Best LIC Plans for 5 Years

What is the LIC 5-Year Plan?

LIC plans for 5 years are insurance policies that span five years and are designed to meet your short-term financial goals. These plans are a hybrid of insurance and investment, offering life coverage along with a potential return on investment. The basic idea behind these plans is to offer a safety net to the policyholder and their family in case of unforeseen events. It also acts as an investment vehicle for those looking to achieve their financial objectives over five years.

The primary advantage of choosing an LIC plan for 5 years is that it ensures protection without the commitment to long-term policies. Moreover, add-ons further enhance the coverage, making it even more appealing for those looking for comprehensive financial security.

Who Should Consider LIC Plans for 5 Years?

An LIC scheme for 5 years is well-suited for individuals in the age group of 18 to 65 years who are looking for a reliable and affordable life insurance solution. 

• Meet short-term financial goals like saving for a child's education, paying off loans, or buying a vehicle
• Secure their family’s financial future without committing to long-term insurance plans
• Benefit from guaranteed returns while ensuring life coverage
• Have the flexibility to extend the policy if needed

It’s important to review the policy’s terms and conditions to ensure that it aligns with your specific financial needs.

Why Consider LIC Plan For 5 Years?

Opting for an LIC scheme for 5 years can be an excellent choice for several reasons, especially if you have immediate financial commitments. 

• Affordable Premiums: One of the most appealing features of these plans is that they offer manageable premium amounts, making them accessible to a broader range of individuals
• Short-Term Protection: If you have short-term financial goals, such as saving for your child’s education or buying a car, these plans ensure you achieve those goals while securing your family's financial future
• Flexibility: While the initial term is 5 years, many LIC plans offer the option to extend the policy if needed. This flexibility is beneficial for those who want to continue their coverage for a longer period without the hassle of renewing their plan
• Financial Security: In the event of an unexpected death, life insurance protects you and your loved ones from financial difficulties. This LIC scheme for 5 years provides a reliable solution to safeguard your family’s future during the policy term
• Guaranteed Returns: Certain policies, such as LIC’s money-back policies, offer guaranteed returns, ensuring stability for your investments. This is a great advantage, especially when the markets are volatile, as it ensures that you receive a specific amount upon maturity

Key Benefits of LIC 5-Year Policies

The LIC Plan for 5 years comes with a range of benefits that make it an attractive option for policyholders. 

Some of the key advantages include —

1. Life Coverage: The primary benefit of any LIC plan is life coverage. In the unfortunate event of the policyholder's death, the nominee receives the sum assured, helping to alleviate the financial burden during a tough time.

2. Assured Returns: Many LIC policies, including endowment and money-back policies, offer guaranteed returns. This means that regardless of market fluctuations, the policyholder is assured of receiving a specific amount at maturity or in case of their demise.

3. Riders: It often comes with the option to add riders or extra benefits like —

• Accident Benefit Rider 
• Death & Disability Benefit Rider
• Premium Waiver Benefit Rider 
• New Term Assurance Rider
  These add-ons can enhance the coverage, offering a comprehensive safety net for policyholders.

4. Savings and Investment: An LIC plan for 5 years is not just insurance but also an investment tool. By the end of the policy term, you will have built a corpus that can be used to meet various financial goals, such as retirement savings, purchasing a home, or funding higher education.

5. Loan Facility: Some policies allow you to borrow money against the surrender value of the policy. This feature offers financial flexibility during unexpected situations, allowing you to access funds when needed. 

Types of LIC Plans for 5 Years

LIC offers various lic schemes for 5 years tailored to different needs. Some of the prominent types of plans include —

1. Term Plans: These plans provide life coverage at affordable premiums. They are simple insurance policies that offer a death benefit to the nominee if you pass away during the policy term.
2. Endowment Plans: This is the  best LIC policy for 5 years  as it combines savings with life coverage. They provide both protection and a lump sum amount on maturity, along with a death benefit.
3. Pension Plans: These plans help you build a financial cushion for your post-retirement years. By combining insurance and savings, these plans offer a steady stream of income once you retire.
4. Money-Back Plans: These plans are specifically designed for short-term financial goals. They provide liquidity benefits and periodic payouts. This makes them ideal for individuals who require regular financial support during the policy term.

Best LIC Policy for 5 Years 

Life Insurance Corporation (LIC) offers a range of life insurance policies with varying features, catering to different financial needs. 

We have mentioned an overview of some of the best LIC plans with a 5-year policy tenure —

1. LIC's Term Assurance Plans

These plans provide life insurance protection at affordable premiums, ensuring financial protection for your family in case of your untimely demise. These plans do not offer any maturity benefit but focus purely on death benefits.

LIC Saral Jeevan Bima:

This plan offers simple life coverage with a death benefit paid to the nominee if you die during the policy term.

2. LIC Endowment Plans

LIC Endowment plans provide dual benefits of insurance and savings. If you survive the policy term, you get the sum assured as a maturity benefit. If you pass away, the nominee gets the sum assured as a death benefit.

LIC Dhan Sanchay Plan:

This best LIC policy for 5 years offers steady income after maturity.

3. LIC Pension Plans

These plans ensure a regular income after retirement, helping you secure your financial future.

LIC New Jeevan Shanti:

This is a deferred annuity plan where you start receiving periodic pension payments after a certain deferment period.

LIC Jeevan Akshay VII:

This is an immediate annuity plan that provides regular annuity payments right after purchase.

4. LIC Micro Insurance Term Plans

These plans are tailored for low-income individuals, offering life insurance protection at affordable premiums.

LIC Bhagya Lakshmi Plan:

This limited payment plan provides a return of 110% of premiums paid upon maturity, along with life coverage.

5. LIC Unit Linked Insurance Plans (ULIPs)

These plans combine insurance coverage with investment options in equity and debt markets.

LIC Bhagya Lakshmi Scheme:

This is a non-participating LIC scheme for 5 years that offers life coverage while providing an investment opportunity.

How to Select the Right LIC 5-Year Plan?

When selecting an LIC plan for 5-year, consider the following steps to help guide your decision —

1. Define Your Goal: Whether it's saving for a specific event or securing life insurance, understand your primary objective.
2. Evaluate Affordability: Choose a plan that fits comfortably within your budget.
3. Policy Features: Compare different policies for coverage, returns, and benefits.
4. Consider Additional Riders: Riders like critical illness or accidental death can enhance the policy’s coverage.
5. Consult an Advisor: If you're unsure, consulting a financial advisor can help you find the most suitable plan.

Frequently Asked Questions