LIC's New Bima Bachat Plan

For millions and millions of Indians, insurance means LIC, not just because it is the biggest insurance company in the country but also because even after 6 decades in the business there seems to be hardly any competition to the Corporation. LIC has been the first choice for so many insurance seekers also because it is a 100% government-owned company. There are various plan and products that have been launched by LIC one the years. Different plans cater to the different requirements of people.

LIC’s New Bima Bachat Policy is a money back policy that not only provides hassle free insurance but also caters to the growing needs of an individual and his family. The New Bima Bachat plan by LIC is a single premium, participating Endowment Plan. Under this conventional money back plan, a lump Sum premium amount is paid at the time of purchase. During the tenure of the plan, the policyholder at regular intervals receives money-back benefits. The plan can be bought by paying a single premium.

Key Features LIC’s New Bima Bachat Plan

  • This is a simple money back plan that comes with a bonus option.
  • The plan is available for a tenure of 9, 12 and 15 years.
  • If the policy holder survives the end of every consecutive 3 years, as a survival benefit 15% of the Sum assured is paid to the policy holder.
  • At the end of the tenure of the policy, the amount paid as the single premium and the loyalty additions are paid as the Maturity Benefit.
  • If the policy holder passes away during the policy term, the beneficiary receives the complete Sum assured and the loyalty additions.
  • Discount on the premium paying amount is available when a higher Sum assured is chosen.

Maturity Benefit
Maturity benefit is received when the policy holder outlives the term of the policy.

For example an individual has purchased LIC’s New Bima Bachat for 12 years, then at the end of the term he will receive the
Maturity Benefit =

  • Single Premium paid (excluding taxes) +
  • Loyalty Additions

Death Benefit
The death benefit is the lump Sum amount that the appointed nominee will receive if the insured dies during the term of the policy.
Under the LIC’s New Bima Bachat Plan :

  • Death within 5 years of buying Policy
    When the insured dies within 5 years of purchasing the policy, then the Sum assured is paid to the nominee.
  • Death after 5 years of buying the Policy
    When the insured individual dies after the 5th anniversary of the LIC’s New Bima Bachat plan, the nominee receives the Sum assured along with certain loyalty additions.

Loyalty Additions
LIC Pays Loyalty Additions for all claims for LIC New Bima Bachat after completion of 5 policy years. Thus,Loyalty Additions would be payable to Death Claims after 5 policy years as well as all Maturity Claims. This is a part of profits as declared by LIC from time to time.

Survival Benefit
The survival benefits are payable as follows :

Benefit Paid at the end of
3rd year 6th year 9th year 12th year 15th year
9 years Policy Term Survival Benefit = 15% of the Basic Sum Assured Survival Benefit = 15% of the Basic Sum Assured Maturity Benefit = Single Premium + Loyalty Additions
12 years Policy Term Survival Benefit = 15% of the Basic Sum Assured Survival Benefit = 15% of the Basic Sum Assured Survival Benefit = 15% of the Basic Sum Assured Maturity Benefit = Single Premium + Loyalty Additions
15 years Policy Term Survival Benefit = 15% of the Basic Sum Assured Survival Benefit = 15% of the Basic Sum Assured Survival Benefit = 15% of the Basic Sum Assured Survival Benefit = 15% of the Basic Sum Assured Maturity Benefit = Single Premium + Loyalty Additions

Other Important Features of LIC’s New Bima Bachat Plan

Production Specification

Minimum Maximum
Entry Age 15 years 66 Years for Policy tenure of
9 years
63 Years for Policy tenure of
12 years
60 Years for Policy tenure of
15 years
Maturity age - 75 years
Policy Term 9 and 12 years 15 years
Premium Paying Term Single
Sum Assured INR 35,000 for Policy tenure
of 9 years
INR 50,000 for Policy tenure
of 12 years
INR 70,000 for Policy tenure of 15 years
No Limit

Surrender Value
The policy holder has the option to surrender the LIC’s New Bima Bachat policy for cash. If the policy is being surrendered in the first year itself, then 70% of the Single Premium that has been paid, is payable to the policy holder.

