might opt for a ULIP that allocates a certain portion of their premium towards life insurance and the remaining towards investments in market-linked funds. This enables them to enjoy the dual benefits of financial protection for their loved ones and potential wealth accumulation over time.

Life Insurance Corporation of India plays a significant role by providing an extensive range of ULIP options catering to different risk profiles and investment objectives. These plans offer various fund choices and flexibility in premium payments, enabling policyholders to customise their investment strategies and maximise returns while maintaining a life insurance coverage safety net.

Some of the popular LIC ULIP plans are given below:

  • LIC Nivesh Plus
  • LIC SIIP
  • LIC New Endowment Plus

2. LIC Whole Life Plans

Whole life plans are one of the types of permanent life insurance plans, offering coverage for the entire lifetime of the policyholder. Unlike term insurance plans that offer coverage for a fixed duration, whole life insurance remains in effect as long as the premiums are paid. It has a unique feature where a portion of the premiums accumulates as a cash value, which can be borrowed against or used to pay premiums or even be withdrawn (subject to the terms and conditions of the policy).

Life Insurance Corporation of India, one of the largest insurers in the country, offers a variety of whole life plans catering to different market segments with diverse requirements. These plans vary in premium amounts, coverage, maturity benefits, and other features, helping you choose a plan that best fits your financial goals and risk tolerance. One of the notable LIC whole life plans is LIC Jeevan Umang.

3. LIC Endowment Plans

Endowment plans are a type of life insurance policy combining insurance coverage with savings. Under an endowment plan, the policyholder pays regular premiums for a specified term, with the policy offering a lump sum payout upon its maturity or in case of the insured's untimely demise during the policy term.

For example, an individual may purchase a 20-year endowment plan with a sum assured of INR 10 lakhs. If the said person survives the term, they will receive the sum assured along with any accumulated bonuses, providing a considerable corpus for financial goals such as retirement, children's education, or marriage. In case of the policyholder's death during the policy term, the sum assured and accrued bonuses (if any) would be paid to their beneficiaries, ensuring financial protection for their loved ones.

Life Insurance Corporation of India's endowment plans make for a popular choice for individuals seeking these combined benefits. With a strong reputation for trust and reliability, competitive bonus rates, and various riders to enhance coverage, LIC endowment plans provide policyholders with both financial security and the opportunity for long-term savings.

Here are some of the prominent LIC endowment plans -

  • LIC Bima Jyoti
  • LIC Single Premium Endowment Plan
  • LIC New Endowment Plan
  • LIC Jeevan Labh
  • LIC New Jeevan Anand
  • LIC Jeevan Lakshya
  • LIC Aadhaar Shila
  • LIC Bima Ratna
  • LIC Dhan Sanchay
  • LIC Aadhaar Stambh

4. LIC Money Back Plans

Money-back plans provide periodic payouts during the policy term. They are designed to meet your liquidity needs at various stages of life. If the insured individual survives the entire policy term, they receive the balance sum assured. In case of the insured's demise during the policy term, the full sum assured is paid to the beneficiaries - irrespective of the payouts already made.

The Life Insurance Corporation of India has several money-back plans, each one catering to different needs and financial goals.

Let’s take a look at the list -

  • LIC Jeevan Tarun
  • LIC Jeevan Shiromani
  • LIC Bima Shree
  • LIC New Money Back Plan – 20 Years
  • LIC New Money Back Plan – 25 Years
  • LIC New Children’s Money Back Plan
  • LIC Dhan Rekha
  • LIC New Bima Bachat

5. LIC Term Insurance Plans

Term insurance plans, as we saw earlier, provide coverage for a specified "term" or period. If the policyholder dies during this term, a death benefit is paid out to the beneficiaries. However, if the insured survives the term, no benefits are generally payable. Term insurance plans are typically the most affordable type of life insurance as they purely offer a death benefit and do not contain any savings or investment component.

The Life Insurance Corporation of India, the largest life insurance company in the country, plays a significant role in offering term insurance plans.

