LIC Digi Credit Life 878 – Eligibility, Benefits, and Premium Calculation
LIC Digi Credit Life 878 is an online term insurance plan offered by LIC that delivers a solution to loan repayment in the event of unfortunate death. It is a decreasing-term insurance plan where the sum assured decreases over time to match your reduced home loan.
Benefits from LIC Digi Credit Life 878
This plan is ideal for:
- Individuals with loans seek coverage against repayment risks.
- People want a low-cost insurance solution that decreases along with their loan balance.
- Customers interested in purchasing a plan online through LIC’s official website.
- Policyholders who are 18-45 years old and need coverage for loan repayment with flexible premium payment options
- Reduced premium rates for non-smokers based on medical examination results.
- Special premium discounts for women policyholders.
Eligibility and Features of LIC Digi Credit Life 878
| Feature | Details |
|---|---|
| Plan Type | Decreasing Term Life Insurance Plan |
| Entry Age | Minimum: 18 years; Maximum: 45 years |
| Policy Term | 5 to 30 years |
| Premium Payment Term | Single Premium, Limited Premium (5, 10, or 15 years) |
| Sum Assured | Minimum: ₹50 Lakh; Maximum: ₹5 Crore |
| Death Benefit | Decreasing sum assured based on loan repayment |
| Maturity Benefit | None (pure risk cover) |
| Bonuses | No bonuses or profits payable |
| Premium Payment Modes | Yearly, Half-Yearly, Single Premium |
| Loan Facility | Not available |
| Grace Period | 30 days for regular and limited premium policies |
| Surrender Value | Available for Single and Limited Premium policies |
| Tax Benefits | Premiums eligible under Section 80C |
| Policy Revival | Within 5 years of the first unpaid premium |
| Free Look Period | 30 days from policy receipt |
| Riders Available | Not applicable |
Rebates on LIC Digi Credit Life 878
LIC Digi Credit Life 878 offers rebates based on the sum assured and premium payment mode. Higher coverage receives rebates, making it a more affordable option for large loans.
| Sum Assured Range | Rebate for Single Premium (Age 35) |
|---|---|
| ₹50 lakh to < ₹1 crore | Nil |
| ₹1 crore to < ₹2 crore | 14% |
| ₹2 crore to < ₹5 crore | 25% |
| ₹5 crore and above | 32% |
LIC Digi Credit Life 878 Premium and Maturity Calculation
For a policyholder aged 35, choosing a sum assured of ₹75,00,000 and a policy term of 20 years, the premium payment term and the total premium calculations will be as follows:
Example Calculation:
- Age: 35 years
- Sum Assured: ₹75,00,000
- Policy Term: 20 years
- Premium Payment Term (PPT): 5 years (Limited Premium Payment) or Single Premium
- Loan Interest Rate: 8%
- Premium Payment Mode: Single Premium or Annual Premium (Limited Premium)
Premium Calculation Details:
Option 1: Single Premium (One-time Payment)
In the single premium option, the total premium is ₹78,175, which will cover the policyholder for the entire 20 years.
| Premium Details | Decreasing Sum Assured (₹75,00,000) |
|---|---|
| Single Premium | ₹66,250 |
| GST (18%) | ₹11,925 |
| Total Premium (First Year) | ₹78,175 |
Option 2: Limited Premium Payment (5 years)
| Premium Details | Decreasing Sum Assured (₹75,00,000) |
|---|---|
| Annual Premium (First Year) | ₹16,800 |
| GST (18%) | ₹3,024 |
| Total Premium (First Year) | ₹19,824 |
For Limited Premium Payment option, the policyholder will pay ₹19,824 per year for 5 years. From the 2nd year onwards, the premium remains the same at ₹19,824 annually (inclusive of GST).
Maturity Benefit
As LIC Digi Credit Life 878 is a pure term insurance plan, there is no maturity benefit. The plan is solely for covering the risk of death during the policy term, and no payment is made if the policyholder survives the term.
