Lithium-indium di-selenide (LiInSe2) is a semiconductor material, which has been shown promising for applications in nonlinear optics and neutron detection. LiInSe2 crystals of optical quality, of different (from greenish to red) color were grown. Analysis of the fundamental absorption edge shows allowed direct band-to-band transitions and reveals structural disorder leading to the blurring of the edges of valence and conduction bands. Photoluminescence (PL) intensity is low in LiInSe2 of stoichiometric composition and increases after sample annealing in Se vapors. A narrow line at 408 nm is associated with free excitons. Analysis of PL and PL excitation spectra allows one to associate broad emission bands with point defects as well as with self-trapped excitons. The mean positron lifetime increases after annealing in Se vapor as a result of changes of the dominating defect type. For red crystals only big voids with lifetime of about 1021 ps are observed. Both methods suggest that greenish and red coloring of LiInSe2 are due to Se vacancies and interstitial Se atoms, respectively.