LIC Term Insurance Vs. HDFC Life Term Insurance

LIC Term Insurance Vs. HDFC Life Term Insurance

Navigating the pros and cons of different types of life insurance can be puzzling, especially when someone is buying their first policy. While whole life insurance offers coverage till death, term insurance can prove a better option for some individuals, particularly for young families, due to its higher affordability and temporary coverage. 

Though there are a multitude of term insurance providers in India, LIC and HDFC Life are well-known for their reliable term insurance offerings and positive customer experiences. LIC is a government-owned insurance company and HDFC Life is a leading private life insurance company in India. However, choosing between them can be a daunting task, especially with multiple options for term insurance available on their sites.

This post will highlight some of the crucial parameters to figure out the differences between LIC Term Insurance and HDFC Life Term Insurance so that the readers can make a wise decision on what suits them.

Comparison Between LIC Term Insurance & HDFC Life Term Insurance

ParametersLIC Term InsuranceHDFC Life Term Insurance
Claim Settlement Ratio (FY 2021-22, Life Insurance)
  • Individual Death Claims: 96.02%
  • Group Death Claims: 98.47%
  • Individual Death Claims: 89.38%
  • Group Death Claims: 95.40%
Entry Age18 To 65 Years
Number Of Term Plans48
CoverageRs. 5 Lakhs To No LimitRs. 50 Lakhs To Rs. 5 Crore Term Insurance
Rider Options
  • LIC’s Accident Benefit Rider
  • LIC’s Accidental Death & Disability Benefit Rider
  • HDFC Life Income Benefit On Accidental Disability Rider
  • HDFC Life Critical Illness Plus Rider
  • HDFC Life Protect Plus Rider
  • HDFC Life Health Plus Rider
  • HDFC Life Accidental Death, Disability & Dismemberment Rider

Note: The ‘HDFC Life Term with Return of Premium’ plan does not come with any riders.

Claim Payout TimeWithin 7 Working Days
Return Of Premium OptionNot AvailableAvailable
Mobile App SupportAvailableAvailable
Death BenefitAvailable With All PlansAvailable With All Plans
Maturity BenefitAvailable With Only LIC Jeevan Kiran Sales PlanAvailable With A Few Plans Only
Loan FacilityNot Available
Grace Period
  • For LIC Saral Jeevan Bima: 15 Days (For Monthly Premiums) & 30 Days (Yearly Or Half-Yearly Premium)
  • For Remaining Plans: 30 Days
  • For Monthly Premium: 15 Days
  • For Other Cases: 30 Days

Note: The CSRs (Claim Settlement Ratios) have been taken from the latest IRDAI report.

About LIC Term Insurance

LIC term insurance products offer financial protection to policyholders and their families in the event of the insured’s demise during the policy term. They are available under various names, including LIC Saral Jeevan Bima, LIC Jeevan Kiran, LIC New Tech Term, and LIC New Jeevan Amar. 

All of these term insurance plans from LIC are specifically designed to offer pure life cover without any investment or savings component. They generally come with flexible policy terms ranging from a minimum of 5 years to a maximum of 40 years, depending on the specific plan chosen.

About HDFC Term Insurance

Term insurance plans from HDFC Life offer financial protection to the policyholders and their loved ones. They come under different names, such as HDFC Life Click 2 Protect Super, HDFC Life Click 2 Protect Elite, HDFC Life Sanchay Legacy, and HDFC Life Saral Jeevan Bima, to name a few.

These plans offer a wide range of coverage amounts that one can choose as per their requirements and affordability. The policy term of HDFC Life term plans varies greatly from one another, for which one can refer to the available plan brochures. They also provide flexibility in premium payment, including options of regular, limited, or single pay.

Why Should One Go For LIC Term Insurance?

