LIC New Term Assurance Rider: Sum Assured & Rules

Overview

The LIC New Term Assurance Rider is a non-linked, non-participating pure risk add-on providing an extra death benefit. It can only be added at the start of LIC policies.

Key Rules and Limits

Entry Age: Minimum 18 years (completed), maximum 60 years (nearer birthday).
Cover Ceasing Age: Maximum 75 years (nearer birthday).
Rider Term: Minimum 5 years (Single/Regular premium) or 10 years (Limited premium); maximum 35 years.
Sum Assured Limits: Minimum ₹1 Lakh up to a maximum of ₹25 Lakh across all LIC policies combined. The rider amount cannot exceed the base policy's sum assured.
Availability: Must be chosen at the inception of the base life policy. It cannot be added later, is restricted to traditional, non-linked plans, and offers no maturity or survival benefits.

If you are thinking of purchasing a guaranteed LIC policy and someone mentions adding a "term assurance rider" to boost your cover, it's worth understanding what you're actually getting first.

A rider sounds like a simple upgrade, but it comes with real strings attached that a standalone term plan doesn't. This new term assurance rider from LIC can only be attached to eligible existing policies like LIC Jeevan Labh or New Jeevan Anand when you purchase them.

This guide covers how the rider works, its sum assured and premium rates, who's eligible, where it falls short, and how it compares with a separate, dedicated term plan.

What Is the LIC New Term Assurance Rider?

The LIC New Term Assurance Rider (UIN 512B210V02) is a supplementary benefit attached to a non-linked LIC base policy when you buy it, adding a lump sum death benefit on top of whatever the base policy already pays out.

The Accident Benefit Rider and the Premium Waiver Benefit Rider can both be added later at any policy anniversary to an in-force policy. The New Term Assurance Rider does not offer this flexibility. If you do not opt for it at the time of buying the base policy, you cannot add it later.

Moreover, this is not a standalone rider, and it cannot be attached to ULIPs.

Ditto's Insight

IRDAI caps rider premiums against the base policy. LIC's Critical Illness Rider can't exceed 100% of the base policy, and all other riders combined can't exceed 30%. That structural limit is why a rider can only ever supplement your cover, not replace a term plan sized to your actual needs.

How Does the LIC New Term Assurance Rider Work?

If the life assured passes away during the rider term with both the rider and base policy active, the death benefit paid depends on the premium payment mode chosen.

For regular and limited pay policies, the payout is the highest of the rider sum assured, 7 times the annualized rider premium, or 105% of the total rider premiums paid up to the date of death.

For single pay policies, the payout is the higher of the rider sum assured or 1.25 times the single rider premium paid.

Sum Assured and Premium Rates for the Rider

The rider sum assured ranges from ₹1,00,000 to ₹25,00,000, and this ceiling applies across every LIC policy you hold combined, not per policy, while also staying within the base policy's own sum assured.

The table below shows sample annual premium rates for a regular premium policy per ₹1,00,000 sum assured. If you use tobacco, have a pre-existing condition, or work in a hazardous occupation, LIC will apply an underwriting extra on top, per LIC's brochure:

Entry Age (Years)	Term of the Policy (10 years)	Term of the Policy (20 years)
20	₹181	₹181
30	₹199	₹258
40	₹391	₹593
50	₹1009	₹1369

Limited and single premium modes are also available, with the same mode as your base policy automatically applying to the rider. You can refer to the New Term Assurance Rider sales brochure for more sample rates.

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Eligibility Criteria for the LIC New Term Assurance Rider

Criteria	Limits
Minimum Age at Entry	18 years (completed)
Maximum Age at Entry	60 years (nearer birthday) (For example, if your completed age is 60 years and 7 months, then it's nearer to 61, which means you are ineligible)
Maximum Cover ceasing age	75 years (nearer birthday)
Minimum Rider Term	5 years under single and regular premium 10 years under limited premium
Maximum Rider Term	35 years or 75 years - entry age (lower)
Premium Payment	Single, regular and limited
Premium Paying Term (Under Limited Premium)	5 to 34 years
Minimum Term Assurance Rider Sum Assured	₹1 Lakh
Maximum Term Assurance Rider Sum Assured	₹25 Lakh

Limitations of the LIC New Term Assurance Rider

The ₹25 lakh maximum sum assured is a significant constraint. Most financial advisors recommend a life cover of 15 to 20 times your annual income, and when you factor in liabilities like a home loan, a child's education, or long-term family expenses, ₹25 lakh is unlikely to be sufficient for most working professionals.

Most working professionals need ₹2 crore or more in life cover, which this rider alone was never designed to provide. There is also a structural risk worth noting, that your rider cover is entirely dependent on the base policy remaining active. If premiums on the base traditional policy become difficult to sustain, you risk losing both the investment component and the life cover at the same time, which is precisely when financial protection matters most. At Ditto, we always recommend securing your income with a pure term plan before considering any other financial product. If you are unsure how much cover you need, our ideal coverage calculator factors in your income, liabilities, and expenses to help you arrive at the right cover amount.

