LIC launched three new individual insurance plans on 13 October 2026, with sales beginning on 19 October: New Jeevan Dhara-II (Plan 892), Health Shield (Plan 907) and New Cancer Cover (Plan 908). The state-owned insurer is targeting three separate financial worries at once, namely retirement income, hospital bills and the cost of cancer treatment. The launch also marks LIC’s return to family health insurance, a segment where private insurers and standalone health companies have built a strong presence.
Why LIC Launched Three New Plans Together
India’s insurance market is large in volume but thin in cover. Insurance penetration stood at 3.7% of GDP in 2024-25, with life insurance at 2.7%, while the global average was 7.3% in 2024. Insurance density, the premium paid per person, was $97 in India against $943 globally. LIC dominates this under-insured market. It held a 56.66% share of first-year premium in FY26, managed assets of ₹57,29,396 crore and served almost 200 million policyholders.
The three products address gaps outside LIC’s traditional strength in savings and protection. India’s elderly population is projected to reach 346 million, or about 21% of the population, by 2050, yet formal pension coverage remains limited. The National Pension System (NPS) had 2.17 crore subscribers and the Atal Pension Yojana (APY) had 8.96 crore enrolments as on 31 March 2026. On the health side, cancer incidence is projected at nearly 15.7 lakh cases in 2025, and treatment costs push many households into debt.
Policy changes have made the timing easier. Individual life and health insurance premiums became exempt from the earlier 18% GST on 22 September 2025. The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, passed in December 2025, raised the foreign direct investment limit in insurance to 100% and gave LIC more operational autonomy. Competition is also pushing LIC to widen its shelf beyond endowment and money-back plans.
Health insurance is now the largest non-life segment, contributing 41% of gross domestic premium and overtaking motor insurance. LIC had withdrawn its earlier fixed-benefit health products, leaving a visible gap in its portfolio. LIC’s individual health insurance shelf now rests on two products, Health Shield for hospitalisation and New Cancer Cover for cancer, while New Jeevan Dhara-II strengthens its pension line.
What Is LIC’s New Jeevan Dhara-II (Plan 892)?
LIC’s New Jeevan Dhara-II (Plan 892) is a non-participating, non-linked, individual savings deferred annuity plan. A buyer pays premiums now, waits through a deferment period of 1 to 15 years depending on the premium mode, and then receives a guaranteed lifetime annuity on the vesting date. It is the corporation’s newest deferred pension plan for buyers who want a guaranteed income beginning at a future date.
Deferred annuity plans work differently from immediate annuities. In an immediate annuity, the pension starts almost at once after a lump-sum purchase. In a deferred plan, the buyer gets time to build the corpus, and the insurer fixes the annuity rate at the start. That locked-in rate protects the buyer from falling interest rates later, which is the main attraction of Plan 892.
| Feature | Detail |
|---|---|
| Plan number and UIN | Plan 892, UIN 512N398V01 |
| Plan type | Non-participating, non-linked, individual savings deferred annuity |
| Minimum entry age | 18 years (last birthday) |
| Maximum entry age | 65 or 70 years minus the deferment period, depending on the option |
| Minimum vesting age | 30 years (last birthday) |
| Maximum vesting age | 65 or 70 years, depending on the option |
| Deferment period | 2 to 15 years for regular premium; 1 to 15 years for single premium |
| Premium modes | Regular premium and single premium |
| Annuity options | 11 options covering single life, joint life and return of purchase price |
Eligibility and Deferment Rules
The minimum age at entry is 18 years (last birthday). The maximum entry age is 65 or 70 years, minus the chosen deferment period, depending on the annuity option. The minimum vesting age is 30 years, while the maximum vesting age is 65 or 70 years. Vesting is simply the date on which the annuity begins.
Deferment runs from 2 to 15 years under regular premium and 1 to 15 years under single premium. That two-year floor is shorter than the five-year minimum under the earlier Jeevan Dhara-II (Plan 872), which makes the product usable for people who are close to retirement. Premiums can be paid regularly or as one lump sum.
