LIC Term Insurance: Complete Guide (2026)

If you’ve grown up in India, LIC probably already lives rent-free in your head. Your parents swore by it. Your LIC agent uncle made it sound like the only sensible choice. And somewhere deep down, you might feel that a policy from LIC is somehow more real than one from any private insurer.

That instinct isn’t irrational; it’s just incomplete. LIC is a genuine heavyweight: 68 years old, government-backed, with a branch in practically every corner of the country. But the term insurance market has changed substantially in the last decade. Private insurers have caught up (in some ways surpassed LIC) and the smart buyer in 2025 deserves the full picture before signing anything.

This guide gives you that picture. We cover LIC’s full term plan lineup, its track record on claims, where it genuinely excels, and where you’d be better off looking elsewhere.

Sources: IRDAI Handbook on Indian Insurance Statistics FY 2024-25; IRDAI Annual Report 2023-24, filed Feb 2026 with BSE/NSE)

LIC’s Term Insurance Plans

As of February 2026, LIC offers five individual pure-term plans, segmented by cover amount and buyer profile. Two additional plans (Digi Credit Life, Yuva Credit Life) are designed specifically for loan protection and are not covered here.

Standard plans: for all buyers (age 18–65)

These are LIC’s flagship individual term plans with no upper limit on cover.

Youth plans: for buyers under 45 (age 18–45)

Launched in August 2024, Digi Term and Yuva Term mirror the standard plans but are capped at ₹5 crore and restricted to buyers entering before age 45.

High-value plan: Bima Kavach (Plan 887)

Launched in December 2025, Bima Kavach is LIC’s newest term plan and its first aimed explicitly at higher-income buyers. The minimum cover is ₹2 crore with no upper limit, and the policy term can extend up to 100 years, making it effectively a whole-life protection plan for buyers who want it.

Its standout feature is the Life Stage Option: policyholders can increase their sum assured at key life events (marriage, birth of first child, birth of second child) without fresh underwriting. This is a meaningful differentiator that most LIC plans (and many private plans) don’t offer.

Bima Kavach is worth considering if you need ₹2 crore+ cover and want the flexibility to increase it later without re-underwriting. If your cover need is below ₹2 crore, New Tech Term or New Jeevan Amar is the more practical choice.

*Subject to underwriting approval above threshold amounts. The Increasing death benefit option raises the sum assured by 10% of the basic sum assured each year from Year 6 to Year 15, after which it remains constant at twice the original sum assured.

LIC also offers Saral Jeevan Bima, an IRDAI-mandated standard product with simplified underwriting, capped at ₹25 lakh. It is not adequate as a primary term plan for most earning adults but serves buyers who need basic cover with minimal documentation.

LIC’s Claim Track Record

For most buyers, this is the number that matters most. Can LIC be trusted to actually pay when it’s needed?

The short answer: yes, consistently. LIC has maintained a consistently high claim settlement record. Its individual death CSR for FY 2023-24 (per IRDAI) is 98.15%, per IRDAI Annual Report 2023-24.

Source: FY 2020-21 to FY 2023-24 from IRDAI Handbook on Indian Insurance Statistics. FY 2023-24 figure (98.15%)) from IRDAI Annual Report 2023-24), which includes unclaimed amounts brought back per IRDAI regulations.

Three things worth understanding about this number:

1. Scale matters here. LIC paid ₹24,420 crore in individual death claims in FY 2024-25 alone. That’s not a number — that’s real families getting real money. A 98.15% CSR at that volume is operationally difficult to sustain. Smaller insurers with 99%+ CSRs are working with a fraction of LIC’s claim volume.

2. The trend is slightly downward. IRDAI Handbook data for FY 2020-21 through FY 2023-24 shows a slight dip (98.74% to 98.24%), and the FY 2023-24 IRDAI figure of 98.15% continues that slight downward drift. The IRDAI Handbook methodology calculates CSR as claims paid divided by (claims paid plus claims repudiated), excluding pending claims.

3. LIC’s CSR (per IRDAI) is now competitive with top private insurers. At 98.15%, LIC’s own audited CSR for FY 2024-25 places it in the same bracket as leading private players. The IRDAI Handbook figure (which uses a different methodology) is lower, but the gap with private insurers is narrower than previously assumed.

Where LIC Has a Genuine Edge

Government backing. The Government of India owns 96.5% of LIC. This is the closest thing to a sovereign guarantee that exists in Indian insurance. No private insurer can offer this. For buyers who equate stability with government ownership, this is a real, substantive advantage, not just perception.

Physical reach. With 4,800+ offices and 13.47 lakh active agents, LIC can service a policy in places where most private insurers exist only as apps or call centers. For buyers in Tier 2/3 cities or those who value face-to-face interaction, this matters.

68 years of operating history. LIC has been settling claims since 1956 — through wars, economic crises, and pandemics. The institutional memory and operational infrastructure built over nearly seven decades is genuinely difficult to replicate.

Solvency headroom. A solvency ratio of 2.19 against a regulatory minimum of 1.50 means LIC carries significant surplus capital. This is a meaningful financial safety cushion.

Where to Look Before You Sign

CSR is competitive but no longer unique. LIC’s CSR of 98.15% (FY 2023-24) is strong and places it among top-tier insurers. Several private players report similar or marginally higher ratios. CSR alone is no longer a differentiator for any single insurer in the top bracket.

The online experience is functional, not exceptional. LIC’s Tech Term is available online, but the digital purchase process (from quotes to medical scheduling) is less streamlined than pure-play digital insurers. Not a dealbreaker, but factor it in if convenience matters to you.

