LIC e-Term Plan: Who Should Buy and Why

What is the LIC e-Term Plan? The LIC e-Term Plan was an online-only term insurance policy offering pure life cover without maturity benefits. It provided affordable premiums, especially for non-smokers, with coverage starting at ₹25 lakhs and no upper limit on the sum assured (subject to underwriting). The benefit was payable only on death during the policy term. While LIC has improved its digital servicing in recent years and maintains a strong claim settlement ratio of 98.35% over the last 3 years, the plan lacks add-ons such as waiver of premium or critical illness cover, features commonly offered by private insurers. This makes it best suited for those who value LIC’s trust, scale, and reliability, but less ideal for buyers seeking flexibility and comprehensive protection. However, the LIC e-Term Plan (Plan No. 825) was withdrawn a few years ago and is no longer available for new purchases.

LIC’s e-Term Plan was one of the insurer’s earliest online offerings designed as a straightforward, no-frills protection policy. It stood out for its competitive premiums (especially for non-smokers opting for higher covers). However, compared to private insurers, it lacked flexibility in payment modes and additional features like riders, making it more suitable for those who valued simplicity and trust over customisation.

The LIC e-Term Plan has since been withdrawn and replaced by newer products like Digi Term and New Tech-Term. But it marked LIC’s first important step into the world of online-first term policies.

Understanding its features, benefits, and exclusions not only helps you see what the plan offers but also gives insight into how India’s oldest and most trusted insurer approaches these critical aspects of term insurance.

Friendly reminder: It’s easy to get lost comparing policies and premiums. Instead of spending hours on it, why not get personalized insurance advice from Ditto? We offer free consultations with zero spam! Just 30 minutes to clarify all your doubts. So book a call now.

What is the LIC e-Term Plan?

The LIC e-Term Plan is a regular premium, pure protection term insurance policy. It is non-participating, which means it does not share in LIC’s profits, and it offers no maturity or survival benefit. In simple words, if you survive the policy term, you receive nothing back.

The sole purpose of this plan is to provide a financial safety net to your family in case of your unfortunate death during the term.

Another important aspect is that this plan is available exclusively online. You cannot purchase it through LIC agents or offline branches. Everything, from applying to premium payment, happens digitally, which can be more convenient but also means you won’t have agent support. 

Premiums are classified into two categories: “aggregate lives,” which apply to everyone, and “non-smoker lives,” which come with lower premiums if you pass a urine cotinine medical test confirming you don’t use tobacco in any form. This structure encourages healthy habits and makes the plan more affordable for non-smokers.

Features of LIC’s e-Term Plan

The LIC e-Term Plan offers comprehensive life coverage with digital convenience and a set of notable features:

Coverage:

• Minimum coverage: ₹25 lakh for aggregate lives, ₹50 lakh for non-smokers.
• No maximum cap (subject to underwriting), with sum assured in multiples of ₹1 lakh.

Policy Term & Age:

• Policy term: 10–35 years.
• Entry age: 18–60 years; cover can extend up to age 75.

Premium Payment:

• Payable annually and only through online modes.
• It may be limiting for those who prefer monthly or quarterly payments.

Discounts:

• Maximum discount capped at ₹3,000 per policy per year.
• Renewal discounts: 6% (2nd year), 4% (3rd year), 2% (4th & 5th years).
• 8% discount on the first premium.
• Part of the government digital payment incentive program.

Grace Period & Revival:

• Policy can be revived within two years of lapse, subject to medical checks and LIC approval.
• Standard one-month grace period for premium payments.

Limitations:

• Lacks monthly/quarterly/half-year payment frequency
• Inbuilt features like life stage benefit, terminal illness cover, instant payout on claim intimation, and missing.
• No riders like critical illness benefit, waiver of premium, or disability coverage.

LIC e-Term Plan: Eligibility and Restrictions

LIC’s aim to keep this plan simple and direct, targeting individuals rather than businesses. While the absence of flexibility in structuring proposals may feel limiting to some, most salaried individuals and self-employed professionals find the simplicity valuable.

LIC e-Term Plan: Eligibility and Restrictions

The plan is strictly restricted to policies on one’s own life; proposals under employer-employee arrangements, keyman insurance, or partnership insurance are not allowed.

These restrictions are in line with LIC’s aim to keep this plan simple and direct, targeting individuals rather than businesses. While the absence of flexibility in structuring proposals may feel limiting to some, most salaried individuals and self-employed professionals find the simplicity valuable.

How to Buy the LIC e-Term Plan?

LIC’s online term plans can be purchased directly through their official website.

Even when the LIC e-Term Plan was available, it could be bought online by navigating through the “Buy Online” section on LIC’s website. For a detailed step-by-step buying process, check this guide. You can also check out our detailed reviews and guides here.

