Life Insurance Corporation of India (LIC) has launched LIC’s Tech-Term plan, a new term insurance plan on 1 September 2019.
The new tech-term plan will be a non-linked, without profit and pure protection online term assurance policy and it provides financial protection to the insured’s family in case of his/her death, according to LIC’s website.
The tech-term plan will be available through the online application process only and no intermediaries will be involved, it says.
Pure term plans are low-cost and high sum-assured insurance plans.
The tech-term plan covers death due to any reason including accidental deaths except suicide during the first year. Under the plan, the sum assured is paid to the nominee in case of the premature death of the policyholder during the policy term. On maturity, on surviving the policy term, nothing is paid to the policyholder.
Who can apply
Term insurance policies are best suited for working individuals who have dependents (children and parents) and are looking for a considerable sum of protection against uncertainties of life at fairly low prices.
The minimum policy term is 10 years while the maximum is 40 years.
The nominee can be a minor but an appointee (major) has to be provided for the minor nominee.
The loan is not available under this product.
Eligibility for tech-term plan
The tech-term plan can be bought by resident Indians and is not available to the overseas citizen of India (OCI) or Person of Indian Origin(PIO). NRI’s, however, can apply for the new LIC term plan while their stay in India is subject to the condition that the applicant is residing in any one of the permissible countries.
The minimum and maximum entry age of a person who can buy a term plan are 18 years and 60 years respectively. The maximum age to get the cover is up to 80 years.
The person who plans to purchase a tech-term plan must have own earned income and cannot propose for anyone other than self.
The income should be sufficient to cover all existing and proposed insurance cover under all insurers, says LIC.
Features of plan
The sum assured or the minimum life cover for tech-term is Rs 50 lakh, with no upper limit. The policyholder can pay the premium either yearly, half-yearly or as a single premium. Again, based on the policy holder’s income proof, he or she can keep a high sum assured as well.
Death benefits can be paid in a lump-sum or in installments,
Under the lump sum option, the amount will be paid in a lump-sum to the nominee while under the installment option, the death benefit in installments is given over the chosen period of 5 or 10 or 15 years instead of lump-sum amount under an in-force policy. The installments must be paid in advance at yearly or half-yearly or quarterly or monthly intervals, as opted for.
If death takes place during the term of the insurance policy, then the nominee receives the sum assured under the plan.
Tech-term plan under non-medical scheme
The is available under the non-medical scheme also. For this, the person’s age should be in the age bracket 18-35 years with annual income above Rs 3 lakhs and the sum assured is Rs 75 lakhs.
If the age is in the range of 36-45 years with an annual income above Rs 5 lakhs, people can buy term-plan up to Rs 50 lakhs subject to the person being a non-smoker and no past medical history and underwriter’s decision.
Under the non-medical scheme, the premium will be calculated under the aggregate rate. Non-smoker rates will not be available under non-medical scheme.
Medical test required
The requirement for a medical test may or may not arise depending upon the underwriting requirements and health disclosures. A person’s medical tests will be short and basic (for example, blood test, urine test, etc.) and the rest will depend on one’s health status. A medical test is mandatory if proposed for a non-smoker rate and if it is not covered under the non-medical scheme. All medical expenses will be borne by LIC if the proposal results into a policy.