LIC's Bhagya Lakshmi Plan

Life Insurance Corporation of India is a fundamental factor in the widespread use of insurance products across India. LICs Bhagya Lakshmi Plan is one of the most effective microinsurance product that is designed to facilitate savings and act as an insurance and investment tool. LICs Bhagya Lakshmi Plan is a non-profit-participating plan that offers financial protection. The LICs Bhagya Lakshmi Plan is a limited premium payment plan that guarantees 110% of premium repayment on the date of maturity to the policyholder and pays a death benefit to the nominee in the case of death of the policyholder.

What are the key features of the LIC Bhagya Lakshmi Plan?

The LICs Bhagya Lakshmi plan offers the following key features to the policyholders :

  • This is a micro-insurance limited premium protection plan
  • The plan is designed to cater to the insurance needs of people of the low-income group
  • The plan has various modes of premium payments for the policyholder to choose from
  • The policy can be surrendered any time after accruing paid-up value

Thus, above are the features offered by the LICs Bhagya Lakshmi Plan.

What are the benefits offered under the LIC Bhagya Lakshmi Plan?

The LICs Bhagya Lakshmi Plan is designed to cater to the finance and insurance needs of the people belonging to the lower income group. The Bhagya Lakshmi Plan can act as the best investment and saving tool for boosting investment and securing future financial needs. The LICs Bhagya Lakshmi Plan offers following benefits to the policyholder :

  • Maturity Benefit : Maturity Benefit is paid to the policyholder on surviving the entire policy term. The maturity benefit is paid on the date of maturity of the policy i.e. at the end of the tenure of the policy. The maturity benefit payable by LIC under the Bhagya Lakshmi Plan is equivalent to 110% of the total amount of premiums paid by the policyholder during the tenure of the policy. Kindly note, the calculation of maturity benefit the premium amount shall not include the amount paid towards taxes or any extra premium paid during the tenure of the policy.
  • Death Benefit : The death benefit is paid in event of eventuality provided the policy is in force. The death benefit payable under the Bhagya Lakshmi Plan is equivalent to the sum assured opted under the basic plan.

What are the eligibility criteria of the LICs Bhagya Lakshmi Plan?

In order to avail the LICs Bhagya Lakshmi Plan, the policyholder has to fulfil certain eligibility criteria and conditions. If the policyholder fits in the pre-defined eligibility criteria then the policyholder can easily purchase the LICs Bhagya Lakshmi plan for safeguarding the future financial needs of their loved ones. Following are the basic eligibility criteria and conditions of the LICs Bhagya Lakshmi Plan :

Particulars Conditions
Minimum Age at Entry 18 Years completed
Maximum Age at Entry 55 Years Nearing Birthday
Minimum Premium Paying Term 5 years
Maximum Premium Paying Term 13 years
Minimum Policy Tenure Minimum Premium Paying Term + 2 Years i.e. 7 Years
Maximum Policy Tenure Maximum Premium Paying Term + 2 Years i.e. 15 Years
Maximum Age at Maturity 65 Years Nearing Birthday
Minimum Sum Assured Rs 20,000
Maximum Sum Assured Rs 50,000

What are the documents required while buying the LICs Bhagya Lakshmi Plan?

Following is a list of related relevant documents required for purchasing LICs Bhagya Lakshmi Plan :

  • A latest coloured passport sized photograph
  • Xerox Copy of Identity Proof
  • Xerox Copy of Age Proof
  • Xerox Copy of Address Proof
  • A completely filled proposal form
  • Premium amount cheque or cash

Upon receipt and validation of all the above relevant required documents and on receipt of the premium amount LIC shall issue the Bhagya Lakshmi Policy.

What are the premium rates of the LICs Bhagya Lakshmi Plan?

The premium of the LICs Bhayga Lakshmi Plan is decided as per the premium rates stated in the tabular premium rate chart. This tabular premium rate chart determines the annual premium per Rs 1,000 of sum assured opted under the basic plan by the policyholder.

Following is the sample illustration of the premium rate chart of the LICs Bhagya Lakshmi Plan :

Age of the insured Policy term: 7 years
Premium paying term: 5 years
Policy term: 10 years
Premium paying term: 8 years
Policy term: 15 years
Premium paying term:13 years
For 20 Years 127.45/INR 1,000 sum assured 64.35/INR 1,000 sum assured 37.20/INR 1,000 sum assured
For 30 years 129.30/INR 1,000 sum assured 65.80/INR 1,000 sum assured 38.55/INR 1,000 sum assured
For 40 years 138.30/INR 1,000 sum assured 72.80/INR 1,000 sum assured 44.25/INR 1,000 sum assured
For 50 years 164.10/INR 1,000 sum assured 91.40/INR 1,000 sum assured 57.15/INR 1,000 sum assured

Sample premium : For LIC Bhagya Lakhsmi Plan per INR 1,000 sum assured.

Age 30 years
Policy Tenure 15 years
Premium Paying Term 13 years
Premium factor 38.55
Sum Assured INR 30,000
Premium = 38.55/1000*30,000
Annual Premium INR 1,156.50 + applicable taxes

Mode Rebate

Annual 2% of Tabular Premium
Semi Annual 1% of Tabular Premium
Quarterly and Monthly NIL

High Sum Assured discount : NIL

What are the different modes of premium payment?

