As a LIC Advisor and Financial Planner, I meet hundreds of clients every yearโyoung professionals, parents, retirees, and entrepreneurs. And most of them have similar questions about LIC and general insurance.
LIC FAQs are one of the most searched topics in 2025, and rightly so โ insurance is not just a financial product; itโs peace of mind.
In this blog, Iโve compiled the most frequently asked questions (FAQs) about LIC policies, term plans, health insurance, tax benefits, and moreโanswered simply and clearly.
Whether youโre buying your first policy or reviewing your existing plan, this guide will help you make confident decisions.
” Insurance is not an investment. Itโs protection first, planning next.โ
โ Suhasini, Financial Planner
1 . What is the difference between term insurance and endowment plans like LIC Jeevan Labh?
โThese FAQs help clients understand the difference between term and endowment policies.โ
- Term insurance provides pure life coverโif the policyholder dies, the nominee receives the sum assured. There is no maturity value.
- Endowment plans like Jeevan Labh provide both insurance and savings. Even if the policyholder survives the term, they get a lump sum on maturity.
Choose term insurance for maximum coverage at low cost. Choose endowment plans for savings + insurance.
2 . How much insurance cover do I really need?
A general rule is to have a life cover of 10 to 15 times your annual income. If your income is โน5 lakhs per year, go for at least โน50โ75 lakhs in coverage.
Also consider your:
- Loans/liabilities
- Family expenses
- Childrenโs education/marriage
- Retirement goals
3 . Are LIC policies safe and guaranteed?
Yes. LIC is a government-owned company. Its policies are non-market-linked and offer guaranteed benefits along with declared bonuses.
Endowment and money-back plans are low-risk and capital-protected, making them ideal for conservative investors.
4 . What are the tax benefits of LIC policies?
Premiums paid are eligible for deduction under Section 80C (up to โน1.5 lakh).
Maturity amount is tax-free under Section 10(10D) (if sum assured is at least 10x the premium).
This makes LIC plans a great tax-saving tool along with life protection.
5 . Can I take a loan on my LIC policy?
Yes, most traditional LIC policies (after 3 years of premiums) are eligible for loans. You can borrow up to 80-90% of the surrender value.
Loan interest is lower than personal loans. You donโt need to break your policyโit continues.
6 . What is the difference between LIC and general insurance like HDFC Ergo?
| LIC (life insurance) | General insurance (HDFC Ergo, etc.) |
| it covers your life (death, maturity) | covers health, vehicle, travel, home, etc. |
| Long term planning | Short term risk protection |
| Tax benefits under 80C | Tax benefits under 80D |
Both are essential. Life insurance protects your familyโs future. General insurance protects your health, savings, and assets.
7 . What happens if I stop paying my premiums?
Within 3 years: Policy lapses, no benefits
After 3 years: Paid-up policy (reduced benefits, no future bonuses)
“Always try to revive a lapsed policy within the revival period“
8 . What Are Bonuses in LIC ?
LIC offers Simple Reversionary Bonus every year + Final Additional Bonus (FAB) for policies held till maturity.
Example:
Jeevan Labh policy for 15 years with โน5L sum assured can receive โน1.5โ2L in bonus on maturity.
9 . Whatโs the Best LIC Plan in 2025?
| Need | Plan |
| Protection only | LIC Tech Term |
| Long-term savings | LIC Jeevan Labh |
| Childโs future | LIC Jeevan Tarun |
| Retirement income | LIC Jeevan Akshay |
“Ask your advisor for the right plan based on your age, income & goals”
10 . Can I Have Multiple LIC Policies?
Yes. In fact, itโs wise to diversify your insurance:
- Term + Endowment
- Child + Pension
- LIC + HDFC Ergo health cover
“Just ensure your total sum assured is realistic to your income and financial profile”
11 . Is LIC Better Than Private Insurance?
| LIC (Pros) | Private (Pros) |
| Govt. Backed | Online Policy management |
| Highest claim settlement ratio | Custamization |
| Stable & reliable bonuses | Riders like accidental ,critical illness |
Quote:
“A smart investor doesnโt choose one over the other. They combine the best of both worlds.”
Conclusion: Plan Today, Protect Forever
In 2025, smart financial planning is not a luxuryโitโs a necessity. With rising medical costs, inflation, and uncertainties, insurance is your familyโs first line of defense.
As an Advisor & Certified Planner, I help you:
- Choose the right mix of LIC & general insurance
- Plan for tax saving, child future, retirement, and emergency cover
Stay protected and peacefulโno matter what life bringsNeed Personal Help? Letโs Talk.
Want to know which LIC plan suits your income, family needs, and goals?
Contact Me for a free personalized insurance & financial consultation.
FAQs Quick Summary :
| Question | Answer |
| Term vs Endowment | Term = Pure cover, Endowment = Cover + savings |
| How much cover? | 10 – 15x your income |
| Are LIC policies safe? | Yes, Govt-backed |
| Loan on policy? | Yes, after 3 years |
| LIC vs HDFC Ergo | LIfe vs Health Insurance |
| Tax Benefits ? | 80C, 10(10D), 80D(Health) |
โBookmark this LIC FAQs post for future reference.โ