Eleven Annuity Options and Top-Up Annuity
The plan offers 11 annuity options. These include a plain single-life annuity, single-life variants that return the purchase price to the nominee, options that return part or all of the purchase price at ages 75 or 80, and joint-life annuities that continue for a second annuitant. Each option produces a different annuity rate because the insurer’s payout obligation differs.
A top-up annuity facility lets the policyholder pay extra premium during the deferment period and buy additional annuity. The rate for the top-up is not the original locked rate; it follows the rates prevailing when the top-up premium is paid. LIC also offers incentives for high purchase prices and for existing policyholders, nominees and beneficiaries of deceased LIC policyholders.
What Is LIC’s Health Shield (Plan 907)?
LIC’s Health Shield (Plan 907) is a non-participating, non-linked, individual fixed-benefit health plan for the whole family. It pays a daily hospital cash benefit, doubles it for ICU stays, and adds lump sums for listed major surgeries and critical illnesses, regardless of the actual hospital bill.
Health Shield is a fixed-benefit plan, not an indemnity plan. A normal mediclaim policy reimburses actual hospital expenses, subject to room-rent caps and sub-limits. Health Shield pays a pre-agreed amount when a covered event occurs. The money can be used for the hospital bill, attendant charges, travel, consumables or lost income. It supplements a mediclaim policy rather than replacing it.
What the Plan Pays
The plan is built around the Applicable Daily Benefit (ADB), which the buyer chooses at the start. LIC offers daily benefit tiers from ₹1,000 to ₹10,000 per day, in steps of ₹1,000. The main payouts are:
| Benefit | What it pays |
|---|---|
| Daily hospital cash | Fixed daily amount for each eligible day of hospitalisation beyond 24 hours |
| ICU benefit | Twice the applicable daily benefit for each day in intensive care |
| Major surgical benefit | 100 times the applicable daily benefit, up to ₹10,00,000 |
| No claim benefit | 10% of the initial daily benefit added for every claim-free policy year |
| Health check-up benefit | Payout after 3 policy years and again at years 6, 9, 12 and 15 |
| Premium waiver | Future premiums waived for other insured members if the principal insured dies |
Hospital cash is capped at 30 days in the first policy year and 900 days over the full policy term, including ICU stays. The major surgical benefit is restored if it is exhausted in a policy year, subject to policy conditions. Premiums are guaranteed for the entire term, so they do not change with age or medical inflation.
Family Cover and Auto Health Cover
The principal insured must be between 18 and 65 years at entry. Children aged 90 days to 20 years can be covered as other insured members. The policy term and premium-paying term are both 15 years. Spouses and parents can be included, and newly married spouses or newborn and adopted children can be added during the term by paying a pro-rata premium.
The Auto Health Cover benefit is the plan’s most distinctive feature. If the principal insured dies during the 15-year term, future premiums for the surviving insured members are waived, and their cover continues to the end of the term. The spouse or the eldest surviving major insured can step in as the new principal insured without fresh underwriting. Optional riders, including a term assurance rider and an accident benefit rider, are available at extra premium.
What Is LIC’s New Cancer Cover (Plan 908)?
LIC’s New Cancer Cover (Plan 908) is a non-participating, non-linked, individual pure-risk health plan. It pays a fixed lump sum on the diagnosis of specified early-stage or major-stage cancer, plus a monthly income after a major-stage diagnosis, irrespective of the actual treatment cost.
Cancer treatment is financially different from a short hospital stay. Surgery, chemotherapy, radiation and long follow-up can continue for years, and income often falls at the same time. A fixed payout gives the family immediate liquidity without waiting for bills to be settled. Because Plan 908 is a pure risk plan, it does not return premiums or pay a maturity benefit if no claim is made.
Early Stage and Major Stage Payouts
The plan pays 25% of the applicable sum assured on the diagnosis of a specified early-stage cancer. On a specified major-stage cancer, it pays 100% of the applicable sum assured, adjusted for any early-stage benefit already paid. The early-stage benefit is payable once during the policy’s lifetime.
