LIC Digi Term 876 – Eligibility, Benefits and Premium Calculation
LIC Digi Term 876 is the online term insurance policy offered by the LIC. This plan provides financial security to the family in case of the policyholder’s unfortunate death.
Benefit from LIC Digi Term 876
LIC Digi Term 876 policy is suitable for:
- Individual interested in a relatively low-cost life insurance policy;
- Individuals searching for a policy to cover the needs of their families in the event of their sudden death;
- Clients interested in purchasing the policy online;
- Persons who are 18-45 years old and search for long-term coverage as well as flexible premium payment opportunities.
Key Features:
- Two Death Benefit Options: Level Sum Assured and Increasing Sum Assured.
- Premium Options: Regular, Limited Premium of 10 and 15 years and Single Premium.
- High Sum Assured Rebate: Lower premium rates for higher coverage.
- Non-Smoker Rates: Lower premiums for non-smokers, subject to a medical test.
- Special Rates for Women: Reduced premiums for female policyholders.
Eligibility and Features of LIC Digi Term 876
| Feature | Details |
|---|---|
| Plan Type | Pure Risk Term Insurance Plan |
| Entry Age | Minimum: 18 years (last birthday); Maximum: 45 years (last birthday) |
| Policy Term | 15 to 40 years |
| Premium Payment Term | Regular, Limited (10 or 15 years), Single Premium |
| Sum Assured | Minimum: ₹50 Lakhs; Maximum: ₹5 Crore |
| Death Benefit | Option I: Level Sum Assured; Option II: Increasing Sum Assured |
| Maturity Benefit | None (pure risk cover) |
| Bonuses | No bonuses or profits are 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 only for single and limited premium policies |
| Tax Benefits | Premiums eligible for deductions under Section 80C |
| Policy Revival | Within 5 years from the first unpaid premium |
| Free Look Period | 30 days from policy receipt |
| Riders Available | Not applicable |
Rebates on LIC Digi Term 876
LIC Digi Term 876 offers rebates based on the sum assured and the policyholder’s age. The higher the sum assured, the larger the rebate, which reduces the premium payable.
High Sum Assured Rebate Table:
| Sum Assured Range | Rebate for Non-Smoker (Regular/Limited Premium) (Age 18-30 years) | Rebate for Non-Smoker (Single Premium) (Age 18-30 years) |
|---|---|---|
| ₹50 lakh to < ₹1 crore | Nil | Nil |
| ₹1 crore to < ₹2 crore | 18% | 17% |
| ₹2 crore to < ₹5 crore | 30% | 27% |
| ₹5 crore and above | 37% | 30% |
Note: Rebates vary based on age and premium payment mode (single, regular, or limited premium).
LIC Digi Term 876 Premium and Maturity Calculation
Example Calculation for Abhishek:
- Age: 35 years
- Sum Assured: ₹50,00,000
- Policy Term: 20 years
- Death Benefit Option: Level Sum Assured (₹50 lakh remains constant throughout)
- Premium Payment: Regular mode (Yearly payment)
Premium Calculation Details
Premium Payment Details: (Regular, Non-Smoker)
| Premium Details | Level Sum Assured (₹) | Increasing Sum Assured (₹) |
|---|---|---|
| Annual Premium | 6,600 | 7,500 |
| GST (18%) for the First Year | 1,188 | 1,350 |
| Total Premium (First Year) | 7,788 | 8,850 |
| Total Premium for Following Years (with GST) | 7,788 | 8,850 |
Thus, for the first year, the total premium for Level Sum Assured is ₹7,788 and for Increasing Sum Assured is ₹8,850.And the policy holder will continue to pay the same amount till 20 years.
Maturity Details
Since, LIC Digi Term 876 is a pure term plan, no maturity benefits are payable.
