In life, unforeseen events can occur at any moment, potentially impacting your financial stability. To safeguard against such uncertainties, investing in insurance plans, particularly life insurance, is prudent. Life insurance serves as a protective financial tool, offering a shield against the economic repercussions of unexpected events.
By choosing the right insurance plan, you not only secure your own future but also ensure that your family is financially protected in the event of an unfortunate occurrence. Therefore, selecting the most suitable life insurance tailored to your needs and budget becomes a crucial decision.
The two most popular life insurance companies in India are ICICI Prudential Life Insurance and LIC. Both have their own set of benefits and limitations.
ICICI Prudential life insurance and LIC companies offer a variety of plans & services but which is better? The comparison of ICICI Prudential life insurance and Life Insurance Corporation depends on many factors such as customer service, pricing, benefits, coverage, claim settlement ratio, solvency ratio, and other factors.
Comparison Between LIC of India and ICICI Prudential Life Insurance
Here is a detailed comparison of Life Insurance Corporation of India and ICICI Prudential Life Insurance.
| Parameters | Life Insurance Corporation | ICICI Prudential Life Insurance |
| Claim Settlement Ratio (Individual Death Claims) Life insurance) | 96.02% (As per IRDAI Report 21-22) | 97.82 % (As per IRDAI Report 21-22) |
| No. of Plans | 25+ | 20+ |
| Tax Benefits | Yes | Yes |
| Buying process | Smooth buying process | Quick and Easy Buying Procedure |
| Technology | LIC Digital Provides all information about LIC Products & Portal Services. Options include Online Premium Payments, Online services, Premium Calendar, Policy Status, and more. | ICICI Pru App
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| Discounts | Special rates for non-smokers & women | Buy online & get a 5% discount. |
| Riders | LIC’s Linked Accidental Death Benefit Rider LIC’s Accidental Death and Disability Benefit Rider LIC’s Accident Benefit Rider LIC’s Premium Waiver Benefit Rider LIC’s New Critical Illness Benefit Rider | Optional Accidental Death Benefit Additional protection with Accidental Death Rider and Accidental Permanent Disability Rider. |
More Insights About Life Insurance Corporation of India
Life Insurance Corporation (LIC) is the largest state-owned life insurer in India. It was established in 1956 when the Parliament of India passed the Life Insurance of India Act, nationalizing the private insurance industry in India. LIC operates as a statutory corporation and is controlled by the Government of India.
LIC offers a wide range of life insurance products to cater to the diverse needs of individuals. These products include various types of life insurance plans, pension plans, and investment-linked plans. Life insurance plans offered by LIC provide financial protection to the policyholder’s family in case of the policyholder’s demise. They also serve as long-term savings instruments, offering a combination of protection and investment.
Features and Benefits of plans from Life Insurance Corporation of India
Here are the salient features and benefits of Life Insurance Corporation plans.
- Death Benefit
The primary purpose of LIC is to provide financial protection to the policyholder’s family in the event of their demise. The death benefit is the lump sum amount paid to the nominee or beneficiary if the policyholder passes away during the policy term. With Life Insurance Corporation of India, you will not have to worry about future expenses if the breadwinner of your family is not available.
- Maturity Benefit
Many life insurance plans by LIC also offer a maturity benefit, where the policyholder receives a lump sum amount at the end of the policy term if they survive the entire duration of the policy.
- Riders and Add-ons
LIC often provides additional coverage options through riders or add-ons. These can include critical illness riders, accidental death benefit riders, disability riders, etc. These riders enhance the coverage of the basic life insurance policy by providing extra financial protection under specific circumstances.
- High Claim Settlement Ratio
Life Insurance Corporation has featured a claim settlement ratio of 96.02% in FY 2021-22. The high Claim Settlement Ratio reflects the credibility of LIC. The Claim Settlement Ratio of LIC depicts the number of claims that were paid successfully in a year.
- Tax Benefits
Life insurance premiums paid to LIC may be eligible for tax benefits under Section 80C of the Income Tax Act. Additionally, the maturity amount or death benefit received is often tax-free under Section 10(10D) of the Income Tax Act, subject to certain conditions.
- Flexible-Premium Payment Options
LIC offers flexibility in premium payment options. Policyholders may choose to pay premiums annually, semi-annually, quarterly, or monthly, depending on the plan.