  • This amount excludes the extra premium and the taxes.
  • In case the policy is being surrendered after the policy’s first anniversary, 90% of the Single Premium that has been paid, is payable to the policyholder.
  • This amount does not include the extra premium and the taxes. In case it is more beneficial to the investor, Special Surrender Value will be paid to him.
  • Special Surrender Value is a discounted value of the Single Premium has been paid. The contributing factors are approved by the IRDAI regularly.

Loan
The policy holder can ask for a loan that equals 60% of the surrender value of the LIC’s New Bima Bachat policy. It is a necessary pre-condition that the policy has been running for one year. The terms and conditions of the loan are determined by the Corporation. The interest rates are compounded half yearly at rates that are defined by the Corporation when the loan is sanctioned.

Cooling-Off Period
When a policy holder invests in LICs New Bima Bachat Policy, he is given a cooling-off period. In this 15-day period if the investor feels that the plan is not as per his requirements he can return the policy to the Corporation mentioning the reason of objection.

How LIC’s New Bima Bachat Policy works?

When a policy holder is buying a policy, he has to select a Sum assured and a tenure for the policy. Depending on his age the premium amount is decided. There are 3 options to choose the policy term - 15 years,12 years and 9 years.

  • For a Term of 9 years - 15% of Sum assured is paid at the end of 3 and 6 years. In all 30% of the Sum assured is paid as Survival Benefit.
  • For a Term of 12 years - 15% of Sum assured is paid at the end 3, 6 and 9 years. In all 45% of the Sum assured is paid as Survival Benefit.
  • For a Term of 15 years -15% of the Sum assured is paid at the end of 3, 6, 9 and 12 years. In all 60% of Sum assured is paid as Survival Benefit.

The Maturity Benefit is received by the policyholder if he outlives the complete term of the policy, irrespective of the Survival Benefit received.

Maturity Benefit = Single Premium Paid - Taxes + Loyalty Additions

However, if the insured passes away before the maturity of the plan, the appointed nominee receives the death benefits.

  • If he dies within the first 5 policy years, the nominee receives the complete Sum assured. Even if the survival benefits have been paid, the complete Sum assured will be paid.
  • If the demise takes place after 5 years, the nominee will receive the complete Sum assured along with the loyalty additions.

The working will be better understood with the help of an example.

Let us suppose, Mr Naveen buys LIC’s New Bima Bachat policy at the age of 35 years. He chooses a Sum assured of INR 5 lakhs and a term policy of 12 years. The Single Premium he would have to pay would be INR 3,64,415.

Situation 1
Mr Naveen survives the policy term of 12 years, the benefits that he receives would be :

  • 3rd anniversary of the policy : 15% of Sum assured = INR 75,000
  • 6th anniversary of the policy : 15% of Sum assured = INR 75,000
  • 9th anniversary of the policy : 15% of Sum assured = INR 75,000

When at 12 years the plan matures, he would receive the Single Premium of INR 3,64,415 and loyalty additions.

Total Benefit received = Rs 5,89,415 + Loyalty Additions, as declared by LIC from time to time

Total Premium paid = Rs 3,64,415 + taxes

Situation 2
Suppose Mr Naveen passes away in the 7th year of the policy, then:

  • 3rd anniversary of the policy : 15% of Sum assured = INR 75,000
  • 6th anniversary of the policy : 15% of Sum assured = INR 75,000

At his death the nominee would receive INR 5 lakh as the Sum assured despite the benefits that have been availed already. The policy has completed a tenure of 5 years therefore, the nominee is also eligible for loyalty addictions.

Total Benefit received = Rs 6,50,000 + Loyalty Additions, as declared by LIC from time to time

Total Premium paid = Rs 3,64,415 + taxes

How to buy LIC’s New Bima Bachat Policy?