LIC for the ease of its customers has introduced various premium payment modes for the ease of payment of premium to the policyholders. The policyholder can choose the premium payment mode as per their convenience. The premium payment modes offered under the LICs Bhayga Lakshmi Plan are as under :

  • Yearly
  • Half Yearly
  • Quarterly
  • Monthly
  • Salary Deduction

The policyholder’s of the LICs Bhagya Lakshmi plan have to pay the premiums on or before the stipulated due date further LIC also provides a grace period of 2 months i.e. not less than 60 days period for the payment of premium. If the policyholder fails to pay the unpaid premium the policy shall stand lapsed and all the benefits of the policy shall cease.

How to revive the lapsed Bhagya Lakshmi policy?

LICs Bhagya Lakshmi Plan lapsed policy can be revived by paying the unpaid premiums plus interest, if any, within the period of 2 consecutive years starting from the date of first unpaid premium but before the end of policy tenure i.e. before the maturity date of the policy. The policy shall be revived upon payment of unpaid premiums, interest and submission of the proof of continued insurability to LIC.

How to surrender the Bhagya Lakshmi Policy?

The LICs Bhagya Lakshmi policy can at any given time during the tenure of the policy be surrendered. The process for surrendering the policy is very simple. in order to surrender the policy the policyholder has to submit the following documents to the nearest LIC Office or branch:

  • Original Policy Bond
  • Completely filled surrender discharge form
  • Xerox copy of identity proof
  • Duly filled NEFT mandate form to receive credit in the bank account

Upon submitting the above-stated documents LIC shall register the surrender claim and credit the surrender value of the policy in the policyholder’s bank account. Kindly note the surrender value is payable only if the premium of one policy year has been paid in full. A guaranteed surrender value shall be payable which is equivalent to the premiums paid till the date of surrendering the policy. The guaranteed surrender value is determined using the guaranteed surrender value factor. The guaranteed surrender value factor of LICs Bhagya Lakshmi Plan is expressed in terms of percentage and is based on the policy term and the policy year in which the Bhagya Lakshmi policy was surrendered by the policyholder.

Following is a sample illustration depicting the guaranteed surrender value factor applicable to total premiums paid :

Policy year of surrender Policy term 7 years Policy term 10 years Policy term 15 years
5 50.00% 50.00% 50.00%
7 80.00% 50.00% 50.00%
10 - 80.00% 62.86%
12 - - 71.43%
15 - - 80.00%

Kindly note, under the Bhagya Lakshmi Policy, special surrender value shall be paid if it is more favourable to the policyholder. The special surrender value shall be calculated as per the special surrender value factor * maturity paid-up sum assured.

What are the documents required for registering the claim of LICs Bhagya Lakshmi Plan?

For registering a normal death claim under the LICs Bhagya Lakshmi Plan the nominee has to submit the following documents to LIC :

  • Original policy bond
  • Required relevant duly filled Claim forms
  • NEFT mandate form
  • Proof of title
  • Proof of death
  • Proof of medical treatment if applicable

While in case of maturity claim registration the policyholder is required to submit the following documents:

  • Original policy bond
  • NEFT mandate form
  • Duly filled discharge form
  • Proof of age if not submitted earlier

Thus upon receipt of relevant required documents, LIC shall register and process the death claim or maturity claim and pay the benefit. Once the benefit is paid to the policyholder or nominee, in case of the death benefit, the insurance contract shall come to an end.

What are the exclusions of the LIC Bhagya Lakshmi Plan?

The exclusion under the LIC Bhagya Lakshmi plan is suicide. If the life insured’s death is due to suicide, then the policy and its benefits shall stand void but only following benefit shall be paid –

  • If the insurer commits suicide within the first policy year i.e. within 12 months of commencement date in such cases 80% of the premiums paid
  • If the insured commits suicide within 12 months of the revival of the policy in such cases higher of - 80% of the premiums paid or the surrender value applicable under the plan shall be paid.

Kindly note, the above benefit shall only be paid if the policy is in force.


FAQs

The LICs Bhagya Lakshmi Plan offers the following premium payment modes

  • Yearly
  • Half Yearly
  • Quarterly
  • Monthly
  • Salary Deduction

Yes, the LICs Bhagya Lakshmi Plan offers a grace period of two months i.e. not less than 60 days as a grace period for payment of unpaid premiums. If the policyholder fails to pay the premium within the completion of grace period the policy stands lapsed.


No, the LICs Bhagya Lakshmi plan does not offer loan on policy.


Yes, if the policyholder is not satisfied with the terms and conditions of the policy he / she can cancel the policy by returning the policy to LIC. The policyholder must return the original policy bond to LIC along with a letter stating the valid reason for cancellation. This cancellation of policy can be done in the free-look period or the cooling-off period offered by the Life Insurance Corporation of India.


If the policyholder returns the policy to LIC in the free look period then LIC registers the request under cancellation of policy and returns the premium to the policyholder after deduction of certain charges related to stamp duty, the premium for the period on cover etc.


Yes, the plan allows rebates on the choice of mode of premium payment as under:

  • 2% rebate on the tabular premium for Yearly mode of premium payment
  • 1% rebate on the tabular premium for the half-yearly mode of premium payment.
  • While there is no rebate offered on the high sum assured under this plan

The surrender value / paid-up value under this plan will accrue

  • For policies having premium paying term less than 10 years - After payment of 2 years full premium
  • For policies having premium paying term more than 10 years - After payment of 3 years full premium

Other LIC's Micro Insurance Plans