LIC Term Insurance Plan Review

Picture this — LIC is older than independent India’s first color TV, the first Maruti on the road, and probably your dad’s first paycheck. Since 1956, LIC has safeguarded the dreams of over 29 crore Indians, making it much more than just an insurer — it’s a national institution. With 5,000+ branches and a vast agent network, LIC has become a familiar presence in every city, town, and village. It’s not just big — it’s a financial giant, managing assets of over ₹52 lakh crores. Known for its stellar claim settlement record, LIC remains the go-to name for trusted insurance. From digital-first plans to traditional policies, LIC continues to evolve while staying rooted in India’s financial DNA.

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Overview

Metrics of LIC Life Insurer

For generations, LIC has been a symbol of financial security for Indian families. Traditionally, LIC policies were seen as a way to leave behind a legacy, ensuring children and loved ones were protected after the policyholder’s passing. But as financial awareness grew across the country, LIC expanded its offerings beyond simple life cover.

Today, LIC caters to a wide spectrum of needs, from wealth creation to pure protection. Its savings and investment plans, like endowment policies and ULIPs, help policyholders grow their wealth while enjoying life cover, though market-linked products like ULIPs come with an element of risk tied to market performance. On the other hand, LIC’s term plans, such as Tech-Term and Jeevan Amar, focus solely on protection. These plans don’t offer maturity benefits or returns, but they guarantee a lump-sum payout to the nominee in the unfortunate event of the insured’s death, offering families a vital financial cushion.

Claim Settlement Ratio of LIC Life Insurer

One of the most important metrics to consider when choosing a life insurance provider is its Claim Settlement Ratio (CSR). This tells you what percentage of claims the insurer successfully pays out in a year and is calculated as:

(Total number of claims settled by the insurer in a year / Total number of claims received in that year) × 100

A strong CSR reflects the insurer’s ability to honor its promises, and since life insurance deals with large sums assured, you want a company with a consistently excellent record. Generally, a CSR above 97% is considered very good. It’s also wise to review the insurer’s performance over the past three years and compare it to the industry average to gauge consistency.

Here’s how LIC stacks up:

Insight: LIC’s average CSR of 98.55% over the last three years comfortably beats the industry average, reaffirming its reputation as a highly dependable insurer. With its legacy of trust and a track record of settling claims efficiently, LIC remains one of the most reliable life insurance providers in India.

Amount Settlement Ratio of LIC Life Insurer

While the Claim Settlement Ratio (CSR) tells you how many claims an insurer has settled, it doesn’t reveal the actual value of claims paid. Think about it — what if an insurer boosts its CSR by paying off dozens of small claims but quietly rejecting a few big ones? That’s where the Amount Settlement Ratio (ASR) comes in — it helps you see the complete picture.

The ASR is calculated as:

(Total amount of claims settled / Total amount of claims filed) × 100

A high ASR (typically 90% and above) is a strong indicator of the insurer’s financial strength and its intent to settle both small and large claims fairly. It essentially shows whether the insurer honors the value of claims, not just the count.

Here’s how LIC’s ASR has performed over the past three years:

Insight: LIC has consistently maintained an ASR above the industry average over the past three years, underscoring its financial strength and fairness in settling both small and high-value claims. With an average ASR of 95.5%, LIC reinforces its image as a dependable insurer that doesn’t shy away from honoring substantial payouts — a reassuring sign for policyholders.

Complaints Volume of LIC Life Insurer

When considering a term insurance plan, it’s crucial to check an insurer’s complaint volume. Since most complaints tend to revolve around issues like claim delays, settlement hassles, or poor service, the complaint volume gives a good picture of the insurer’s overall service efficiency and customer experience.

Insight: LIC’s complaint volume has been improving over the past three years, with an average of 7.3 compared to the industry median of 15 — a positive sign for a public sector insurer often criticized for service quality issues. But it’s worth remembering: LIC is still a PSU, and that comes with its share of legacy challenges. And while the numbers look good, one truth remains — LIC’s term insurance offerings are far from comprehensive, with limited flexibility and add-ons compared to private players.

LIC Term Insurance Plans

LIC Digi Term (Plan 826)

LIC Digi Term is an online-only pure protection plan designed to offer comprehensive life cover at affordable premiums. It ensures your family’s financial security in case of your untimely demise, with flexibility in cover and payment options. The plan is available to young buyers and offers two variants—level cover and increasing cover, allowing you to tailor the death benefit as per your needs.

Key Highlights of LIC Digi Term (Plan 826):

• The minimum entry age is 18 years, and the maximum is 45 years.
• The policy term can go up to 40 years or until age 75, whichever comes earlier.
• Premium payment terms include Single Pay, Regular Pay, 10 Pay, or 15 Pay.
• The sum assured ranges from ₹50 lakh to ₹5 crore, with higher amounts requiring reinsurer approval.
• Premiums can be paid on a half-yearly or yearly basis.
• There are two variants: Level Cover, where the sum assured stays flat, and Increasing Cover, where it increases by 10% annually from year 6 to year 15 (up to 200%) and then remains constant.
• Optional riders like critical illness, waiver of premium, accidental death, and accidental disability are not available.
• Special features include no discounts for salaried or digital buyers and no early exit or life stage upgrade benefits.

