LIC Term Insurance Plans 2025

LIC Term Insurance Overview

LIC term insurance provides pure life protection, offering your family a guaranteed financial safety net if something happens to you. Unlike LIC’s traditional savings-linked policies, term plans such as LIC New Tech Term (Plan 954) and LIC Digi Term (Plan 876) focus purely on risk cover, not returns.

Both are non-linked, non-participating pure protection plans that can be purchased online directly via LIC’s website. With LIC’s unmatched brand trust, massive scale of over 60% market share, a claim settlement ratio of 98.35%, and a solvency ratio of 2.0 (comfortably above IRDAI’s 1.5 threshold), these plans stand out for financial reliability and simplicity.

Introduction

LIC has long been the go-to name in life insurance for millions of Indians, built on trust, legacy, and a track record of paying claims promptly. While the insurer is best known for its traditional endowment and money-back policies, its term insurance plans are now gaining popularity among modern buyers.

In this article, we’ll break down everything you need to know about LIC Term Insurance in 2025: the types of plans available, their key benefits, the claim settlement process, exclusions, and how they compare with some other private insurers.

Confused between LIC and other term plans? Let Ditto’s advisors help you find the best fit for your needs.

Types of LIC Term Insurance

Here, we’re focusing only on LIC’s flagship and actively marketed term insurance plans that are the ones most relevant for new buyers today.

1) LIC Digi Term Plan (Plan 876)

A 100% digital, non-participating, pure protection plan, simple, flexible, and designed for the online generation.

Key Features:

• Eligibility: 18–45 years (last birthday).
• Policy Term: 15 to 40 years
• Maturity Age: Up to 75 years.
• Sum Assured: ₹50 lakh to ₹5 crore (higher S.A. subject to reinsurer approval).
• Premium Options: Single, Regular, Limited (10 or 15 years).
• Payment Frequency: Annual or half-yearly.
• Death Benefit Options:
  • Level Sum Assured, where the sum assured remains fixed throughout.
  • Increasing Sum Assured, where the cover increases by 10% every year from the 6th to 15th policy year, doubling by the 16th year.

Example: If your base cover is ₹1 crore, it remains at ₹1 crore for 5 years, then grows to ₹1.1 crore in the 6th year, ₹1.2 crore in the 7th, and so on, until it reaches ₹2 crore by the 15th year.

Premium Comparison:

Insight: Compared to Ditto’s recommended private insurers, LIC’s premiums are mid-range, slightly higher than ICICI Prudential and Axis Max Life, but marginally lower than HDFC Life.

2) LIC New Tech Term Plan

A non-linked, non-participating, pure risk plan, also sold exclusively online. It offers broader eligibility, an optional rider, and flexible payout options.

Key Features:

• Eligibility: 18–65 years (last birthday).
• Maturity Age: Up to 80 years.
• Policy Term: 10 to 40 years.
• Sum Assured: ₹50 lakh onwards (no maximum limit; subject to underwriting).
• Premium Payment: Single, Regular, or Limited (Policy Term – 5 years / Policy Term – 10 years).
• Payment Frequency: Yearly or half-yearly.
• Death Benefit Options:
  • Option I: Level Sum Assured, implying a constant cover.
  • Option II: Increasing Sum Assured, implying an increase of 10% annually from year 6 to 15, doubling thereafter (Same as Digi term).

Additional Options:

• An Accident Benefit Rider (UIN 512B203V03), which adds an extra payout in case of accidental death, available during the premium-paying term or until age 70, whichever is earlier.

Benefits of LIC Term Insurance

01

Trusted Brand Legacy

India’s most recognised life insurer since 1956.

02

Financial Strength

Government-backed credibility and strong solvency ratio.

03

Flexible Coverage Options

Choice between Level and Increasing Sum Assured.

04

Attractive Rebates

Higher coverage attracts premium discounts up to 37%.

05

Online Convenience

Both plans can be purchased entirely online.

06

Non-Smoker & Female Discounts

Lower premiums for healthier and female lives.

07

Installment Flexibility

Option to receive the death benefit over time for better financial planning.

Considerations: LIC’s term plans cover the basics well and provide reasonable flexibility, but they clearly lag behind private insurers in innovation. Features like in-built terminal illness cover, quick claim payouts, special exit benefits, and life-stage upgrades are missing. Likewise, LIC offers fewer rider options, no waiver of premium, critical illness, or accidental disability covers, which limits customization for today’s diverse customer needs.

Claim Settlement Process for LIC Term Insurance

LIC’s complaint volume of 4.5 per 10,000 claims is among the lowest in the industry, a strong indicator of smooth claim experiences.

Inclusions and Exclusions of LIC Term Plans

Inclusions:

• Death due to natural causes, illness, or accidents. (within the policy term).
• Accidental death (if Accident Benefit Rider is chosen under New Tech Term).

Exclusions:

• On suicide within 12 months of policy start or revival, only 80% of premiums are refunded.
• Deaths during illegal acts like theft or evading the law are not covered.
• Extreme or hazardous sports deaths (e.g., paragliding, diving) are excluded unless declared and approved.
• Death due to intoxication or drug abuse is not payable.
• Undisclosed pre-existing illnesses lead to rejection of the claim if deliberate concealment/fraud is proven.
• Self-inflicted injuries leading to death are excluded under accidental riders.
• Death due to war, terrorism, or riots is excluded if the insured was an active participant.
• In homicide cases under investigation, the payout is withheld until the nominee is cleared.

Ditto’s Take: These exclusions promote transparency and prevent fraud, so make honest health disclosures and read your policy carefully to avoid claim issues later.

Why Talk to Ditto for Term Insurance

At Ditto, we’ve assisted over 8,00,000 customers with choosing the right insurance policy. Why customers like Shikhar below love us:

✅No-Spam & No Salesmen

✅Rated 4.9/5 on Google Reviews by 15,000+ happy customers

✅Backed by Zerodha

✅Dedicated Claim Support Team

✅100% Free Consultation 

Confused about the right term insurance? Speak to Ditto’s certified advisors for free, unbiased guidance. Book your call now, slots fill up fast!

Conclusion

LIC Term Insurance is a solid, trustworthy choice with reliable claim support, though not a Ditto partner insurer. There’s nothing wrong with LIC; its plans are dependable but could be more flexible and feature-rich.

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