LIC’s New Bima Bachat Policy is an offline policy, which means it is not available online and has to be through a registered agent or a distributor. The policy can also be bought from an LIC Branch Office. When buying the policy, the following documents would be required :

  • Proof of Address
  • KYC Documents
  • Proof of Birth/Age
  • Proof of Income
  • Duly filled and signed Corporation Application Form
  • A Cheque for the Premium Amount
  • Medical Exam Report, if asked
  • 2 Passport Sized photographs

What are premium rates of LIC New Bima Bachat Plan?

A sample rate of single premium for LIC New Bima Bachat Plan is as under :

Policyholder’s Age (nearest birthday) Policy Term
9 years 12 years 15 years
15 years 767.95 771.00 771.55
25 years 768.95 772.00 772.70
35 years 771.70 775.35 776.80
45 years 782.65 787.15 789.25
55 years 803.80 808.10 810.70
65 years 836.85 - -

Above is the sample tabular representation of annualized premium rates of LICs New Bima Bachat Plan. Kindly note that these premium rates are exclusive of service tax and are charged per Rs 1000 of sum assured of the basic policy.

How to calculate the premium of LIC New Bima Bachat Policy?

Example :
Let us understand with an example of how the tabular premium rate chart can be used to derive the premium amount of the LIC New Bima BachatPlan.

  • Mr X = Age 35 years
  • Basic Sum Assured = Rs 3,00,000
  • Policy Tenure = 12 years
  • Premium factor : 775.35

Annual Premium :
= 775.35/1000 * Rs 3,00,000
= Rs 2,32,605+ Tax
(Since premium rates are of Rs 1000 per basic sum assured)

However, after discount it comes to Rs 2,30,805 + Tax.


FAQs

LIC’s New Bima Bachat Policy is a single premium policy that gives the dual benefits of protection as well as saving. The survival benefits that are received by the policy holder throughout the tenure of the policy provide him with an access to liquidity at regular stages. Investing in LIC’s New Bima Bachat Policy is surely a smart choice.


A single premium policy is an insurance policy only. But in a single premium policy rather than paying regular instalments, a lump Sum amount is paid at the onset of the policy. The Sum assured depends on the amount that has been invested along with the age and health of the insured.


When the policy holder outlives the policy term, apart from the survival benefits he has already received during the policy term, he would receive the single premium amount that he paid at the beginning of the plan and the loyalty additions. This amount would not include the taxes.


Only after LIC’s New Bima Bachat Policy completes one year, the policy holder will be eligible for Guaranteed Surrender Value.


Yes, irrespective of the survival benefits, Sum assured as death benefit will be received. If the policy term is 12 years and the insured dies in the 7th year of the policy, it means he has already received 2 survival benefits. But at his death the nominee would receive INR 5 lakh as the Sum assured despite the benefits that have been availed already. The policy has completed a tenure of 5 years therefore, the nominee is also eligible for loyalty addictions.


Survival Benefits are a very beneficial aspect of LIC’s Bima Bachat Plan. The policy holder receives a percentage of the amount he has invested. The survival benefits are payable as follows :

  • For 9 Years Policy Term - 15% of the Basic Sum Assured at the end of 3rd and 6th year.
  • For 12 Years Policy Term - 15% of the Basic Sum Assured at the end of 3rd, 6th and 9th year.
  • For 15 Years Policy Term - 15% of the Basic Sum Assured at the end of 3rd, 6th, 9th and 12th year.

This policy offers rebate/discount for High Sum Assured.

Policy Tenure High Sum Assured Criterion % of Rebate
9 Years Less than Rs 75,000 NIL
Rs. 75,000 and Less than Rs.150,000 6%
Rs. 1,50,000 and above 8%
12Years Less than Rs 1,00,000 NIL
Rs. 1,00,000 and Less than Rs.2,00,000 4%
Rs. 2,00,000 and above 6%
15 years Less than Rs 1,50,000 NIL
Rs. 1,50,000 and Less than Rs.3,00,000 3%
Rs. 3,00,000 and above 5%