After a major-stage diagnosis, the policyholder also receives a monthly income equal to 1% of the applicable sum assured for 10 years, or 120 months. If the policyholder dies during this period, the remaining instalments go to the nominee. For a ₹20 lakh sum assured, the monthly income works out to ₹20,000, or ₹24 lakh over ten years. All future premiums are waived after an eligible cancer diagnosis.
Buyers can choose between a level sum assured and an increasing sum assured. Under the increasing option, the sum assured rises by 10% of the basic sum assured on each of the first five policy anniversaries, reaching 150% of the basic sum assured from the sixth policy year. The increase stops once any specified cancer is diagnosed.
Sum Assured Bands and Eligibility
Plan 908 sets age-banded minimum sum assured levels, unlike older cancer policies that allowed a flat ₹10 lakh cover. The minimum basic sum assured ranges from ₹15 lakh to ₹35 lakh, depending on the buyer’s age. The maximum is ₹50 lakh, counting all existing policies under the plan.
| Entry age | Minimum basic sum assured |
|---|---|
| 18 to 34 years | ₹35,00,000 |
| 35 to 40 years | ₹30,00,000 |
| 41 to 50 years | ₹20,00,000 |
| 51 to 65 years | ₹15,00,000 |
The minimum and maximum age at entry is 18 and 65 years respectively. The minimum and maximum age at maturity is 28 and 75 years. The premium-paying term can be 10 to 15 years, and the sum assured is chosen in multiples of ₹1 lakh. Waiting periods, survival conditions and the exact list of covered early-stage and major-stage cancers are set out in the policy document.
How the Three New LIC Plans Compare
The three products sit in different parts of a household’s financial plan. One builds retirement income, one pays cash during hospitalisation, and one provides a lump sum and monthly income after a cancer diagnosis. Together, LIC’s new plans for 2026 cover needs that were earlier split between pension funds, general insurers and standalone health insurers.
| Parameter | New Jeevan Dhara-II (892) | Health Shield (907) | New Cancer Cover (908) |
|---|---|---|---|
| Main purpose | Guaranteed lifetime pension after retirement | Fixed cash for hospitalisation, surgery and critical illness | Fixed payout on diagnosis of specified cancer |
| Plan type | Savings deferred annuity | Fixed-benefit family health plan | Pure-risk cancer plan |
| UIN | 512N398V01 | 512N369V01 | 512N370V01 |
| Entry age | 18 years to 65 or 70 years minus deferment | 18 to 65 years for principal insured; 90 days to 20 years for children | 18 to 65 years |
| Term | Deferment of 1 to 15 years, then lifetime annuity | 15 years | 10 to 15 years |
| Core payout | Lifetime annuity at a rate guaranteed at inception | Daily hospital cash, ICU cash and lump sums for major surgery or critical illness | 25% of sum assured for early-stage cancer; 100% for major-stage cancer |
| Distinct feature | 11 annuity options and top-up annuity during deferment | Auto Health Cover waives future premiums if the principal insured dies | Monthly income of 1% of sum assured for 10 years after major-stage cancer |
A household can hold more than one of these products because they solve separate problems. Plan 892 addresses longevity risk, the danger that savings run out before the person does. Plan 907 addresses the cash drain that continues even when a mediclaim policy has settled the main hospital bill. Plan 908 addresses the long, expensive treatment pathway of cancer. None of them replaces a basic term insurance policy or a standard indemnity health cover.
What This Means for LIC and India’s Insurance Market
The launch is as much about LIC’s product mix as about the three policies. LIC earns most of its premium from participating endowment and money-back plans, where bonuses depend on the corporation’s surplus and investment returns. Non-par products such as these three carry fixed promises and produce steadier margins. In FY26, non-par policies accounted for 35.11% of individual APE, up from 27.69% in FY25, and LIC’s value of new business rose 41.63% to ₹14,179 crore. The new plans extend that shift into retirement and health.
LIC’s distribution reach is its main advantage in health. The corporation has about 14.57 lakh agents (as of March 2026), or 44.25% of the life insurance agency force, and sells through branches, corporate agents, brokers and its website. Health insurance is currently led by general insurers and standalone health insurers. LIC can use its agency network to reach customers in smaller towns who may not approach a general insurer for cover.
