Which is cheaper SBI term insurance or LIC term insurance

Which Is Cheaper: SBI Term Insurance or LIC Term Insurance in 2025?

Choosing the right term insurance plan is a critical step in securing your family’s financial future, and cost is often a deciding factor. In India, SBI Life Insurance and Life Insurance Corporation of India (LIC) are two of the most trusted names in the insurance market. Both offer robust term insurance plans, but which one is cheaper? The answer depends on factors like age, health, sum assured, policy term, and additional features. Based on the latest 2025 data, this article provides a comprehensive comparison of SBI Life and LIC term insurance premiums, highlighting their pricing structures, plan features, and value propositions to help you make an informed decision. By examining real-world scenarios and key considerations, we’ll uncover whether SBI Life or LIC offers the more cost-effective option for your needs.

Understanding Term Insurance and Premium Costs

Term insurance is a pure protection product that provides a high sum assured to your nominees if you pass away during the policy term, in exchange for regular premium payments. Unlike endowment or ULIP plans, it offers no maturity benefits, keeping premiums low and coverage high. This makes it ideal for covering financial liabilities like loans, education costs, or daily expenses. Premium costs are influenced by several factors:

  • Age: Younger policyholders pay lower premiums.
  • Health: Non-smokers and healthy individuals get better rates.
  • Sum Assured: Higher coverage may qualify for discounts.
  • Policy Term: Longer terms can increase premiums but spread costs.
  • Riders: Add-ons like critical illness or accidental death benefits raise premiums.
  • Payment Frequency: Options like single or limited premium payments affect overall costs.

SBI Life, a private insurer backed by State Bank of India and BNP Paribas Cardif, is known for competitive pricing and innovative features. LIC, the government-backed giant, commands trust with its legacy and extensive reach. Both operate under the Insurance Regulatory and Development Authority of India (IRDAI), ensuring reliability. Let’s compare their term insurance premiums to determine which is cheaper.

SBI Life Insurance: Affordable and Flexible

SBI Life Insurance, established in 2001, has grown into a leading private insurer with an Assets Under Management (AUM) exceeding ₹3 lakh crore in 2025. Its term plans, such as eShield Next, Smart Shield Plus, and Saral Jeevan Bima, are designed for affordability and flexibility, leveraging advanced risk assessment models. SBI Life’s high claim settlement ratio (99.20% in FY 2023-24) and digital-first approach make it a favorite among urban buyers.

SBI Life Premium Examples (2025 Estimates)

  1. 30-Year-Old Non-Smoker Male, ₹1 Crore Coverage, 30-Year Term:
    • Plan: eShield Next
    • Annual Premium: ₹8,000-₹10,000
    • Features: Level cover, optional increasing cover (10% annually from 6th year), terminal illness benefit.
  2. 50-Year-Old Non-Smoker Male, ₹50 Lakh Coverage, 20-Year Term:
    • Plan: Smart Shield Plus
    • Annual Premium: ₹15,000-₹20,000
    • Features: Flexible payouts (lumpsum or income), rider options.
  3. 60-Year-Old Non-Smoker Female, ₹25 Lakh Coverage, 10-Year Term:
    • Plan: Saral Jeevan Bima
    • Annual Premium: ₹12,000-₹15,000
    • Features: Simplified underwriting, no medicals for lower sums.

SBI Life offers discounts for non-smokers, women, and higher sums assured (e.g., ₹1 crore+), making it cost-effective for younger and healthier individuals. Its online purchase process further reduces costs by eliminating agent commissions.

LIC of India: Trusted but Pricier

LIC, founded in 1956, is India’s largest insurer, with an AUM surpassing ₹50 lakh crore and a market share of around 60% in 2025. Its term plans, like Digi Term, Jeevan Amar, and Jeevan Kiran, emphasize simplicity and government-backed reliability. LIC’s claim settlement ratio (96.42%-98.15% in FY 2023-24) is slightly lower than SBI Life’s, partly due to its massive claim volume (over 799,612 claims processed). While LIC’s extensive agent network ensures accessibility, its premiums tend to be higher, especially for pure term plans.

LIC Premium Examples (2025 Estimates)

  1. 30-Year-Old Non-Smoker Male, ₹1 Crore Coverage, 30-Year Term:
    • Plan: Digi Term
    • Annual Premium: ₹9,000-₹12,000
    • Features: Level or increasing cover, flexible payouts (lumpsum or installments).
  2. 50-Year-Old Non-Smoker Male, ₹50 Lakh Coverage, 20-Year Term:
    • Plan: Jeevan Amar
    • Annual Premium: ₹18,000-₹25,000
    • Features: Standard coverage, optional riders.
  3. 60-Year-Old Non-Smoker Female, ₹25 Lakh Coverage, 10-Year Term:
    • Plan: Jeevan Kiran
    • Annual Premium: ₹14,000-₹18,000
    • Features: Return of premium on survival, simplified options.