Death Benefit Payment
If the policyholder dies during the policy term, the death benefit payable will depend on the decreasing sum assured as outlined in the policy’s risk cover schedule. Let’s take Year 10 as an example:
Calculation for Year 10 (Age 45):
- Decreasing Sum Assured: ₹50,00,000
- Total Premium Paid (Single Premium): ₹78,175
- Death Benefit Payable: ₹50,00,000
If the policyholder dies in Year 10, the nominee will receive ₹50,00,000 as the death benefit.
For the Limited Premium Payment option:
- Total Premium Paid (Year 10): ₹19,824 × 5 years = ₹99,120
- Death Benefit Payable: ₹50,00,000
Death Benefit Table:
| Policy Year | Sum Assured on Death | Total Premium Paid (Single Premium) | Death Benefit Payable |
|---|---|---|---|
| Year 1 | ₹75,00,000 | ₹78,175 | ₹75,00,000 |
| Year 5 | ₹65,00,000 | ₹78,175 | ₹65,00,000 |
| Year 10 | ₹50,00,000 | ₹78,175 | ₹50,00,000 |
| Year 15 | ₹25,00,000 | ₹78,175 | ₹25,00,000 |
| Year 20 | ₹10,00,000 | ₹78,175 | ₹10,00,000 |
In this plan, the sum assured decreases every year based on the loan repayment schedule, and the death benefit will match the applicable sum assured for that year.
Surrender Value
LIC Digi Credit Life 878 provides a surrender value option for both Single Premium and Limited Premium Payment policies. If the policyholder chooses to surrender the policy before the end of the term, they are entitled to receive a portion of the premium back, known as the Unexpired Risk Premium Value.
Single Premium Policy Surrender:
- For Single Premium policies, the surrender value depends on how many years the policy has been in force.
- The longer the policy has been active, the lower the surrender value, as more of the premium has been used to cover the risk.
Surrender Value for a ₹75,00,000 Sum Assured Policy:
- Single Premium Paid: ₹78,175
- Policy Term: 20 years
Surrender Value Calculation for Year 10:
For a policy with a single premium of ₹78,175:
- Surrender Value: Approximately ₹45,000.
| Policy Year | (Percentage) | Remaining Term | Surrender Value |
|---|---|---|---|
| Year 5 | 80% | 15 years | ₹50,625 |
| Year 10 | 85% | 10 years | ₹45,000 |
| Year 15 | 90% | 5 years | ₹22,500 |
The surrender value decreases as the policy moves closer to its maturity, since the death coverage is being reduced over time in line with the decreasing sum assured.
Limited Premium Payment Surrender:
For Limited Premium Payment policies, the surrender value is available if the policyholder has paid full premiums for:
- At least 2 years for a 5-year premium term.
- At least 3 years for 10 or 15-year premium terms.
FAQs on LIC Digi Credit Life 878
Q1: What is LIC Digi Credit Life 878?
LIC Digi Credit Life 878 is a decreasing term insurance plan designed to cover loan repayments in case of the policyholder’s death.
Q2: Are there any maturity benefits?
No, this plan does not offer maturity benefits as it is a pure risk cover.
Q3: What are the premium payment options?
You can pay premiums as a Single Premium or in limited yearly installments.
Q4: How does the decreasing sum assured work?
The sum assured decreases every year, aligned with a pre-defined loan repayment schedule. This reduction continues throughout the policy term.
Q5: Is there a grace period for premium payment?
Yes, a 30-day grace period applies for limited premium policies..
Q6: Can I surrender the policy?
Yes, surrender benefits are available for single and limited premium policies.
Q7: Can I get lower premiums as a non-smoker?
Yes, non-smokers enjoy lower premiums based on medical test results.
Q8: Is a loan available under this policy?
No, loans are not available under this plan.
Q9: How can I apply for LIC Digi Credit Life 878?
You can apply online through LIC’s official website.
Q10: Is there a special rebate for women policyholders?
Yes, women are eligible for lower premium rates under this plan.