Death Benefit Payment
Take Year 10 as an example for both Level Sum Assured and Increasing Sum Assured calculation if Abhishek dies in that year:
| Death Benefit Option | Sum Assured in Year 10 | Premium Paid till Year 10 | Death Benefit Payable |
|---|---|---|---|
| Level Sum Assured | ₹50,00,000 | ₹7,788/year × 10 = ₹77,880 | ₹50,00,000 |
| Increasing Sum Assured | ₹75,00,000 | ₹8,850/year × 10 = ₹88,500 | ₹75,00,000 |
Calculations:
Level Sum Assured:
If Abhishek dies in Year 10, the sum assured remains constant at ₹50,00,000, regardless of when the death occurs during the policy term. His family will receive ₹50,00,000 as the death benefit.Increasing Sum Assured:
If Abhishek had opted for the Increasing Sum Assured option, by Year 10 the sum assured would have increased by 10% annually from Year 6 onwards. Thus, in Year 10, the sum assured would be ₹75,00,000. If he dies in this year, his family will receive ₹75,00,000 as the death benefit.
| Policy Year | Level Sum Assured (₹) | Increasing Sum Assured (₹) |
|---|---|---|
| 1 | 50,00,000 | 50,00,000 |
| 2 | 50,00,000 | 50,00,000 |
| 3 | 50,00,000 | 50,00,000 |
| 4 | 50,00,000 | 50,00,000 |
| 5 | 50,00,000 | 50,00,000 |
| 6 | 50,00,000 | 55,00,000 |
| 7 | 50,00,000 | 60,00,000 |
| 8 | 50,00,000 | 65,00,000 |
| 9 | 50,00,000 | 70,00,000 |
| 10 | 50,00,000 | 75,00,000 |
| 11 | 50,00,000 | 80,00,000 |
| 12 | 50,00,000 | 85,00,000 |
| 13 | 50,00,000 | 90,00,000 |
| 14 | 50,00,000 | 95,00,000 |
| 15 | 50,00,000 | 1,00,00,000 |
| 16 and onwards | 50,00,000 | 1,00,00,000 |
This table shows how the Level Sum Assured remains constant at ₹50,00,000 throughout the policy term, while the Increasing Sum Assured rises by 10% per year from the 6th year, reaching ₹1,00,00,000 by the 15th year and remaining constant afterward.
Claim Payment Options
Policyholders have the freedom on how they would like their death benefit to be paid to nominee:
Lump Sum Benefit: Death benefits are paid in full.
Installment: In the death benefit, it can also be paid in monthly, quarterly, half-yearly or yearly over 5,10 or 15 years period.
Minimum Installment Amounts:
- Monthly: ₹5,000
- Quarterly: ₹15,000
- Half-Yearly: ₹25,000
- Yearly: ₹50,000
FAQs on LIC Digi Term 876
Q1: What is LIC Digi Term 876?
LIC Digi Term 876 is a pure risk life insurance plan that provides death benefits to the nominee in case of the policyholder’s death.
Q2: Are there any maturity benefits?
No, LIC Digi Term 876 does not provide maturity benefits.
Q3: What are the premium payment options?
You can pay premiums yearly, half-yearly, or as a single premium.
Q4: What is the difference between Level Sum Assured and Increasing Sum Assured?
The Level Sum Assured remains constant throughout the policy term, while the Increasing Sum Assured grows by 10% annually from the 6th year, up to 200% by the 15th year.
Q5: Is there a grace period for premium payment?
Yes, a 30-day grace period is available for regular and limited premium payments.
Q6: Can I revive a lapsed policy?
Yes, a lapsed policy can be revived within 5 years of the first unpaid premium.
Q7: What is the minimum sum assured?
The minimum sum assured is ₹50 Lakhs.
Q8: Are there any tax benefits?
Yes, premiums paid are eligible for deductions under Section 80C of the Income Tax Act
Q9: Can I surrender the policy?
Yes, surrender benefits are available only for single and limited premium payment options after three years.
Q10: Can women get lower premiums?
Yes, women are eligible for special premium rates under this plan.
Q11: What happens if I miss a premium payment?
You have a grace period of 30 days to make the payment. After this period, the policy will lapse.
Q12: Is a medical test required?
Yes, LIC requires a medical test, including a cotinine test to determine smoker status.
Q13: Can I get a loan on this policy?
No, loans are not available under LIC Digi Term 876.
Q14: How can I apply for this plan?
You can apply for LIC Digi Term 876 online through the LIC website.
Q15: Is there any rebate for a higher sum assured?
Yes, rebates are available for higher sums assured, depending on the policyholder’s age and sum assured amount.