Agent dependency for Jeevan Amar. Jeevan Amar (Plan 955) is agent-only, but buyers who prefer online purchase have an equivalent option: Digi Term (Plan 876, for under-45s) and New Tech Term (Plan 954, for all ages) offer the same product structure through licindia.in. You do not lose access to LIC’s term coverage by choosing the online route. That said, if you do buy through an agent, do your own homework: a good agent will help you right-size your cover, but a less diligent one may push higher premiums or inadequate cover.

Limited rider options. LIC’s term plans offer fewer riders than many private insurers. If you want critical illness cover, waiver of premium on disability, or an income payout death benefit option, you’ll find more flexibility with private players.

Who Should Consider LIC Term Insurance

LIC is a strong fit if you:

• Place high value on government backing and institutional stability above all else
• Live in or frequently travel to a Tier 2/3 city where branch access is genuinely useful
• Prefer dealing with a human agent over an app or call center
• Have a relatively straightforward insurance profile (non-smoker, no major medical history, standard occupation)
• Want a cover of ₹25L–₹1 crore and don’t need complex product structuring

LIC may not be the optimal choice if you:

• Are comparing on price alone. Run the numbers, as some private insurers price more competitively for identical profiles
• Prefer a fully digital purchase and servicing experience end-to-end
• Want riders beyond accidental death benefit. Critical illness cover, income payout options, and waiver of premium on disability are more readily available with private players

How This Decision Plays Out: An Illustrative Scenario

The following is a fictional scenario to illustrate how a real buyer might weigh these factors.

Ramesh is 35, a software engineer in Nagpur, married with two school-age children. His family income is ₹18 lakh a year. He’s comparing LIC Jeevan Amar against two private insurer options.

His parents strongly prefer LIC. “Isko kaun haraega?” his father says. LIC’s agent in their colony has been servicing the family’s policies for 22 years.

Ramesh does his homework. He checks the CSR data: LIC at 98.15% (per its own filing), his top private option at 99.7%. He calculates the premium difference: the private insurer is around 12% cheaper for the same ₹1 crore cover over 30 years. He reads about the claim process for both.

In the end, Ramesh goes with LIC Jeevan Amar. Not because it’s objectively the “best” option; he knows it’s not the cheapest or the highest-CSR insurer. He picks it because his family already has a trusted relationship with the LIC agent, because he wants his wife to have a face she can walk into an office and see if something happens, and because the 1% difference in CSR doesn’t change his confidence in LIC’s ability to pay.

That’s a legitimate decision. So would choosing the private insurer. What matters is that Ramesh made it with eyes open.

What Should You Do Next?

Before you decide, three things worth doing:

1. Calculate how much cover you actually need. Whether you go with LIC or anyone else, an undersized policy is worse than no policy. Use our Coverage Calculator to get a proper number based on your income, loans, and dependants.
2. Compare premiums for your profile. LIC’s online premiums for Tech Term are publicly available on licindia.in. Compare against two private options before deciding. A ₹1 crore policy premium difference of ₹3,000–₹5,000/year over 30 years is ₹90,000–₹1.5 lakh. Worth knowing.
3. Read the comparison guides. We’ve put together a detailed comparison of India’s top term insurers if you want a side-by-side view before committing.

Frequently Asked Questions

Is LIC term insurance better than private insurers?

Neither is categorically “better”; they suit different buyers. LIC’s advantages are government backing, physical reach, and 68 years of operating history. Private insurers often offer higher CSRs, lower premiums, and more product variety. Your decision should depend on what you weight most.

What is LIC’s Claim Settlement Ratio for 2024-25?

LIC’s Claim Settlement Ratio (CSR) for FY 2024-25 is 98.15%, as per LIC’s Corporate Presentation (9M FY2026, filed with BSE/NSE in February 2026). This is for individual death claims and includes unclaimed amounts brought back per IRDAI regulations.

Can I buy LIC term insurance online?

Yes. Three LIC term plans are available online at licindia.in: New Tech Term (Plan 954), Digi Term (Plan 876, for buyers under 45), and Bima Kavach (Plan 887, minimum ₹2 crore). New Jeevan Amar (Plan 955) and Yuva Term (Plan 875) are sold through LIC agents only.

What is the minimum sum assured in LIC term insurance?

It depends on the plan. New Jeevan Amar: ₹25 lakh. New Tech Term, Digi Term, and Yuva Term: ₹50 lakh. Bima Kavach: ₹2 crore. Saral Jeevan Bima: ₹5 lakh (capped at ₹25 lakh). For most working adults, New Tech Term or New Jeevan Amar is the practical starting point.

Does LIC term insurance have a maturity benefit?

No. All five of LIC’s pure-term plans are risk-only covers with no maturity or survival benefit. The entire premium goes toward providing the death benefit. If you’re looking at LIC products that return premiums on survival (such as endowment or ULIP plans), those are different and significantly more expensive products.

What is LIC’s solvency ratio and why does it matter?

LIC’s solvency ratio is 2.19 as of December 2025, against IRDAI’s minimum requirement of 1.50. The solvency ratio measures an insurer’s ability to meet its long-term obligations. A higher ratio indicates a larger financial buffer. LIC’s 2.19 means it holds significantly more capital than the regulatory minimum requires.

Related Reading

• LIC term insurance plans: which one should you pick?
• HDFC Life Term Insurance: Full Guide
• ICICI Prudential Term Insurance: Full Guide
• SBI Life Term Insurance: Full Guide
• Tata AIA term insurance: complete guide (2026)
• Bajaj Allianz term insurance: complete guide (2026)

Browse all our LIC term insurance articles for more guides and analysis.

CSR methodology: All Claim Settlement Ratios on this page use the IRDAI Handbook formula: Claims Paid ÷ (Claims Paid + Claims Repudiated + Claims Rejected), by policy count. Pending claims and unclaimed amounts are excluded from the denominator. Source: IRDAI Handbook on Indian Insurance Statistics.