LIC eTerm Plan

LIC’s eTerm is a regular premium non-participating term assurance policy which caters to the family of the insured by offering them financial protection in the event of the demise of the insurance holder. It is not offered through any intermediaries but can be purchased online. This article looks at the insurance plan in detail. Also Read About - LIC Jeevan Arogya

Types of Plans

The plan offers two categories of premium rates, namely Aggregate lives and Non-smoker lives. Aggregate category rates would apply for Sum Assured of up to INR 49 lakhs. The differential premium rate for Non-smoker category would apply for Sum Assured of INR 50 lakhs and above. The application of non-smoker rates would be based on the results of a Urinary Cotinine test.

Key Features

The plan:

Is non-participating and traditional.
Offers customized premium payments for non-smokers.
Offers Death Benefit but not Maturity Benefit.

Benefits

Following are the benefits offered by the plan:

High sum assured from a minimum of INR 25 lakhs for an aggregate plan and INR 50 lakhs for non-smokers plan.
Choice of tenure for policyholders, ranging between 10 years and 25 years.
Coverage until the age of 75 years.
Tax benefits on premium payments and sum assured under Section 80C and Section 10(10D) of the Income Tax Act, 1961, respectively.

Eligibility Criteria

The following criteria of eligibility have been laid out by LIC:

Minimum age at entry – 18 years (completed)
Maximum age at entry - 60 years (nearest birthday)
Maximum cover ceasing age – 75 years (nearest birthday)
Minimum policy term – 10 years
Maximum policy term – 35 years

The policy covers insurance on personal life only, and not Key Man Insurance (KMI), Partnership, Employer-Employee cover, etc.

Payment of Premium

Premiums are to be deposited annually during the policy term. A grace period of one month but not less than 30 from the due date of premium days will be granted to late remitters.

Add-on Riders

The quantum of coverage can be increased from a minimum of INR 1 lakh, and to a maximum of INR 25 lakhs. The remitted premiums include the premium for parent policy.

Applicability of Tax

The applicability of tax and its rates will be determined as per the relevant tax laws. The sum of tax imposed must be remitted by the Policyholder on Installment premiums including extra premiums if any. Availing life insurance has its own tax benefits, click here to know more.

Cooling-off Period

If the policyholder is not satisfied with the terms and conditions of the policy, he/she may return the same within 30 days from the date of receiving the policy bond by stating the reason for the objections. The corporation, on receiving it, would cancel the policy and return the sum of premium deposited after deducting the proportionate risk premium for the period on cover, stamp duty charges, expenses for medical examination and special reports, if any.

Non-Applicability

The policy will be considered void if the Life Assured commits suicide within 12 months from the date of commencement of risk or within 12 months from the date of revival. LIC has explicitly stated that in such a scenario, it will not entertain any claim under this policy, except to the extent of 80% of the premiums paid till the date of death excluding any taxes and extra premium (if any), provided the policy is in force.

Process of Purchase

As no intermediaries are involved in the sale of this policy, it must be purchased online through the website of LIC.
After selecting the desired policy, which in this case is ‘e-term’, the user may opt for the desired Sum Assured and the Policy Term.
Basic details such as the name, age, gender, qualification, etc. must be filled.
After the details are filled in, a premium calculator will calculate the premium for the chosen parameters based on the age, gender, term, sum-assured, health and tobacco-usage. Lower premium rates are applicable for non-tobacco users if the Sum Assured is more than INR 50 lakhs.

Documents Required

The documents required for this purpose are:

Application/Proposal Form, duly filled up and submitted by the applicant.
Details of medical history.
Proof of Address.
KYC (Know Your Customer) Documents.
Medical and diagnostic tests based on the age, medical history and sum assured of the applicant.