When it comes to financial security in India, few names are as well-known as the Life Insurance Corporation of India, or LIC. With over 65 years of trust and more than 280 million policyholders, LIC has become a staple in life insurance. However, with so many plans available, many people wonder: Which LIC policy is right for me?
In this article, Money Moksh breaks down the types of LIC policies. This will help you understand each category, so you can make a choice based on your financial goals, risk tolerance, and life stage.
Types Of LIC Policies
1. Term Insurance Plans
Term plans are the simplest form of life insurance. These policies provide high coverage at low premiums, but only pay out (called the sum assured) if the policyholder dies during the policy term.
Popular LIC Term Plans : LIC Tech Term Plan, a fully online policy with flexible options and add-ons like accidental death benefit. & LIC Jeevan Amar, available for offline purchase with options for increasing or level sum assured.
Best For : Young professionals, breadwinners, and anyone looking for high life cover at a low cost.
2. Endowment Plans
An endowment plan combines life cover with savings. It pays a lump sum either on death or at maturity (whichever comes first), making it ideal for those wanting guaranteed returns along with insurance protection.
Popular LIC Endowment Plans : LIC Jeevan Labh & LIC New Endowment Plan.
Best For : Conservative investors wanting to build a fund over time while staying insured.
3. Money-Back Plans
These plans provide regular payouts during the policy term. This is different from endowment plans, which only pay out at maturity. If death occurs, the full sum assured goes to the nominee, regardless of earlier payouts.
Popular LIC Money-Back Plans : LIC New Money Back Plan (20/25 Years) & LIC Bima Shree.
Best For : People needing cash at regular intervals, like parents saving for children’s education or marriage.
4. Whole Life Plans
As the name implies, whole life plans provide coverage for the insured’s entire life (up to age 100). These LIC policies offer lifelong security and also include a savings component that builds cash value over time.
Popular LIC Whole Life Plans : LIC Jeevan Umang
Best For : Legacy planning, transferring wealth to heirs, and long-term security.
5. Unit Linked Insurance Plans (ULIPs)
ULIPs are market-linked life insurance products where the premium is invested in equity and debt funds. This offers the potential for higher returns along with life cover.
Popular LIC ULIPs : LIC SIIP & LIC New Endowment Plus.
Best For : Investors with a moderate to high risk appetite who want growth along with protection.
6. Pension / Annuity Plans
These LIC policies are designed for retirement planning. They provide regular income either right away or after a certain vesting period.
Popular LIC Pension Plans : LIC Jeevan Akshay VII & LIC Saral Pension Plan
Best For : Salaried and self-employed individuals planning for a secure post-retirement life.
7. Children’s Plans
These plans aim to secure the financial future of children in case something happens to the parent. Most of these LIC policies provide funds for education, marriage, or other milestones.
Popular LIC Child Plans : LIC Jeevan Tarun & LIC New Children’s Money Back Plan.
Best For : Parents looking to plan long-term financial goals for their children.
Growing Interest In Term and ULIP Plans Post-COVID
In recent months, data from LIC’s annual report and IRDAI show a shift in customer preference toward term insurance and ULIPs. After the COVID-19 pandemic, awareness about mortality risks increased demand for LIC Tech Term and Jeevan Amar plans.
At the same time, millennials are becoming more investment-savvy. With markets stabilizing in 2024–25 and Nifty surpassing 24,000, there’s renewed interest in LIC ULIPs like SIIP, which offer market exposure along with the benefit of insurance.
Additionally, LIC’s recent push to digitize services has made online policy issuance easier, boosting the popularity of direct-to-customer offerings.
How To Choose The Right LIC Policy
Here are some practical factors to consider when selecting your LIC policy :
Criteria ( Suggested Policy Type ) : Pure protection , Term Insurance , Guaranteed returns , Endowment or Whole Life , Regular payouts , Money-Back Plans , Market-linked growth , ULIPs Retirement planning , Pension Plans , Child’s future , Children’s Plans
You should also evaluate :
- Your age and financial dependents
- Income stability
- Future goals (buying a home, education, retirement)
- Tax benefits under Section 80C and 10(10D)
In-Depth Insight: Endowment vs ULIP vs Term Plans
To better understand what makes each plan unique, let’s compare three popular LIC policy types :
Features : Term Plan, Endowment, ULIP Returns, No, Guaranteed, Market-linked Premium, Low, Moderate, Moderate to High
Risk, None, Low, Moderate to High
Best for : Protection, Savings + Security, Growth + Insurance
While a term plan is best for affordability and coverage, an endowment plan ensures steady wealth building with low risk. A ULIP may outperform the others in the long run but comes with some investment risk.
Conclusion : One LIC Policy Doesn’t Fit All
The Life Insurance Corporation of India offers a variety of products to meet different financial needs. Whether you are a young parent, salaried professional, retiree, or investor, the key is to match your LIC policy with your financial goals, family needs, and risk profile.
At Money Moksh, we believe that insurance is not just about protection; it’s about building a financially stable life. With LIC’s decades of trust and growing digital services, now is a great time to review your policy or start fresh with a plan that suits your needs.
Also If you are looking for reliable life insurance as well? Click here to explore trusted life insurance plans and secure your family’s future today.