Competitive pressure is rising. The 2025 insurance law allows up to 100% foreign direct investment, which can bring more foreign capital and product expertise into India. LIC’s overall first-year premium market share slipped from 57.05% in FY25 to 56.66% in FY26. A wider product shelf, especially in health and annuities, is one way to defend share without relying only on traditional savings plans.
The macro gap remains large. Insurance penetration at 3.7% of GDP is about half the global average, and life insurance density of $72 per person is far below the global $388. The stated goal of Insurance for All by 2047 depends on products that are simple, affordable and widely distributed. A fixed-benefit health plan and a cancer cover are easier to explain than a complex unit-linked product, which helps in mass distribution.
What Buyers Should Keep in Mind
All three plans are non-par and non-linked. Non-par means the policyholder does not share in LIC’s surplus through bonuses; the benefits are fixed when the policy is issued. Non-linked means the money is not invested in a market-linked fund, so there is no net asset value and no direct investment risk for the policyholder. The trade-off is certainty: returns are known in advance and are usually modest.
The Unique Identification Number (UIN) printed on each policy is issued by the Insurance Regulatory and Development Authority of India (IRDAI). IRDAI was set up in 1999 under the Insurance Regulatory and Development Authority Act, 1999, and is headquartered in Hyderabad. A UIN confirms that the product has been filed with the regulator.
For Health Shield, buyers should compare the daily benefit with actual hospital costs in their city. A ₹3,000 daily cash benefit may cover much of a room charge in a tier-2 city but only a fraction in a metro. The plan pays only for listed surgeries and critical illnesses, caps hospitalisation at 30 days in the first policy year, and applies waiting periods. It is a supplement, not a substitute, for an indemnity policy.
New Cancer Cover depends heavily on definitions. The policy pays only for specified early-stage and major-stage cancers, and some very early thyroid, prostate or bladder cancers may be classified differently. Buyers should read the waiting period, survival period and exclusions before assuming that the full sum assured is payable for every cancer diagnosis.
For New Jeevan Dhara-II, the main risk is inflation. The annuity is fixed in rupee terms, so its purchasing power falls over a long retirement. The top-up facility helps, but top-ups are priced at the rates prevailing at that time, not the original rate. Annuity income is taxable in the year of receipt under the head income from other sources, so the post-tax income matters more than the headline annuity rate. Premiums may qualify for deduction under Section 80C only if the buyer opts for the old tax regime.
LIC’s sovereign backing is a genuine comfort. Under Section 37 of the Life Insurance Corporation Act, 1956, the Central Government guarantees that the sums assured and bonuses payable under LIC policies will be paid. That backing does not remove product risk, but it removes the risk of the insurer failing to honour a contractual promise.
Key Takeaways
- LIC launched New Jeevan Dhara-II (Plan 892), Health Shield (Plan 907) and New Cancer Cover (Plan 908) on 13 October 2026, with sales beginning on 19 October 2026.
- New Jeevan Dhara-II is a non-par, non-linked deferred annuity plan with 11 annuity options; the deferment period is 2 to 15 years for regular premium and 1 to 15 years for single premium.
- Health Shield pays daily hospital cash of ₹1,000 to ₹10,000, ICU cash at twice that rate, and a major surgical benefit of 100 times the applicable daily benefit.
- Health Shield’s Auto Health Cover waives future premiums for other insured members if the principal insured dies during the 15-year policy term.
- New Cancer Cover pays 25% of the sum assured for a specified early-stage cancer and 100% for a specified major-stage cancer.
- After a major-stage cancer diagnosis, Plan 908 pays 1% of the sum assured every month for 10 years, and the remaining instalments go to the nominee if the policyholder dies.
- The minimum sum assured under Plan 908 ranges from ₹15 lakh to ₹35 lakh depending on entry age, with a maximum of ₹50 lakh across all policies under the plan.
- Individual life and health insurance premiums have been exempt from GST since 22 September 2025.