Here are the following reasons why one should go for LIC term insurance plans:

  • Substantial Coverage Amounts: Term insurance plans from LIC offer substantial coverage amounts to ensure that the financial needs of the policyholder’s family are adequately met in case of an unfortunate demise of the policyholder. The coverage amounts range from ‘Rs. 5 Lakhs to No Limit’ and can be chosen based on the requirements and affordability. 
  • Flexible Policy Term: LIC term insurance plans offer flexibility in choosing the policy term, which can range from a minimum of 5 years to a maximum of 40 years, depending on the specific plan. One can select a term that aligns with their financial goals and the duration of their financial responsibilities. 
  • Special Rates For Women: Some of the LIC term insurance plans provide special premium rates for women. It functions as a great financial tool to help women plan for their future needs and objectives. They may even utilize the money to fund their children’s further education, give their family security, or plan for their retirement. 
  • Rider Benefits: LIC term insurance plans may offer optional riders for additional coverage. These riders can include accidental death benefits or disability benefits, among others. 
  • Multiple Premium Payment Options: The term insurance plans from LIC also provide different premium payment options, including regular pay, limited pay, and single pay. Regular pay requires premium payments throughout the policy term, limited pay involves paying premiums for a limited period, and single pay allows the policyholders to pay the premium as a lump sum at the beginning of the policy.
  • Death Benefit: If the person insured passes away during the policy period after the coverage starts but before the maturity date, and the policy is active and the claim is valid, LIC term insurance plans offer a certain amount as ‘Sum Assured on Death’. The value of the death benefit will be based on the type of policy one has chosen. 
  • Exciting Rebates: LIC term insurance plans generally offer two types of rebates based on specific factors and conditions. 
  • High Sum Assured Rebate: In case the policyholders choose a higher sum assured or coverage amount, they may receive a rebate on the premium, whose range may go between 5% to 50%. This encourages individuals to opt for higher coverage amounts, and as a result, they receive a reduction in the premium.
  • Rebates On Mode Of Premium Payment: LIC term insurance plans also provide a rebate on the premium if policyholders choose a half-yearly or monthly payment mode. Opting for an annual premium payment mode can result in a higher premium compared to other frequency options.

Why Should One Go For HDFC Life Term Insurance?

Since term insurance plans offered by HDFC Life come with the following features and benefits, they are a preferred choice among many term insurance-seekers. 

  • Same Day Claims Processing: In case the policyholders have purchased any term insurance from HDFC Life, the company claims to settle their claims within 24 business hours. This is applicable for all claims over 3 years from the policy’s inception date. 
  • One-Day Claim Settlement: HDFC Life term insurance also offers one-day claim settlement once the claim request is approved. However, there are certain terms and conditions for the same, which one can check on the official website of HDFC Life.
  • Death Benefit: Like other term plans, they also offer a death benefit to the nominee or beneficiaries in the event of the insured’s demise during the policy term. This ‘Sum Assured on Death’ varies from one HDFC Life term plan to another. 
  • Adequate Coverage Amount: HDFC Life term insurance plans offer a wide range of coverage amounts to suit varying financial needs. One can choose a coverage amount based on their needs and budget. 
  • Return Of Premium (ROP) Option: Generally, pure term insurance does not have any option of a money-back feature or return of premium. Therefore, HDFC Life offers a term plan with ROP benefit, which is quite an attractive option for people looking for any kind of return. In this plan, the total premiums paid (except taxes) by the policyholders are paid back, provided that the policyholders have survived the policy term and all premiums have been paid. 
  • Multiple Rider Benefits: The term insurance plans from HDFC Life are equipped with multiple rider options, including critical illness rider, protect plus rider, and so on. These riders are quite helpful and can provide additional protection.

LIC Term Insurance OR HDFC Term Insurance: What’s Ideal For You?

Both LIC and HDFC Life are reputable insurance companies in India, and each has its own unique set of offerings and benefits when it comes to their term insurance plans. 

On one hand, LIC does not lay any restrictions on the maximum sum assured limit, offers wider coverage, and gives impressive rebates; on the other hand, HDFC Life boasts its varied rider options and return of premium option. If you are a person who prefers more flexibility in sum assured limit and higher coverage, then LIC term insurance plans are a great option for you. However, if you are looking for some money back and more variety of additional riders, then you should go for term insurance plans offered by HDFC Life. 

Ultimately, the best choice for a term cover will depend on your individual needs and preferences. It would be best to consult a financial advisor or an insurance agent to find the right insurance solution for you.

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