Life is all about uncertainties but Life Insurance is a way that can save your future if you invest in the present.
What is LIC?
Life Insurance is an agreement between an individual and an insurance company; wherein the latter agrees to pay an assured sum to the family member of the policyholder at the time of death of the assured.
Working of LIC
- 1 Insurance Agreement
- 2 Premiums
- 3 Investments in securities
- 4 Settlement of claims
When you acquire insurance, the firm provides you with a document. This document specifies all of the terms and conditions after conducting rigorous background checks.
Against the assured amount, the company charges a premium that you need to pay. The premium amount depends upon multiple factors including your income, age, medical history, or the number of family members.
The amount the company earns through premiums is directly invested in government securities, corporate bonds, or stocks, and earns huge profits.
LIC settles claims using the profits earned through investments.
Eligibility Criteria for LIC Plans
|Minimum age at entry||14 years|
|Maximum age at entry||57 years (12-year Term plan) 51 years (16-year Term plan) 45 years (20-year Term plan)|
|Age at the expiry of extended-term||Maximum 75 years|
|Minimum Sum Assured||Rs 50,000|
Benefits of LIC
- 1 Death Benefits
- 2 Maturity Benefits
- 3 Rider Benefits
If the policyholder dies during the policy tenure, then the nominee is eligible to get the sum assured. It will help them achieve goals and fulfill their financial needs.
With maturity benefits, if the life assured survives, he/she is eligible to get Maturity Sum Assured plus Loyalty additions.
You can choose to enhance the scope of coverage of your base life insurance policy by purchasing a life insurance rider, which are additional coverages that come with an additional payment.
- 4 Tax Benefits
- 5 Loan Benefits
Even if the life assured is no longer alive, the benefits of a life insurance policy help the life assured family establish a safe and secure future. Furthermore, income tax benefits are obtained by investing in a life insurance policy under Sections 80C and 10(10D) of the Income Tax Act of 1961. Tax breaks are available for premiums paid on a life insurance policy.
Some life insurance policies include a loan against the policy feature that can enable a policyholder to meet immediate financial needs, such as medical treatment during any urgency, or meet financial obligations that cannot be ignored.