LIC's 3 new plans explained: Who can buy them and what do they offer
The Life Insurance Corporation of India (LIC) is introducing three schemes covering retirement income, hospitalisation expenses and cancer-related financial protection from October 19, giving customers new options to consider for their long-term financial planning.
New Jeevan Dhara-II is a deferred annuity plan to provide income after retirement. Health Shield and New Cancer Cover offer health-related financial protection.
According to the Press Trust of India (PTI), LIC announced the three products on October 13. The insurer outlined their broad features, but prospective buyers should examine the detailed policy documents before deciding whether any of them meets their financial needs.
New Jeevan Dhara-II: A plan for retirement income
New Jeevan Dhara-II is a non-participating, non-linked individual savings and deferred annuity plan. According to PTI, LIC said the product is designed to provide financial independence through guaranteed income after retirement.
A deferred annuity generally allows a policyholder to make payments or build funds during an initial period, with annuity income starting at a later date. This can help individuals plan for regular income after they stop earning a salary.
For people approaching retirement, a predictable income stream can help meet recurring expenses such as household bills, groceries and healthcare costs. However, the suitability of an annuity depends on its payout structure, the age at which income begins, the premium commitment and the options available to the policyholder.
Before investing, buyers should check when the annuity payments start, how much income they can expect, whether payouts continue for life or a specified period, and what benefits are available to nominees after the policyholder’s death.
The terms “non-participating” and “non-linked” are also important. A non-participating policy does not share in the insurer’s profits through bonuses, while a non-linked policy is not directly linked to market performance. Buyers should nevertheless verify the guaranteed benefits and applicable conditions in the policy document.
Health Shield: Hospital cash and critical illness benefits
LIC’s second offering, Health Shield, is intended to provide health coverage for the entire family. PTI reported that the plan will have premiums guaranteed throughout the policy term.
The product offers a fixed daily hospital cash benefit during hospitalisation. It also provides lump-sum payouts for major surgeries and critical illnesses, according to PTI.
A daily hospital cash benefit is different from reimbursement-based health insurance. Instead of paying only against eligible medical bills, such a benefit provides a predetermined amount for each eligible day of hospitalisation, subject to the policy’s terms and conditions.
This money can help meet incidental expenses, including travel, food for accompanying family members and other costs that may not be fully covered by a standard health insurance policy.
However, buyers should not assume that a hospital cash benefit will cover the entire cost of treatment. They should check the daily payout, maximum number of payable hospitalisation days, waiting periods, exclusions and the list of covered critical illnesses and surgeries.
Families should also compare the plan’s coverage with their existing health insurance. A fixed-benefit policy may supplement comprehensive medical insurance, but it should not automatically be treated as a substitute for adequate hospitalisation cover.
New Cancer Cover: Fixed payouts on diagnosis
LIC’s third product, New Cancer Cover, is designed to provide financial benefits following the diagnosis of specified early-stage and major-stage cancers.
According to PTI, the policy provides fixed financial benefits irrespective of the actual treatment costs incurred by the insured person. This means the payout is determined by the policy’s terms rather than being restricted to reimbursement of medical bills.
Such cover can be useful because a cancer diagnosis may affect more than a household’s medical expenses. Patients may face income loss, travel costs, additional care requirements and other financial commitments during treatment.
PTI reported that the minimum basic sum assured will range from Rs 15 lakh to Rs 35 lakh, depending on the applicable age criteria. The maximum sum assured will be Rs 50 lakh, taking into account all existing policies under the plan.
The distinction between early-stage and major-stage cancer benefits is important. Buyers should examine which cancers and stages qualify for a payout, the amount payable at each stage, waiting periods and survival-period conditions, if any. They should also check whether a claim for one stage affects eligibility for subsequent benefits.
What should buyers check before purchasing?
The launch of these products does not necessarily mean that customers need to buy additional insurance. The right choice will depend on their existing policies, financial obligations, retirement plans and ability to pay premiums over the long term.
Before purchasing any of the three products, buyers should:
Compare the costs: Check premiums, payment frequency and the total amount payable over the policy term.
Read the exclusions: Understand waiting periods, eligibility requirements and circumstances in which claims may be rejected.
Assess existing cover: Check whether an existing health insurance policy or critical illness plan already provides similar benefits.
Understand the payouts: For annuities, examine the income schedule and death benefits. For health products, verify the benefit amounts and claim conditions.
Review affordability: Ensure that premiums remain manageable alongside emergency savings, loan repayments and other financial commitments.
LIC’s three products address different financial needs, so they should not be compared as interchangeable options. New Jeevan Dhara-II focuses on retirement income, Health Shield on hospitalisation and specified medical events, and New Cancer Cover on financial protection following qualifying cancer diagnoses.
Prospective buyers should review the full policy documents and compare the benefits with competing products before committing their money.