LIC’s premiums are generally higher, but it offers limited premium payment terms (e.g., paying for 10 years on a 20-year policy), which can reduce long-term costs for some buyers.

Head-to-Head Cost Comparison

Based on the examples above, SBI Life consistently offers lower premiums than LIC for similar coverage, especially for younger individuals and higher sums assured. Here’s a closer look:

  • Younger Buyers (Age 30-40): For a 30-year-old seeking ₹1 crore coverage, SBI Life’s eShield Next costs ₹8,000-₹10,000 annually, compared to LIC’s Digi Term at ₹9,000-₹12,000. SBI Life’s edge comes from its risk-based pricing and discounts for healthy lifestyles.
  • Middle-Aged Buyers (Age 50): For a 50-year-old with ₹50 lakh coverage, SBI Life’s Smart Shield Plus ranges from ₹15,000-₹20,000, while LIC’s Jeevan Amar costs ₹18,000-₹25,000. SBI Life remains cheaper, particularly for non-smokers.
  • Older Buyers (Age 60): For a 60-year-old with ₹25 lakh coverage, SBI Life’s Saral Jeevan Bima is priced at ₹12,000-₹15,000, compared to LIC’s Jeevan Kiran at ₹14,000-₹18,000. The gap narrows, but SBI Life is still more affordable.

Additional Cost Factors

  • Riders: SBI Life offers more rider options (e.g., critical illness covering up to 50 illnesses, accidental death benefits) at lower costs. LIC’s riders, like critical illness (fewer illnesses) and premium waivers, tend to be pricier.
  • Payment Options: LIC’s limited premium payment terms can reduce total outlay for older buyers, but SBI Life’s single premium option (e.g., paying upfront for eShield Next) may be more cost-effective for those with surplus funds.
  • Health and Lifestyle: SBI Life provides larger discounts for non-smokers and women, while LIC’s pricing is less differentiated, leading to higher base premiums.

Why SBI Life Is Often Cheaper

SBI Life’s lower premiums stem from its private-sector efficiency, advanced underwriting technology, and focus on online sales, which reduce operational costs. Its high claim settlement ratio (99.20%) ensures reliability despite lower prices, making it a strong value proposition. LIC, while trusted, faces higher operational costs due to its extensive agent network and public-sector structure, which can translate to higher premiums. However, LIC’s return-of-premium plans, like Jeevan Kiran, may appeal to those seeking maturity benefits, though these increase costs compared to pure term plans.

When LIC Might Be Competitive

LIC can be cheaper in specific cases:

  • Limited Premium Payment: If your parents are in their 50s and prefer paying premiums for a shorter period (e.g., 10 years for a 20-year term), LIC’s plans like Jeevan Amar may lower the total cost over time.
  • Rural Accessibility: LIC’s widespread agent network reduces the need for online literacy, potentially saving costs on intermediaries for rural buyers.
  • Smaller Sums Assured: For lower coverage (e.g., ₹25 lakh), LIC’s plans like Jeevan Kiran may have comparable premiums, especially with return-of-premium options.

Insights from 2025 Discussions

Online forums in 2025, including Reddit and social media platforms, frequently highlight SBI Life’s affordability for term insurance. Users praise plans like eShield Next for their low premiums and innovative features, such as increasing cover to combat inflation (e.g., 4.12% education inflation in May 2025). LIC garners loyalty for its government-backed trust, but critics note its higher premiums and slower digital adoption. Many recommend SBI Life for pure term plans and suggest pairing them with mutual funds for better returns, avoiding LIC’s bundled products.

Conclusion: Which Is Cheaper?

In most scenarios, SBI Life term insurance is cheaper than LIC for equivalent coverage, particularly for younger buyers, higher sums assured, and healthy individuals. For example, a 30-year-old can save ₹1,000-₹2,000 annually with SBI Life’s eShield Next compared to LIC’s Digi Term for ₹1 crore coverage. The gap narrows for older buyers or smaller sums, but SBI Life’s competitive pricing, rider flexibility, and digital convenience give it an edge. LIC may be preferable if you value limited premium payment options or prioritize government-backed reliability over cost.

To find the cheapest plan, use online calculators on SBI Life’s website or platforms like Policybazaar, factoring in your age, health, and coverage needs. Compare quotes, consider riders, and ensure accurate health disclosures to avoid claim issues. In 2025’s competitive market, SBI Life’s affordability and high claim settlement ratio make it the go-to choice for cost-conscious buyers, while LIC remains a solid option for those prioritizing trust and accessibility.

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