It provides a variety of plans as listed below -

  • LIC Jeevan Amar
  • LIC Bhagya Lakshmi
  • LIC Tech Term
  • LIC Saral Jeevan Bima

6. LIC Riders

Riders are optional add-ons or benefits that you can attach to your basic insurance policy to enhance the coverage, typically at an additional premium cost. Life Insurance Corporation of India offers various riders that policyholders can use to customise the plan as per their requirements -

  • The LIC Accidental Death and Disability Benefit Rider provides an additional sum assured in case of accidental death or disability. 
  • The LIC Accidental Death Benefit Rider offers an extra sum assured if the death of the policyholder occurs due to an accident. 
  • The LIC Premium Waiver Benefit Rider is particularly beneficial for minors, as it waives off future premiums in case of the proposer's death or disability. 
  • The LIC New Critical Illness Benefit Rider provides a lump sum on the diagnosis of any of the specified critical illnesses, which can provide additional financial support when healthcare costs are likely high.
  • The LIC New Term Assurance Rider allows policyholders to add term insurance coverage to their basic policy, providing an additional death benefit.

Steps to Take to Buy a Suitable LIC Policy

Keep the following points in mind to choose a suitable LIC insurance policy –

  • Assess Your Needs: While the primary purpose is to provide financial security for one’s dependents in case of their untimely death, it’s important to determine why you particularly need life insurance.
  • Calculate Coverage: Determine the amount of coverage you need. This depends on factors like your income, expenses, loans, assets, and the number of dependents. A common rule of thumb is to have coverage worth 10-15 times your annual income.
  • Choose the Type of Policy: Decide on the type of policy you want—term insurance, endowment, whole life, or a unit-linked insurance plan (ULIP). Each type has pros and cons; the choice depends on your financial goals, risk appetite, and life stage.
  • Read Policy Documents Carefully: Before purchasing, read the Life Insurance Corporation of India policy document carefully to understand the inclusions, exclusions, terms, and conditions.
  • Consider Riders: Consider adding riders to your policy for enhanced protection in situations like accidental death, critical illness, or disability.
  • Calculate Premium and Maturity Amount Online: You can use the Life Insurance Corporation of India maturity and premium calculators available online. This can help you compute the maturity amount that you will receive at the end of the policy term. 

FAQ's

Q1. Can I change the sum assured in my LIC policy?

Ans: Yes, users have the option to increase or decrease the sum assured at any time during the policy term in most LIC policies. However, the change may be subject to certain conditions and additional premiums.

Q2. Can I surrender my LIC policy before maturity?

Ans: Yes, most LIC policies have a surrender value that can be availed by policyholders who wish to surrender their policy before maturity. However, as the surrender value may be subject to certain deductions and conditions, policyholders should carefully evaluate the impact of surrendering their policy before making a decision.

Q3. What are the types of offerings by the Life Insurance Corporation of India?

Ans: Life Insurance Corporation of India offers a wide array of products including endowment plans, term insurance plans, ULIPs, money-back plans, whole life plans, and more.

Q4. What is the Life Insurance Corporation of India's claim settlement ratio?

Ans: Life Insurance Corporation of India's claim settlement ratio is the percentage of claims paid out by the company in a financial year against the total claims. For the financial year 2021-22, LIC's claim settlement ratio was around 98.62%, which indicates high reliability in settling insurance claims.

Q5. What is the difference between a LIC term insurance plan and a LIC endowment plan?

Ans: An LIC term insurance plan provides coverage for a specified term and pays a death benefit to the beneficiaries in case of the policyholder's death during the term. An LIC endowment plan, on the other hand, provides both insurance coverage and savings or investment benefits with a lump-sum payout at the end of the policy term.

Q6. What is the maximum age limit for purchasing a LIC policy?

Ans: The maximum age limit for purchasing most LIC policies is 65 years. However, some policies may have different age limits based on their features and benefits.

Q7. How long does it take for LIC to settle a claim?

Ans: LIC aims to settle claims within 30 days from the date of receipt of all necessary documents. However, the time taken may vary based on the complexity of the claim and the completeness of the documentation.

Q8. Can I take a loan against my LIC policy?

Ans: Yes, most LIC policies allow policyholders to take a loan against the surrender value of their policy, subject to certain conditions and interest rates.

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