- Guaranteed Income Benefit
During the guaranteed income period, the policyholder or annuitant receives regular income payments, which are predetermined and specified in the policy terms. These payments are guaranteed and are not affected by market fluctuations.
- Surrender Value
Depending on the type of policy and the duration for which premiums have been paid, policyholders may have the option to surrender the policy and receive a surrender value.
- Survival Benefit
If you, as the policyholder, survive till the end of each predefined interval, which can be every 3 or 5 years, for example, the policy pays out a portion of the sum assured. This payout is known as the survival benefit, which is offered by LIC plans.
- Excellent Customer Support
Life Insurance Corporation is one of the largest and oldest life insurance providers of affordable policies and plans. It values its customers and provides excellent customer service. Their customer care toll-free number is accessible 24×7. This helps the customer to stay connected with the insurance provider at all times.
What is ICICI Prudential Life Insurance?
ICICI Prudential Life Insurance Company Limited is a leading private life insurance provider, which is a joint venture between ICICI Bank, one of India’s largest and most prominent private sector banks, and Prudential Corporation Holdings Limited. ICICI Prudential offers a wide range of life insurance products catering to various needs such as protection, savings, investments, and retirement planning. Their product portfolio includes term insurance plans, endowment plans, ULIPs (Unit Linked Insurance Plans), child plans, and retirement plans, among others. It has a guaranteed 1-day death claim settlement, making it one of the fastest claim payout providers in the industry.
What Distinguishing Features and Benefits Does ICICI Prudential Life Insurance Offer?
Listed below are the features and benefits of ICICI Prudential Life Insurance.
- Financial security
Life insurance by ICICI Prudential plays a crucial role in providing financial security for both you and your loved ones. By opting for a substantial life cover, you can ensure that your family is financially protected in the unfortunate event of your absence. This helps them maintain their standard of living and cope with the financial challenges that may arise. Choosing an adequate life cover is a responsible step towards securing the well-being of your family and ensuring their financial stability in times of need.
- Wealth creation
Life insurance plans by ICICI Prudential not only provide financial protection but also serve as tools for wealth creation and savings. These plans offer opportunities to accumulate wealth over time, allowing policyholders to build a financial cushion for future needs. With various options tailored to cover different types of risks and goals, life insurance plans can be versatile instruments in your overall financial strategy.
- Disciplined investment
Making regular premium payments for life insurance plans by ICICI Prudential fosters financial discipline. These plans present diverse investment opportunities designed to suit various risk profiles, offering a broad spectrum of products like unit-linked life insurance plans, guaranteed savings insurance plans, endowment plans, and more.
- Retirement planning
Life insurance products such as annuity plans, savings plans, endowment plans, and others play a crucial role in building a retirement pool. ICICI Prudential life insurance not only provides a secure avenue for saving but also offers guaranteed income upon maturity. By opting for these plans, you can effectively secure your retirement and ensure that you have adequate savings to sustain a comfortable lifestyle during your post-employment years.
- Tax savings
ICICI Prudential Life insurance plans provide numerous tax benefits, enhancing overall savings. The premiums paid are eligible for tax deductions under Sections 80C and 80D of the Income Tax Act, of 1961. Additionally, in many cases, the maturity benefits enjoy tax-free status under Section 10(10D). This favourable tax treatment makes life insurance an attractive avenue for individuals seeking to optimize their savings while benefiting from tax advantages.
- Claim Settlement
ICICI Prudential Life Insurance has generally been recognized for its commitment to quick and hassle-free claim settlement. When it comes to settling claims, ICICI Prudential Life Insurance ensures death claims are settled within 1 day.
What is Ideal: Life Insurance Corporation or ICICI Prudential Life Insurance?
Determining whether LIC (Life Insurance Corporation of India) or ICICI Prudential Life Insurance is more suitable for you depends on your individual needs, preferences, and financial goals. Both LIC and ICICI Prudential are prominent insurance providers, but they have different structures, products, and customer service models.
LIC is a state-owned life insurance company, and it is the largest life insurance provider in India. It operates under the ownership and control of the Government of India. On the other hand, ICICI Prudential Life Insurance is a private sector company formed as a joint venture between ICICI Bank and Prudential Corporation Holdings Limited. If you want to buy life insurance with a wide range of life insurance plans along with special discounts for women and non-smokers, then LIC is an ideal choice. On the other hand, if you want to buy life insurance with a higher claim settlement ratio along with excellent customer support, then ICICI Prudential Life Insurance will never disappoint you.
