LIC Term Insurance vs. SBI Life Term Insurance

LIC Term Insurance vs. SBI Life Term Insurance

Imagine. You’re travelling in your car alone for a vacation/business trip/solo trip. Your family is at home and you just want to spend some time alone. Suddenly, a truck came in and crashed your vehicle from behind. Now the question is- What will happen to your family after your demise? Who will pay your kids’ school fees? Who will bear their basic expenses? Well, this is where the importance of term insurance comes into play!

Term insurance is of paramount importance as it provides crucial financial security to your family at an affordable cost. In the event of your untimely demise, the term insurance ensures that your loved ones receive a lump sum amount, serving as a financial cushion. This payout can be utilized to cover daily expenses, pay off debts, and support long-term goals like children’s education.

When it comes to buying the best term insurance, you may consider two of the popular options, namely LIC Term insurance and SBI Term insurance. To streamline your decision, let’s compare each one of them in detail and find the one that suits you the best.

Comparison between LIC Term Insurance and SBI Term Insurance

Here is a deep comparison of both term insurance options in detail!

ParametersLIC Term InsuranceSBI Term Insurance
Claim Settlement Ratio (Individual Death Claims) Life insurance)The claim settlement ratio of LIC term insurance is 96.02% (As per IRDAI Report 21-22).On the other hand, SBI Life also has an impressive claim settlement ratio of 94.55% (As per IRDAI Report 21-22)
No. Of PlansThere are 4 plans under LIC term insurance.SBI Life Insurance offers 6 plans.
Tax BenefitYes, term insurance plans by LIC offer tax benefits.Yes, the tax benefit is offered by SBI Term insurance.
Entry AgeThe entry age of LIC term insurance is 18 Years.18 years is the minimum age to buy SBI term insurance.

Some of the riders are available under the LIC term insurance.

LIC’s Accidental Death and Disability Benefit Rider (UIN: 512B209V02)


LIC’s Accidental Death and Disability Benefit Rider (UIN: 512B209V02)


LIC’s Accident Benefit Rider (UIN: 512B203V03)

The following are the riders available under the SBI term insurance.

SBI Life – Accidental Death Benefit Rider

SBI Life – Accidental Total & Permanent Disability Benefit Rider

Disease CoveredThere is no disease covered under LIC term insurance.Yes, term insurance plans by SBI Life Insurance cater to a wide range of diseases.
Cashless ClaimYesYes
Multiple payout options
  • Lump-Sum Payout
  • Monthly Income
  • Lump-Sum and Income for Fixed Period
  • Lump-Sum Payout
  • Monthly Income
  • Lump-Sum and Income for Fixed Period
Claim Payout TimeWithin 7 working days.Within a week.

What is LIC Term Insurance?

LIC (Life Insurance Corporation of India) Term Insurance includes term life insurance policies offered by LIC, designed to provide financial protection and security to individuals and their families. The term insurance plans by LIC provide a death benefit to the nominee in case the policyholder passes away during the period of the term insurance. These plans come with affordable premiums, making them accessible to many individuals.

LIC offers different types of term insurance plans, including plans with increasing sum assured, plans with return of premium options, and plans with critical illness riders. The plan’s choice depends on the policyholder’s specific needs and preferences. LIC term insurance plans are known for their reliability, trustworthiness, and the financial security they provide to the policyholder’s family in case of an unfortunate event.

What Sets LIC Term Insurance Apart From the Rest?

Listed below are the features and benefits of choosing LIC Term Insurance. 

Death Benefit:

The primary benefit of the LIC Term insurance is the death benefit. The sum assured, or the coverage amount is paid as a tax-free lump sum payout to the nominee or beneficiary in the event that the policyholder passes away within the term of the policy. In the unfortunate event that the policyholder passes away too soon, this payout may offer the family financial stability.

Special Premium Rates For Non-smokers and Females:

LIC term plans promote quitting smoking and offer exclusive discounts to non-smokers in an effort to promote a healthy lifestyle. Additionally, females receive special premium rates on LIC’s plans.

