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How to Choose the Right LIC Plan — Complete Buyer's Guide

With 30+ plans across endowment, term, money back, whole life, and ULIP categories, choosing the right LIC policy can feel daunting. This step-by-step guide will help you identify the best plan for your unique situation.

Step 1: Identify Your Primary Goal

The most important question to ask: Why are you buying insurance?

• Maximum life cover at lowest cost → Choose a Term Plan (LIC Tech Term 854)
• Savings + Insurance combo → Endowment plan (Jeevan Anand 815/915)
• Regular periodic income from insurance → Money Back (Plan 920) or Jeevan Umang (845)
• Retirement income → Jeevan Umang (845) or Jeevan Akshay (annuity)
• Child's future goals protection → Jeevan Lakshya (833)

Step 2: Assess Your Current Life Stage

Age Group	Typical Priority	Recommended Plan
22–30 years	High cover, low premium	Term Plan (854) + small endowment
30–40 years	Savings + family protection	New Jeevan Anand (915) / Jeevan Lakshya
35–45 years	Retirement planning begins	Jeevan Umang (845)
40–50 years	Legacy + lump sum savings	Endowment / Jeevan Anand

Step 3: Calculate How Much Cover You Need

A common rule of thumb: Your life cover should be 10–15× your annual income.

• Annual income: ₹8 lakh → Recommended coverage: ₹80L to ₹1.2 Cr
• Outstanding loans (home, car, personal) should be added to this figure
• Factor in children's education and marriage expenses
• Subtract existing savings, EPF corpus, and any existing insurance

Step 4: Decide Your Budget

As a guideline, spend 5%–10% of your annual income on insurance premiums. For an income of ₹6 lakh/year, a premium budget of ₹30,000–₹60,000/year is reasonable. Within that budget:

• Allocate 30%–40% to a term plan for maximum protection
• Use remaining budget for savings-oriented LIC plans

Step 5: Check Eligibility Before Applying

Each LIC plan has specific eligibility criteria:

• Entry age: Most endowment plans accept ages 18–50
• Maximum coverage age: Typically 70–100 years depending on plan
• Health conditions: Some plans require medical examination above certain SA limits
• Occupation: Certain hazardous occupations may attract premium loadings

Step 6: Compare Premiums Using a Calculator

Before visiting an agent or LIC branch, use our free calculators to get an idea of the premium range for each plan. This helps you negotiate better and avoid being oversold a plan that doesn't match your needs.

Step 7: Add Riders for Extra Protection

Consider these LIC riders to enhance your policy at minimal additional cost:

• Accidental Death & Disability Benefit Rider (ADDB): Extra SA on accidental death
• Critical Illness Rider: Lump sum on diagnosis of major illness
• Term Rider: Add extra cover to endowment plans

Quick Decision Flowchart