LIC New Bima Bachat: Features, Benefits, Eligibility, Reviews

Whether it is term insurance or savings plans, LIC has an insurance solution for every customer. Founded in the year 1956, LIC has been serving individuals for more than 60 years. During its course of operation, the company has issued various attractive insurance plans which help individuals in meeting their financial requirements. Bima Bachat is one such policy offered by LIC which helps individuals create a corpus for their financial needs.

Overview of LIC Bima Bachat Plan

LIC’s New Bima Bachat is a traditional, participating, money back insurance plan. The plan provides money back benefits at specified intervals thereby giving the policyholder liquidity to meet his financial needs. The plan requires only a single premium which is also refunded back on the maturity of the policy. This gives the policyholder not only a return of his investments but also additional money back benefits during the policy tenure.

Key features of LIC’s New Bima Bachat Plan

LIC’s Bima Bachat Policy has the following salient features –

1. The policy participates in the profits earned by LIC. It receives a loyalty addition after the completion of the first five policy years when the policy matures or in case of death
2. 15% of the sum assured is paid as money back benefits at specified intervals
3. If a high level of sum assured is selected, premium rebates are also allowed
4. After the completion of the first policy year, you can avail policy loans for meeting your financial needs.

Benefits paid under LIC’s New Bima Bachat Policy

Here are the benefits which accrue under LIC Bima Bachat plan

1. Survival benefits
   Since this policy is a money-back policy, it pays regular survival benefits during the term of the plan. The survival benefits paid to depend on the tenure that you have selected. Here’s the distribution of survival benefits for different plan durations –

Plan duration	Payment of survival benefits
9 years	15% of the sum assured at the end of the 3rd policy year and 6th policy year
12 years	15% of the sum assured at the end of the 3rd policy year, 6th policy year and 9th policy year
15 years	15% of the sum assured at the end of the 3rd policy year, 6th policy year, 9th policy year and 12th policy year

2. Maturity benefit
   When the term comes to an end, the single premium paid is refunded back with loyalty addition, if any.
3. Death benefit
   If the insured dies during the term of LIC Bima Bachat policy, the death benefit would be as follows –

Time of death	Death benefit payable
Within the first five years of the policy	Sum assured
After the first five years of the policy	The sum assured + loyalty addition (if any)

The death benefit would not be reduced by the survival benefits already paid. The full sum assured would be paid irrespective of the money-back benefits that you have already received under the policy.

4. Premium discounts
   If you choose a high level of sum assured, you can get a discount on the premium rate. The discount allowed depends on the term that you choose and the coverage level. Here are the discounts that you can avail –

• If the term is 9 years

Sum assured level	Available premium discount
INR 75,000 to INR 149,999	6% of the tabular premium
INR 150,000 onwards	8% of the tabular premium

• If the term is 12 years

Sum assured level	Available premium discount
INR 100,000 to INR 199,999	4% of the tabular premium
INR 200,000 onwards	6% of the tabular premium

• If the term is 15 years

Sum assured level	Available premium discount
INR 150,000 to INR 299,999	3% of the tabular premium
INR 300,000 onwards	5% of the tabular premium

5. Surrender value
   If you do not want to continue the policy for the selected tenure, you can surrender the plan and avail a surrender value. The surrender value would depend on the time when the policy is surrendered. It would be calculated as follows –

The time when the policy is surrendered	Surrender value
In the first policy year	70% of the single premium paid
After the completion of the first policy year	90% of the single premium paid

6. Policy loan
   You can avail a loan under the policy if you need funds for your financial needs. Loans are allowed after the completion of the first policy year. The maximum loan that you can avail is 60% of the surrender value of the policy.

Eligibility conditions of LIC’s New Bima Bachat Plan

Entry age	Minimum – 15 years Maximum: If the term is 9 years – 66 years If the term is 12 years – 63 years If the term is 15 years – 60 years
Maturity age	Maximum – 75 years
Term of the plan	9 years, 12 years or 15 years
Sum assured	Minimum: If the term is 9 years – INR 35,000 If the term is 12 years – INR 50,000 If the term is 15 years – INR 70,000 Maximum – no limit
Premium amount	Depends on the sum assured, age and term
Premium payment mode	Single premium

Sample premium rates of LIC’s New Bima Bachat Plan

The premiums payable for different policy tenures and at different ages are given in the chart below. The assumptions made for calculations are as follows –

• The insured is a non-smoking male life
• The sum assured is INR 5 lakhs

Age of the insured	Term 9 years	Term 12 years	Term 15 years
25 years	INR 353,717	INR 362,840	INR 367,033
35 years	INR 354,982	INR 364,415	INR 368,980
45 years	INR 360,019	INR 369,961	INR 374,894
55 years	INR 369,748	INR 379,807	INR 385,083

Who should buy LIC’s New Bima Bachat Plan?

