LIC Online Term Insurance Plan ‘e-Term’ is not Cheap

After 2 years of deliberation, LIC Online Term Insurance Plan e-Term was finally soft-launched through LIC’s online initiative, LIC Direct.  A lot of us have been waiting for this occasion for years now. As of now, it is available at the following link.
 
Use this link to buy : LIC Online Term Insurance Plan e-Term
 
In 45-60 days, it is likely to be available through their official website.
 
The plan is very similar to what most insurance companies have been having for the last 3-4 years now. And the simplicity is not surprising given the nature of this wonderful product.
 
 

• Cannot be bought through an agent or paid through Cheque/DD, only Online.
• On death, nominee gets life insurance cover (Sum Assured).
• No benefits on maturity of plan.
• Choose life insurance cover from Rs. 25 lakhs to any limit through the Aggregate category.
• From Rs. 50 lakhs life insurance cover onwards, non-smokers get a discounted rate (like most other companies’ term plans).  To get this, choose “Non-smoker” category when you calculate premium.
• Any cover more than or equal to Rs. 50 lakhs entails a medical test.
• Life Insurance protection up to age 75 years subject to a maximum term of 35 years.
• Only annual premiums are allowed – no monthly, quarterly or half-yearly option.
• NRIs can buy this plan only when they are in India.
• No options to add benefits on accidental death, or critical illness, or disability etc. which are already offered by some insurance companies.

 
Like for most other insurance companies, the premium for LIC Online Term Insurance Plan e-Term is very low (almost 20-40% lower depending on age, duration, etc.) when compared to LIC’s offline term insurance plan.  This is for several reasons. But it is not as cheap as many other similar plans from other life insurance companies.
 
Here’s a premium comparison of all term plans. This is for Life Insurance cover (Sum Assured) of Rs. 75 lakhs for a 30 year old non-smoking male, for a period of 30 years.  i.e. unto age 60 years.
 

 
So you will notice that while the LIC Online Term Plan ‘e-Term’ is definitely cheaper than their own offline term plan, it is fairly expensive compared to other online term insurance plans in the market.
 
A Few Words of Caution
 
Premium rates change differently for different companies when you change age, sum assured, term, etc. The table above is representative and the rankings may not hold for all combinations.
 
Also, Premium is not the only parameter to compare on.  Make a balanced choice. Check claims settlement ratio, solvency margin and company profitability and size before you choose your term insurance plan provider. And you will find all that information here.