LIC Term Insurance

LIC’s recent bonus share announcement grabbed headlines, reinforcing its dominance in India’s financial landscape. But beyond the buzz lies an important question: is LIC still the best choice for term insurance?

Now that the insurance landscape has changed, private insurers offer lower premiums, better riders, and more flexible payout options. While LIC still carries unmatched brand trust, its term insurance offerings don’t always keep pace with what modern buyers expect.

In this guide, we break down LIC term insurance plans, compare them with top term insurers in India, and help you decide what truly fits your needs.

Note: The above metrics are for the insurer's entire life insurance portfolio, including ULIPs, savings plans, and term insurance. 

Key Insights: 

• LIC’s CSR is slightly below the industry average. In comparison, insurers like Axis Max Life Insurance report 99.62%, indicating marginally better claim consistency.
• A strong ASR suggests that LIC settles claims fairly, which is an important factor for high-value covers.
• Despite its large scale, LIC has significantly fewer complaints, reflecting smoother claim handling.
• While LIC’s solvency ratio is slightly below the industry median, it is still well above IRDAI’s minimum requirement of 1.5x. 
• Its massive annual business and claim payouts reinforce reliability, but scale alone doesn’t guarantee product competitiveness.

Top Term Plans Offered by LIC

1) LIC New Tech Term 

LIC New Tech Term is LIC’s flagship term plan, offering level and increasing sum assured options. Available only online, it allows policyholders to choose between regular and limited premium payment terms, with coverage extending up to age 80 in some cases. The plan has an entry age between 18 to 65 years and offers a minimum sum assured of ₹50 lakh. 

2) LIC Digi Term 

LIC Digi Term is LIC’s fully online term plan designed for digital buyers. It offers a level sum assured, with options to increase cover over time, making it suitable for individuals expecting income growth. The plan has an entry age between 18 to 45 years and includes flexible premium payment terms along with an option to take the death benefit as installments.

Riders Available in LIC Term Insurance Plans

Accidental Death Benefit Rider: This is the primary (and in most cases, the only) rider available with LIC term plans. It provides an additional amount on top of the base sum assured if the policyholder dies in an accident. The rider is typically available for a fixed term (often up to age 70), and the payout is triggered only if death results directly from an accident within a specified time window (usually 180 days). 

LIC offers other riders as well. However, their availability with term plans is not guaranteed. You can check more details on their official website.

If you’re comparing the best performers, our guide on the top insurance companies in India highlights why companies like Axis Max Life and HDFC Life outperform LIC despite the latter’s dominance in the insurance industry. 

For this example, we’ve considered profiles of healthy, non-smoking salaried individuals living in a tier-1 city like Delhi (pin code: 110010) and covered for a sum assured of ₹1 crore until age 65. The above premiums are indicative only and may vary based on your age, add-ons, health conditions, lifestyle choices, and underwriting decisions. 

Key Takeaway: LIC premiums are around 30-80% higher than those of private insurers such as Axis Max Life and HDFC Life for similar coverage amounts. This gap becomes more pronounced in higher-cover brackets, such as LIC term insurance ₹1 crore plans. 

Who Should Opt for LIC Term Insurance?

You can choose LIC term insurance if you value trust and a long-standing reputation. It’s a good fit if you want a simple, no-frills life cover without too many add-ons. If you’re okay paying a bit more for reliability and prefer agent support or offline service over fully digital processes, LIC offers a comfortable, familiar, and straightforward option.

Who Might Not Find LIC Ideal?

• Price-Conscious Buyers: If your goal is to maximize coverage at the lowest premium, many private insurers will typically offer better pricing. Instead, you can check out iProtect Smart Plus from ICICI Prudential. 
• People Wanting Customization: Modern term plans such as Click2Protect Supreme Plus and Smart Term Plan Plus often include multiple rider options (critical illness, waiver of premium, etc.), built-in benefits like terminal illness and instant payout on claims, and a better digital experience.
• Younger, Digitally Savvy Buyers: If you prefer quick online comparisons and app-based servicing, private insurers usually have an edge.

Why Choose Ditto for Term Insurance?

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

• No-Spam & No Salesmen
• Rated 4.9/5 on Google Reviews by 15,000+ happy customers
• Dedicated Claim Support Team
• Backed by Zerodha
• 100% Free Consultation

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

Ditto’s Take on LIC Term Insurance

LIC is undeniably one of the most reliable insurers in India. Its scale, claim experience, and brand trust are unmatched. However, LIC’s term plans often come with relatively higher premiums that don’t fully justify the overall offering, especially given the limited customization through riders and the lack of certain basic in-built features available with newer insurers. 

If you’re evaluating options using a LIC term insurance calculator, it’s worth comparing across insurers because there is a high chance that you’ll find better value elsewhere. You can also check out our detailed guide on the best term insurance plans in India to find a more suitable policy.