LIC Term Plans vs Private Insurer Policies: Premiums (2025)

The premiums shown below have been calculated for a non-smoker, earning ₹10 LPA, residing in Delhi. The premiums include GST, exclude any first-year discounts, and are for illustrative purposes only. Riders are not included. Actual premiums may vary depending on your health, smoking status, and rider selection.

Plan	A 30-year-old male till age 65 for a ₹1 crore cover	A 30-year-old male till age 65 for a ₹2 crore cover	A 40-year-old male till age 70 for a ₹2 crore cover
LIC Digi Term Plan	₹14,320	₹24,450	₹44,009
LIC New Tech Term Plan	₹16,734	₹30,005	₹53,867
HDFC Life Click2Protect Supreme	₹16,804	₹29,099	₹52,862
Axis Max Life Smart Term Plan Plus	₹14,086	₹23,664	₹45,737
ICICI Prudential iProtect Smart Plus	₹14,343	₹22,530	₹46,722

LIC term plans generally cost more, primarily due to their brand trust and strong claim settlement record. However, their features tend to be basic with limited customization. In contrast, private insurers often provide richer benefits and more rider options at relatively lower premiums.

LIC vs Private Insurers

Here’s a snapshot comparison of LIC and some leading private players based on publicly available data (average for FY 2022–25):

Insurer	Claim Settlement Ratio (CSR)	Complaints Volume per 10,000 claims	Annual Business (in Crores)	Solvency Ratio
LIC	98.35%	4.57	227,129	2
HDFC Life	99.55%	1.33	30,560	1.94
ICICI Prudential	98.03%	11	19,774	2.05
Axis Max Life	99.62%	5.67	10,719	1.88

(Source: IRDAI annual reports, company disclosures, and Ditto analysis for FY 2022–25 averages)

Comparative Gaps with Private Insurers

While LIC’s plans offer basic protection, they fall short in terms of flexibility and customization when compared to private insurers. Many private term insurance products today come with a range of riders, including waiver of premium, critical illness cover, and terminal illness benefits. Some even allow life stage upgrades, where coverage can be increased during key milestones like marriage or childbirth.

Private insurers also tend to offer monthly or quarterly premium payment modes, providing more budgeting flexibility. LIC, by contrast, only offers annual and half-yearly payment options. Furthermore, while LIC has improved its online platforms, private insurers often provide smoother digital onboarding and post-sales support.

It is important to note, however, that all insurers in India are regulated by the IRDAI and must maintain solvency and liquidity standards. While LIC is seen as inherently safer due to government ownership, private insurers also operate under strict safeguards.

Who Should Consider LIC?

Despite these differences, LIC remains a strong choice for buyers who value trust and stability over extensive customization. Backed by the government, it carries a legacy of reliability that appeals to those who prioritize safety over add-ons.

If you already have a trusted LIC agent, the personalized guidance and handholding they offer can make the buying process simpler. LIC’s products are also relatively straightforward and easy to understand, making them suitable for first-time buyers who prefer less complexity. Moreover, its consistently high claim settlement record provides added reassurance to policyholders.

In short, while private insurers may offer more flexibility and features, LIC remains a dependable option for individuals who value trust, simplicity, and proven reliability.

Why Choose Ditto for Term Insurance

At Ditto, we’ve assisted over 7,00,000 customers with choosing the right insurance policy. Why customers like Shikhar love us:

✅No-Spam & No Salesmen

✅Rated 4.9/5 on Google Reviews by 5,000+ happy customers

✅Backed by Zerodha

✅100% Free Consultation

You can book a FREE consultation. Slots are running out, so make sure you book a call now!

Ditto’s Take

The LIC’s e-Term Plan was a simple, no-frills online term insurance policy that provided solid protection at a reasonable cost, especially for non-smokers opting for higher covers. The plan also introduced digital discounts in the first five years, making it slightly more affordable. Backed by LIC’s strong claim settlement record, it offered reassurance to many families.

That said, it came with clear limitations. Premiums could only be paid annually, leaving no flexibility for monthly or quarterly modes. It also lacked riders such as waiver of premium or critical illness cover, features that have grown increasingly relevant given the rise in critical illness claims.

The policy lapsed if premiums were discontinued and did not acquire any paid-up value, though revival was allowed within two years. On the servicing side, LIC has improved its digital platforms in recent years, though private insurers still tend to offer quicker and more flexible experiences.

In short, the e-Term Plan worked well for those who valued LIC’s credibility and affordability, but it fell short on flexibility and add-ons. Since this plan is no longer available, you can look at LIC’s Digi Term or New Tech-Term if you prefer LIC, or explore private insurers like Axis Max Life or Bajaj Allianz for broader coverage and rider options.

FAQs