LIC New Tech-Term (Plan 954)

LIC New Tech-Term is a robust online plan offering high coverage and flexible tenure, suited for buyers up to 65 years of age. With no upper limit on sum assured, it’s an excellent option for those seeking large cover amounts and the convenience of digital purchase.

Key Highlights of LIC New Tech-Term (Plan 954):

• The minimum entry age is 18 years, and the maximum is 65 years.
• The policy term can go up to 40 years or until age 85, whichever is earlier.
• Premium payment terms include Single Pay, Regular Pay, or Limited Pay (policy term minus 5 or 10 years).
• The minimum sum assured is ₹50 lakh, with no upper limit.
• Premiums can be paid on a half-yearly or yearly basis.
• The plan offers two variants: Level Cover and Increasing Cover, where the sum assured rises by 10% annually from year 6 to year 15, up to a maximum of 200%.
• An optional Accident Benefit Rider is available, providing an additional sum assured in case of accidental death, either during the premium payment term or up to age 70.
• Special features include no discounts, no early exit options, and no terminal illness benefits.

Riders offered by LIC Term Insurance Plans

LIC’s term insurance plans generally come with limited or no rider options, depending on the specific plan:

While LIC’s older and offline term plans like Digi Term and Yuva Term have no riders, the newer New Tech-Term and New Jeevan Amar plans offer the Accident Benefit Rider to enhance protection. However, LIC does not offer critical illness, waiver of premium, or disability riders across these term plans.

Should You Opt For LIC Term Insurance Plans?

If you’re considering LIC for term insurance, here’s a quick look at its key strengths and weaknesses to help you decide.

Pros of LIC Term Insurance

• Exceptional Brand Trust — LIC is India’s oldest and most trusted insurer, operating since 1956. With deep market penetration, a vast network of over 5,000 branches, and strong government backing, LIC commands unmatched trust across urban and rural India. For many families, “insurance” still instinctively means “LIC,” making it a safe choice for first-time buyers. (PK: LIC term insurance plan review)
• High Claim Settlement Ratio (CSR) — With an average CSR of 98.55% over the past three years, LIC consistently delivers on its core promise — settling claims smoothly. This figure reflects LIC’s financial strength and operational stability, which are critical when families depend on timely payouts.
• Low Complaint Volume (CV) — LIC has reported an average complaint volume of just 7.3 over the last three years, compared to an industry median of 15. While this shows a positive trend, it’s worth noting that some level of service-related complaints is expected for a public sector unit (PSU). That said, LIC’s numbers have been improving, signaling better customer support systems in recent years.
• High Business Volume — With an average business volume of ₹2,17,726 crores (2021–2024), LIC operates at a scale unmatched by private insurers. This massive business footprint means strong financial reserves and deep operational experience, reassuring factors when choosing a long-term insurance partner.
• Flexible Plan Structures — LIC’s term insurance plans, such as the New Tech-Term, offer flexibility to match diverse needs. Buyers can choose between level cover (fixed sum assured) or increasing cover (sum assured grows over time), along with single, regular, or limited premium payment options. This makes LIC suitable for both conservative and growth-focused buyers. (SK: LIC Digi Term review)
• High Amount Settlement Ratio (ASR) — LIC’s ASR of ~95.5% over the last three years is roughly on par with the industry, demonstrating its ability to honor even large claims — an important metric when you’re insuring for ₹50 lakh or more.

Cons of LIC Term Insurance

• Limited Online Transparency — Unlike most private insurers, LIC’s digital platforms still lack intuitive plan comparisons, instant premium quotes, and seamless online buying journeys. This can make the purchase process feel outdated, especially for younger, tech-savvy buyers who expect digital convenience.
• Few Rider Options — LIC’s term plans generally offer only an Accidental Benefit Rider, with no options for critical illness, waiver of premium, or income benefit riders. For buyers looking to customize their coverage with comprehensive add-ons, this can feel restrictive, especially compared to private insurers offering a wide rider portfolio.
• Higher Premiums — LIC’s premiums are often on the higher side compared to private players offering similar term plans. While part of this cost comes from its trusted legacy and PSU structure, cost-conscious buyers may find better value with private insurers without compromising on coverage.

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Conclusion

In conclusion, LIC’s impressive Claim Settlement Ratio and long-standing reputation make it a reliable choice for life insurance. Its diverse range of term plans, especially for young professionals, offers substantial coverage and flexibility. However, the absence of additional riders in some plans and limited customization options might be a drawback for those seeking more tailored coverage. Overall, LIC remains a strong contender in the market, particularly for individuals seeking stability and trust, but those looking for more dynamic and customizable options may want to explore other insurers as well.