5 Common Questions Asked About LIC Policies

Life Insurance Corporation (LIC) is most preferred company to avail insurance in India. LIC offers different insurance products catering to different needs. Individuals have to choose the product which suits their needs and responsibility.

Here ares some of the common questions which people ask on Quora about LIC:

Which is the best LIC policy?

LIC offers traditional plans, endowment plans, savings plan etc., which differ in their objective. It is better to buy policy online as customers can enjoy a rebate of 1 percent by way of increase in the basic annuity rate. This is an extremely popular LIC policy.

LIC Jeevan Anand, LIC money bank plans are some of the LIC plans which offers high returns.

As per investment experts, it is better not to mix investment and insurance together for better results.

Which is better a investment LIC or Mutual Funds?

Well, both are good options if considered for the right reasons. Individuals should not mix investment and insurance together.

Buying a Life Insurance Corporation (LIC) policy offers you a life cover and investment if you opt for endowment plan and saving plan.

However, returns and risk will be comparatively less.
Buying units in mutual fund is purely for investment purpose, one cannot expect insurance cover from the mutual funds investments.

While, risk attached with such instruments will be high so as returns.

Do You Need An LIC Agent To Buy An LIC Policy?

Earlier, there were no private insurance companies as well as no online plans to buy an insurance policy.

One had to completely depend on the Life insurance Corporation (LIC) agent when in need of a LIC policy.

Even now, there are many LIC policies where you still need an insurance agent to buy them. While, there are term plans which can be bought online within few steps.

Can loan be availed LIC Policy?

Yes, LIC policyholders who have LIC policy for more than three years is eligible to avail loan. Loan amount varies depending on the policy amount and time period of the policy. This is secured loan and interest charged are less compared to other loan rates.

Incase if a policyholder fails to pay interest in the course of the term of the insurance policy or early claim, the loan amount and interest, will be deducted from the claim amount and balance will be given to the claimant.

Is there any benefit on income tax due to LIC policy?

The premium paid for life insurance policy qualifies for a tax benefit up to Rs 1.5 lakh under section 80C. Also, it qualifies under section 10(10D) death benefit of an insurance policy is tax exempted.

As per  rule, the insurer can deduct TDS of 2 per cent for policies that are taxable. Note that no TDS will be applicable for maturity proceeds which are less than Rs 1 lakh.