Introduction
When it comes to buying term insurance in India, one common question is:
Should I buy a LIC term plan or choose a private insurance company?
LIC (Life Insurance Corporation of India) is a government-owned insurer with a strong legacy, while private companies offer modern features and competitive pricing. So, which is better for your needs?
Let’s compare LIC term plan vs private insurers across multiple factors to help you make a smart choice.
What is a Term Plan?
A term plan is a pure life insurance product that provides financial protection to your family in case of your untimely death. It offers high coverage at an affordable premium, with no maturity benefit if the policyholder survives the term.
LIC Term Plans – Overview
Trust and Legacy
LIC is India’s oldest and most trusted insurance company. Established in 1956, it is backed by the Government of India and has a strong customer base, especially in rural and semi-urban areas.
Popular LIC Term Plans
- LIC Tech Term Plan (Online)
- LIC Jeevan Amar (Offline)
These plans offer basic life cover, optional riders, and different payout options.
Private Term Plans – Overview
Modern and Flexible
Private insurance companies like HDFC Life, ICICI Prudential, Max Life, and Tata AIA offer term plans with more flexible options, quicker online services, and competitive premiums.
Popular Private Term Plans
- HDFC Click 2 Protect Life
- ICICI iProtect Smart
- Max Life Smart Secure Plus
- Tata AIA Sampoorna Raksha Supreme
These policies offer optional critical illness riders, accidental death cover, and premium return options.
LIC vs Private – Key Differences
1. Claim Settlement Ratio (CSR)
| Company | CSR (2022–23) |
|---|---|
| LIC | 98.52% |
| HDFC Life | 99.39% |
| ICICI Pru | 97.90% |
| Max Life | 99.34% |
| Tata AIA | 99.01% |
Verdict: Both LIC and private insurers have strong claim ratios. Private players slightly lead in faster settlements.
2. Premium Cost
| Insurer | Annual Premium for ₹1 Cr (30 years old, Non-smoker, 30-year term) |
|---|---|
| LIC (Tech Term) | ₹13,000 – ₹15,000 approx. |
| HDFC Life | ₹8,000 – ₹9,000 approx. |
| ICICI Prudential | ₹8,500 – ₹9,500 approx. |
Verdict: Private insurers offer lower premiums with more flexible payment options.
3. Online Process & Features
- LIC: Traditional process, limited digital options
- Private: 100% online purchase, instant quotes, digital KYC, easy claim tracking
Verdict: Private companies offer a smoother online experience
4. Riders and Add-ons
- LIC: Limited riders (accidental death, disability)
- Private: Wide range (critical illness, waiver of premium, terminal illness)
Verdict: Private term plans provide more customization
5. Customer Support & Service
- LIC: Strong offline presence, slower response time
- Private: Fast customer support via chat, email, phone
Verdict: Private insurers provide better service speed
Pros and Cons
LIC Term Plans
Pros:
- Government-backed trust
- High claim trustworthiness
- Suitable for first-time or rural buyers
Cons:
- Higher premium
- Less flexibility and online convenience
Private Term Plans
Pros:
- Lower premiums
- Better digital experience
- Multiple riders and payout options
Cons:
- Trust issue for some customers
- Varies by company — choose wisely
Conclusion
If trust and government backing are your top priorities, LIC term plans are a solid choice. But if you want affordable premiums, better online experience, and customizable features, then private term insurance plans are the better fit.
The best approach is to compare both LIC and private insurers using online platforms, check reviews, features, and choose a policy that fits your budget and family needs.
The hindu newspaper in hindi