Additional Coverage:

Under the LIC term insurance plan you can add riders which are additional coverage that enhance the base cover of the term insurance. These riders come with an additional premium. LIC term insurance plans come with a number of riders, such as coverage for critical illnesses, permanent disabilities, accidental deaths, etc., for an extra premium.

Protection Against Loans and Other Liabilities:

You can protect your outstanding debts and liabilities with LIC term plans. If something untoward occurs to the policyholder, the term plans provided by LIC assist in paying off the outstanding loans.

Affordable Premiums:

Term insurance plans offered by LIC have lower premium costs compared to other types of life insurance policies. Because of this, it’s a reasonably priced method of giving your loved ones financial security.

Tax Benefits:

Under Section 10(10D) of the Act, the death benefit is tax-free, subject to the applicable tax laws, and premiums paid for LIC Term Plans are eligible for tax benefits under Section 80C of the Income Tax Act.

What is SBI Term insurance?

SBI (State Bank of India) Term Insurance refers to term life insurance policies that offer financial protection to the policyholder’s family in the event of the policyholder’s demise during the period of the term insurance. These plans offer a death benefit to the nominee/beneficiary, ensuring that the family receives a lump sum amount if the insured passes away within the specified term.

The term insurance plans by SBI Life Insurance come with different features, such as flexible terms, choice of coverage amounts (sum assured), and optional riders for enhanced coverage, including critical illness or accidental death benefits. Customers can select term insurance that suits their requirements and financial goals.

What is Special about SBI Term Insurance?

There is no denying that SBI Term insurance is infused with multiple benefits. Here is the list of the key features and benefits of term insurance plans by SBI Life Insurance.

Affordable Premium:

The low cost of term plans is one of their main advantages. The premium for a term insurance policy is less expensive than that of other insurance products. Unlike other types of life insurance policies like whole life or endowment plans, term insurance plans do not accumulate cash value over time, which keeps the premiums significantly lower.

Multiple Payout Options:

Certain term plans provide you the choice between a lump sum payout and monthly payments. It allows you to select from a range of death benefit payout options based on your needs, assisting you in covering both your ongoing daily expenses and immediate liabilities.

Better Half Benefit Option:

The “Better Half Benefit Option” is a feature available in some term insurance plans including SBI Life – eShield Next. This option ensures that in the event of the policyholder’s death, the spouse (better half) receives an additional benefit along with the regular death benefit payout. This additional benefit is usually a percentage of the sum assured and is paid out separately to the spouse, providing extra financial support during a challenging time.

Future Proofing Benefit:

With the “Future Proofing Benefit Option,” SBI term insurance provides the policyholder with the flexibility to increase the sum assured at specific intervals, usually on term insurance anniversaries or at predetermined milestones, without the need for medical underwriting. By opting for the Level Cover with Future Proofing Benefit Option, policyholders can ensure that their family’s financial protection keeps pace with the rising cost of living.

Whole Life Cover Up to 100 Years:

SBI Term insurance offers coverage for up to 100 years, which means that the policy provides life insurance protection for the entire lifetime of the policyholder, up to the age of 100. In the event of the policyholder’s demise at any point before the age of 100, the term insurance plan by SBI Life Insurance would pay out the death benefit to the nominee/beneficiary.

Tax Benefits:

Moreover, term insurance plans by SBI Life Insurance offer tax advantages. The payout received from a term plan is tax-exempt under current income tax laws, even though the premiums paid for the plan are tax deductible.

What to Choose: Life Term Insurance or SBI Term Insurance?

Selecting the best term insurance requires careful consideration of several factors tailored to your specific needs and circumstances. First and foremost, assess your financial requirements and determine the coverage amount (sum assured) needed to safeguard your family’s future. Consider your outstanding debts, daily expenses, children’s education, and any other financial obligations. To help you out, if you want term insurance with a higher claim settlement ratio and better customer support, then choose LIC term insurance. On the other hand, if you want to get term insurance with multiple riders and critical illness benefits along with other benefits like the Future Proofing Benefit Option and whole life cover, then choosing SBI term insurance will help you.

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