LIC New Term Assurance Rider vs. a Separate Standalone Term Plan

Feature	LIC New Term Assurance Rider	Standalone Pure Term Plan
Structure	Add-on to a traditional LIC policy	Independent policy
Maximum Cover	₹25 lakh (aggregate across all LIC policies)	Maximum cover depends on income level and underwriting. Since comprehensive plans from insurers do not have any upper limits, it can be up to 20x-30x of your annual income
Purpose	Provide a small life cover boost to traditional LIC policies	Covers loans, future goals like education, and provides income replacement for the family comprehensively
If the Linked Policy Lapses	Cover ends immediately	Not applicable. It doesn't depend on anything else

A standalone plan gets you meaningfully more cover than a LIC term rider with no dependency on an underlying investment policy. At Ditto, we don't recommend treating life cover as an afterthought bundled onto a savings plan. Instead, it deserves to be calculated carefully and bought on its own.

You can refer to our best term insurance plans guide to evaluate a pure term plan that suits you the best. If you prefer LIC as an insurer, consider their term plans like the Digi Term Plan.

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Conclusion

The LIC New Term Assurance Rider can work as a small, low-cost top-up if you are already thinking of owning a traditional LIC policy and want extra cover alongside it. It shouldn't be your primary strategy though, the ₹25 lakh cap and the dependency on your base policy staying active make it a poor substitute for a properly sized standalone term plan.

If you're relying on a rider for your family's actual financial protection, our cover calculator takes a couple of minutes and gives you a realistic number instead.

Frequently Asked Questions

Can the LIC New Term Assurance Rider be added to a ULIP, or only to traditional LIC policies?

The LIC New Term Assurance Rider can only be attached to traditional, non-linked LIC policies such as Jeevan Labh or New Jeevan Anand. It cannot be added to ULIPs or any linked plan.

What is the maximum sum assured allowed under the LIC New Term Assurance Rider?

The maximum sum assured allowed under the LIC New Term Assurance Rider is ₹25 lakh, and this is an aggregate limit across every LIC policy you hold, not a per-policy limit. It also cannot exceed the sum assured of the specific base policy the rider is attached to.

Does the LIC New Term Assurance Rider pay any maturity benefit if I survive the rider term?

No. The LIC New Term Assurance Rider is a pure protection rider and pays nothing if the life assured survives the full rider term. There is no maturity benefit, no return of premiums, and no survival payout of any kind. The rider exists solely to pay a death benefit to the nominee if the life assured passes away during the rider term. All premiums paid toward the rider are effectively the cost of that protection and are not refunded under any circumstance.

Can I take the LIC New Term Assurance Rider on a policy after it has already started, or only at inception?

The LIC New Term Assurance Rider can only be opted for at the time of buying the base policy. Unlike the LIC Accident Benefit Rider and the Premium Waiver Benefit Rider, both of which can be added at a policy anniversary to an in-force policy, the New Term Assurance Rider does not offer this flexibility. If you did not select it when you first bought your base policy, you cannot add it at a later stage.

Is there any surrender value or paid-up value under the LIC New Term Assurance Rider?

No, the rider does not build any paid-up value or surrender value on its own. If you surrender the base policy, a partial refund of unexpired rider premium may apply under limited or single premium modes, but nothing is refunded under regular premium policies. Note what's being refunded: only the portion of rider premium you prepaid for cover extending beyond your premium-paying term. It is not a refund of unused premium.

What happens to LIC New Term Assurance Rider's premium if I surrender the base LIC policy it is attached to?

Under regular premium policies, nothing is refunded. Under limited premium policies, a refund applies only if you've paid premiums for at least the first two or three years (depending on the premium paying term), calculated as 75% of the unexpired risk value. Under single premium, 90% of the unexpired proportion is refunded.

Is adding the LIC New Term Assurance Rider cheaper than buying a standalone term plan for the same cover?

The LIC New Term Assurance Rider costs around ₹9,550 per year for a 30-year-old with ₹25 lakh cover over a 30-year term. For roughly ₹1,000 more per year, a 30-year-old non-smoking male can buy a standalone ₹1 crore pure term plan with coverage till age 60 from a top insurer. HDFC Life's Click 2 Protect Supreme Plus costs ₹10,669 per year, ICICI Prudential's iProtect Smart Plus costs ₹10,616, and Axis Max Life's Smart Term Plan Plus costs ₹10,854. All premiums are second-year premiums, excluding first-year discounts.

That small premium difference gets you 4 times the cover, a policy that stands independently without being tied to another plan staying active, and a pure term plan from an insurer with a stronger claim settlement track record.

Are LIC New Term Assurance Rider premiums eligible for tax benefits?

Rider premiums qualify for a deduction under Section 123 of the Income Tax Act (previously Section 80C) under the old tax regime only, within the same ₹1.5 lakh annual ceiling that applies to your base policy premium. The rider does not get its own separate deduction headroom. If your base policy premium already exhausts the ₹1.5 lakh limit, the rider premium adds no further tax benefit. The death benefit paid out under the rider is fully exempt under Section 11 read with Schedule II, Sr. No. 2 (previously Section 10(10D)), and this exemption applies unconditionally under both the old and new tax regimes.

Who should consider the LIC New Term Assurance Rider?

There are three situations where this rider makes a reasonable case for itself. First, if you are already buying a non-linked LIC plan at inception and want additional cover at a young age and for a short term, where the leverage can still be 50 times or more, the rider is a low-friction way to top up. Second, if your standalone term insurance application was declined or loaded with an extra premium due to health reasons, the rider may be underwritten more leniently as an add-on to an existing policy. Third, if you need a small, specific top-up for a defined short-term liability and value the administrative simplicity of adding it to an existing policy over buying a separate plan. Outside these three scenarios, a standalone term plan almost always offers better cover at a lower cost per rupee of sum assured.

Last updated on: 2 Aug, 2026

LIC New Term Assurance Rider: Features Guide