When families in Kolkata begin comparing life insurance, two names come up again and again: LIC of India and SBI Life. Both are trusted, well-established insurers, but they approach life cover quite differently. An LIC of India policy is often associated with traditional savings and endowment plans that combine a measure of protection with a maturity or savings component, while SBI Life is frequently considered for pure term insurance such as the SBI Life eShield Next plan, which focuses on high cover at a relatively modest premium. Understanding which structure suits your goal is the first step in making an informed choice.
This guide compares an LIC of India policy with SBI term insurance and SBI Life policy options in plain language, covering plan types, the important distinction between the sovereign guarantee on certain LIC policies and an insurer’s claim settlement ratio, riders such as critical illness cover, and how to think about the right sum assured. It is written for families in Kolkata, Garia, New Garia and Sonarpur, and is intended for general understanding only — it does not constitute financial advice. Suitability depends on your individual circumstances, and policy benefits are governed by the terms and conditions of the respective insurer.
LIC of India Policy Overview: Traditional Savings and Endowment Plans vs Pure Term Insurance
LIC of India offers a wide range of policies, but they broadly fall into two groups that serve very different purposes. Traditional savings and endowment plans — such as Jeevan Labh and Jeevan Umang — combine a life cover element with a savings or maturity benefit. Jeevan Labh is an endowment plan where the policyholder receives a lump sum maturity benefit on surviving the policy term, while the sum assured is paid to nominees if the insured person passes away during the term. Jeevan Umang, by contrast, is a whole-life plan that offers regular income payouts after the premium-paying term ends, along with life cover.
These plans appeal to families who want a disciplined savings route alongside some protection, and who value the familiarity and long history of LIC. However, because part of the premium goes towards the savings component, the pure protection per rupee of premium is typically lower than a term plan. The exact benefits, premium amounts, bonus rates and eligibility depend on the specific product and its current policy document, which should be read carefully before committing.
Pure term insurance from LIC, on the other hand, focuses on protection alone. It pays the sum assured to nominees if the insured person passes away during the policy term, and because it does not bundle a savings element, it generally offers a higher cover amount for a relatively modest premium. For families whose primary concern is income replacement — protecting dependants against the loss of the earning member’s income — a term plan is often the more suitable starting point.
SBI Term Insurance Breakdown: SBI Life eShield Next, Cover Options and Riders
SBI Life is a joint venture and a leading private life insurer, and its term insurance portfolio is often represented by the SBI Life eShield Next plan. This is a pure term plan designed to offer a high sum assured at a relatively affordable premium, making it a popular choice for families seeking cost-effective protection. As with any term plan, the focus is on the death benefit paid to nominees if the insured passes away during the policy term; there is typically no maturity or savings benefit unless a specific return-of-premium variant is selected.
Level cover vs increasing cover
A key decision in an SBI term insurance plan is the choice between level cover and increasing cover. With level cover, the sum assured stays the same throughout the policy term. With increasing cover, the sum assured increases at predefined intervals — often annually — to help the protection keep pace with inflation and growing responsibilities over time. Increasing cover usually starts at a lower initial sum assured and rises over the years, while level cover offers a fixed, predictable amount from day one. The right choice depends on your income trajectory, liabilities and how you expect your family’s needs to change.
Critical illness rider and other add-ons
Many SBI Life term plans offer optional riders, including a critical illness rider that typically pays a lump sum if the insured is diagnosed with one of the specified serious illnesses listed in the policy. This is separate from the base death benefit. The list of covered illnesses, their definitions, any survival period, sub-limits and waiting periods vary by product and insurer, so the rider wording in the current policy document should be read carefully before deciding. Other common riders may include accidental death and disability benefit riders, each with their own terms and exclusions.
Claim settlement track record
SBI Life’s claim settlement track record is a factor many families consider, but it should be read carefully. Claim settlement ratios (CSR) are published for specific financial years and use specific definitions — by number of claims or by amount, and for individual or group business — and the basis can differ between insurers. Always compare CSR using the insurer’s annual reports and public disclosures and the IRDAI Annual Report, reading the definition, period and type of business the figure covers before drawing any conclusion. A single ratio in isolation does not capture the full picture of how an insurer handles claims.
Key Comparison: Sovereign Guarantee, Premium Affordability and Choosing the Right Cover
One of the most important — and often misunderstood — distinctions between an LIC of India policy and a plan from a private insurer such as SBI Life concerns the sovereign guarantee. Certain traditional LIC policies carry a sovereign guarantee on the sum assured and bonuses, backed by the Government of India. This is a statutory guarantee specific to eligible LIC plans and is distinct from, and should not be confused with, an insurer’s claim settlement ratio. The sovereign guarantee relates to the backing of the benefits of qualifying policies; a CSR, by contrast, measures the proportion of claims an insurer has settled in a given period. The two concepts are not interchangeable.
On premium affordability, private insurers such as SBI Life often offer term plans at competitive premiums, sometimes lower than equivalent traditional plans, because term insurance carries no savings or maturity component. This can make a high sum assured more accessible for families on a budget. However, a lower premium alone should never be the sole basis for choosing a policy — the sum assured, policy tenure, exclusions, riders and the insurer’s service and claims record all matter.
When choosing the right cover, a widely used rough starting point is around 10 to 15 times your annual income, adjusted for outstanding loans, the number of dependants and future goals such as children’s education. This is a general rule of thumb for orientation only, not individualized financial advice. A needs-based calculation that adds up your actual obligations — outstanding loans, household expenses for the years your family would need support, and future goals, minus existing savings — usually gives a more reliable figure than any single multiple. The right cover balances meaningful protection with a premium you can sustain over the full policy tenure.
Local Claim Settlement, Branch Coordination and Documentation Support
For families in Kolkata, Garia, New Garia and Sonarpur, having local support during a claim can make a difficult time less stressful. Bappaditya Nath of NATH FINANCIAL SERVICES is an authorised LIC Advisor (LIC Agency Code: 1414241A) and a life insurance advisor serving the Kolkata area. He provides local guidance and documentation support to help nominees navigate the claim process — from intimating the insurer and organising the claim form and supporting documents, to coordinating with the relevant LIC branch.
For LIC policies, claim and policy servicing matters such as branch coordination, policy revival and documentation can often be handled through the Baruipur and Kolkata Division offices. Policy revival — the process of bringing a lapsed policy back into force — typically involves payment of overdue premiums and may require fresh health declarations or other formalities, subject to the insurer’s revival rules and the policy’s terms. Bappaditya helps families understand the revival process and gather the required documents, while the final decision rests with LIC.
For SBI Life and other private insurer policies, claim intimation is usually made through the insurer’s customer service, branch or online portal, and the documentation requirements are similar in principle — claim form, original policy document where available, death certificate where applicable, nominee identification and bank details, and medical or supporting documents where required. Exact requirements vary by insurer and claim circumstances, so it is best to confirm the current list with the insurer at the time of intimation. Bappaditya provides guidance to help you organise these documents, whether the policy is from LIC or a private insurer.
It is important to understand that claim approval and settlement are at the sole discretion of the insurer and depend on the policy terms, the disclosures made at application, applicable exclusions and the insurer’s assessment. Local support can make the process clearer and less stressful, but it cannot guarantee any claim outcome.
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This guide is for general understanding only and does not constitute financial advice. Book a free, no-obligation consultation with Bappaditya Nath for help specific to your needs.