LIC Bima Bachat policy is suitable for individuals who are looking to create a guaranteed corpus for their financial needs. The plan suits the needs of risk-averse individuals if they want to create a corpus and also need liquidity. Since the plan offers guaranteed returns, it can be taken for its risk-free returns. Also, the survival benefits payable from the 3rd policy year itself creates a source of regular income for those who need liquidity for different financial needs.

Tax implications of LIC’s New Bima Bachat Policy

Being a life insurance policy, LIC Bima Bachat enjoys tax benefits. You can get tax benefits on the premiums that you pay for the policy and also on the benefits received. Here’s the tax implication of LIC’s New Bima Bachat plan –

1. Tax implication on premiums paid

The single premium that you pay to buy the plan would be allowed as a deduction from your taxable income under Section 80C of the Income Tax Act. You can claim a deduction of up to INR 1.5 lakhs through this Section.

2. Tax implication on benefits received

The survival benefits that you get during the term of the plan, the death benefit as well as the maturity benefit are all tax-free in your hands under Section 10(10D) of the Income Tax Act, 1961. There is no limit on the tax-free benefit. Whatever benefit that you receive would be fully exempted from tax liability.

Exclusions of LIC’s New Bima Bachat Plan

If the insured dies due to suicide within 12 months of buying LIC Bima Bachat plan, such a death would be considered as exclusion. In that case, 90% of the single premium paid would be refunded and the policy would be terminated.

How to apply for LIC’s New Bima Bachat Policy?

You can buy LIC Bima Bachat plan online or offline. Offline policies are sold by LIC agents and the branches of LIC. You can approach either one to buy the policy.

You need to either buy the policy online through the official website of LIC or through an agent of LIC of India. The online mode is simpler and much more convenient. 

Documents required for applying for LIC’s New Bima Bachat Plan

To buy LIC Bima Bachat policy, the following documents should be submitted –

• A valid identity proof
• A valid age proof
• A valid address proof
• Income proof if the premiums are high
• Recent coloured photographs
• Bank account details
• Any other documents required by the insurance company

Claim process of LIC’s New Bima Bachat Plan

Here’s how different claims should be made under LIC Bima Bachat policy –

1. Survival benefits claim

To receive the money-back benefits, you should submit a claim discharge form along with a copy of your policy bond. Your bank account details would also be required so that the survival benefits are credited directly to your bank account.

2. Maturity claims

When the plan matures, submit the claim discharge form and the policy document to claim the maturity benefit. You would also have to submit an identity proof and bank details so that the benefit is credited directly to the bank account.

3. Death claims

If the insured dies during the policy tenure, the nominee should fill up Part A of Claim form 3783. The form is easily available online on LIC’s website. You can, alternatively, avail the form from LIC’s branch office or agent too. The form should be filled and submitted to the insurance company along with the identity proof of the nominee, death certificate of the insured and the bank details wherein the claim is to be received. Once all the documents are in order, LIC would process and settle the claims.

You can also make your LIC Bima Bachat claim through Turtlemint. Turtlemint allows its customers the facility of easy claim settlements through its help. You just have to inform Turtlemint at 1800 266 0101 or through an email at claims@turtlemint.com and the company’s claim team would take the steps of the claim process so that your life insurance claim is settled without any fuss.

Comparison of life insurance plans

LIC Bima Bachat Plan Is a money-back insurance plan wherein regular benefits are paid during the duration of the plan. This plan is different from an endowment plan which pays a lump sum benefit on maturity or death given the money back benefits which are not available under endowment plans. Similarly, LIC’s New Bima Bachat is completely different from term insurance plans. Term plans usually pay only a death benefit but under Bima Bachat a maturity benefit is also promised.

When compared to unit-linked plans, LIC Bima Bachat Plan is different because it offers guaranteed returns which are not promised under ULIPs. Thus, LIC’s New Bima Bachat Plan is a traditional money back plan which is different from other types of life insurance plans available in the market.