The Life Insurance Corporation of India (LIC) has launched a new insurance product aimed at catering to financial institutions and unorganized groups. This product, called the Group Micro Term Insurance Plan, is a single-premium, pure-risk policy designed to provide financial security to members of various institutions, including microfinance organizations, cooperative societies, self-help groups (SHGs), and NGOs. The plan also extends coverage to employee groups and unorganized sectors, helping provide a safety net for their members.
Key Features of the Group Micro Term Insurance Plan
LIC’s Group Micro Term Insurance Plan is crafted to serve the needs of financial institutions and their members. The following are its core benefits and features:
- Coverage for Groups of 50 or More Members:
This plan is available to groups that have at least 50 members. The wide scope makes it a great fit for institutions like microfinance companies, cooperatives, SHGs, NGOs, and employee groups. - Sum Assured Ranges Between ₹5,000 and ₹2 Lakh:
Each member covered under this policy can get a risk cover between ₹5,000 and ₹2 lakh. This sum assures financial security for the beneficiaries in the event of a policyholder’s accidental death. - Single Premium Plan:
The Group Micro Term Insurance Plan is a single premium policy, meaning that members are only required to make a one-time payment at the time of policy purchase. This makes it simple and hassle-free for the members and institutions. - Flexible Tenure:
Members and institutions have the flexibility to choose the duration of the plan, ranging from as short as one month to as long as 10 years, providing versatility based on group needs. - Joint Coverage for Couples:
If both spouses work in the same institution or are members of the same group, they can avail themselves of this plan jointly, offering financial protection for both. - No Medical Tests Required:
One of the standout features of this plan is that there is no need for any medical examination before opting for coverage. This makes it more accessible for members from various backgrounds, particularly in rural or underserved communities.
No Maturity Benefits, But Protection for Families
While the Group Micro Term Insurance Plan does not offer any maturity benefits, its primary objective is to provide financial protection in the event of a member’s accidental death. In such cases, the nominee will receive the sum assured as a lump sum payout. However, if death occurs due to reasons other than an accident, a lesser amount may be paid to the nominee.
Conditions That Nullify the Policy
There are specific conditions where the benefits of the policy will not be available, and the policy may be cancelled under the following circumstances:
- If a person leaves or is removed from a group, their policy will be cancelled.
- If the policyholder exceeds the age limit defined by the policy.
- If the policy is surrendered by the policyholder or the group, no benefits will be provided.
- When the term of the policy expires, the benefits cease.
Aiming to Meet the Needs of Financial Institutions
LIC’s new offering is particularly designed to address the demands of financial institutions like microfinance firms, cooperative societies, and NGOs, ensuring financial security for their members. These institutions often cater to low-income individuals who may not have access to traditional insurance products. With this plan, LIC aims to bridge that gap, providing coverage that is simple, affordable, and inclusive.
Market Performance of LIC Shares
On the stock market front, LIC shares have seen a slight improvement, with prices rising by more than 1.5% recently. Despite a dip in the broader stock market, LIC’s share price stands at ₹946. Over the past month, its stock value has seen a decline of 8%, but since its listing in May 2022, LIC shares have managed to grow by 14%.
Final Thoughts
LIC’s Group Micro Term Insurance Plan is a practical and flexible solution tailored to the needs of financial institutions, groups, and their members. With its easy-to-understand benefits, no medical test requirement, and a focus on accessibility, this policy aims to provide financial protection for those who need it the most.
