LIC Bima Ratna (Plan 864) – Features, Eligibility and Hidden Factors


LIC has launched a brand new life insurance coverage financial savings plan, LIC Bima Ratna. This plan is aimed to supply periodic funds throughout the survival interval past life insurance coverage protection. Typically LIC retains launching new insurance policies throughout yr finish to, entice traders who’re searching for tax financial savings. They not often launch a plan throughout the starting of the monetary yr. LIC has brazenly indicated that this product is designed to promote by way of banking companions. What are the Key Options of LIC Bima Ratna Plan? What’s the eligibility to take this Bima Ratna Plan? Do you have to decide LIC’s Bima Ratna Plan 864?

Additionally Learn: Greatest Time period Insurance coverage Plans in 2022 in India

What’s the date of graduation of danger?

Because the dying profit is paid based mostly on graduation of danger, it is necessary for us to grasp them first.

> 8 years of age – Date of graduation of danger could be instant.

< 8 years of age – Date of graduation of danger could be 2 years after taking the coverage or after attaining 8 years of age whichever is earlier

Key Options of LIC Bima Ratna Plan No 864

It’s non-linked, non-participating, particular person, financial savings and life insurance coverage plan. Listed below are the important thing options of the plan:

#1 – Demise Profit

In case of unlucky dying of the life insured, relations or nominee would get the sum insured which might be increased of the next:

125% of primary sum assured

7 occasions of annualized premium

105% of the overall premiums paid excluding any rider premium paid

In case of minor aged under 8 years, on dying earlier than graduation of the danger, the one premium quantity could be refunded as dying profit.

#2 – Assured Additions

LIC affords assured additions on this plan which is payable as follows:

1st to fiveth yr of the coverage – Rs 50 per each 1,000 thousand sum assured (5%)

6th to 10th yr of the coverage – Rs 55 per each 1,000 thousand sum assured (5.5%)

11th to 25th yr of the coverage – Rs 60 per each 1,000 thousand sum assured (6%)

In case of dying of the life insured, assured additions could be paid for a full yr in that yr.

#3 – Maturity Advantages

In case of survival of life insured, maturity profit could be paid which is the same as “Sum Assured on Maturity” together with Assured Additions. Sum Assured on Maturity could be equal to 50% of Fundamental Sum Assured.

#4 – Survival Advantages

LIC Bima Ratna Survival Advantages could be paid as follows:

15 Yr Plan – 25% of the sum assured could be paid on the finish of every 13th and 14th yr

20 Yr Plan – 25% of the sum assured could be paid on the finish of every 18th and 19th yr

25 Yr Plan – 25% of the sum assured could be paid on the finish of every 23rd and 24th yr

#5 – Eligibility to take this Plan

Minimal age of entry is 5 years for a 15 yr coverage and 90 days for 20 and 25 yr coverage.

Most age of entry is 55 years for a 15 yr coverage and 50 years for 20 and 25 yr tenure coverage.

Most age of maturity is 70 years.

Whereas the minimal primary sum assured is Rs 5 Lakhs, there is no such thing as a most primary sum assured restrict. Nevertheless, it ought to be in multiples of Rs 25,000.

Coverage time period could be 15 years, 20 years and 25 years.

#6 – Settlement Possibility in LIC Bima Ratna

LIC affords one other distinctive function which is a settlement choice on this coverage.  Below this settlement choice, the maturity profit could be paid in installments over 5 years as an alternative of a lump sum underneath in pressure and paid-up coverage. The quantity might be both absolute worth or % of the overall declare proceeds payable. Curiosity payable could be 2% decrease than the 5 years G-Sec yield.

#7 – Premium cost choices

Premium paying time period could be 11 years for 15 yr coverage time period, 16 years for 21 yr coverage time period and 20 years for the 25 yr coverage time period.  Means one have to pay 4 years decrease than the coverage time period.

Premiums might be paid both month-to-month, quarterly, half yearly or yearly or by way of month-to-month wage deductions.

#8 – Rebates on premium

This plan affords under rebates on premium:

Mode Rebate
Mode Rebate
Yearly 2% of tabular premium
Half Yearly 1% of tabular premium
Quarterly/Month-to-month Nil
Excessive Sum Assured Rebate
Fundamental Sum Assured (BSA) Rebate – Rs 1,000 BSA
5 Lakhs to 9.75 Lakhs Nil
10 Lakhs to 14.75 Lakhs 0.50
15 Lakhs to 19.75 Lakhs 1.00
20 Lakhs and above 1.25

LIC Bima Ratna Pattern Premiums

Listed below are the pattern premiums (yearly) for Rs 20 Lakhs Fundamental Sum Assured.

Coverage Time period in Years (Premium Paying Time period)
Age 15 (11) 20 (16) 25 (21)
20 2,16,040 1,51,066 1,14,218
30 2,16,824 1,52,340 1,16,178
40 2,20,744 1,57,534 1,22,940
50 2,32,602 1,71,548

LIC Bima Ratna defined with an instance

Let me clarify this an instance. Mr. Rajesh, 30 years of age have taken 25 yr plan with annual premium of Rs 1.16 Lakhs.

He have to pay a yearly premium for 21 years for 25 years tenure.

Assured additions could be 5% for 1 to five years, 5.5% for six to 10 years and 6% for 11 to 25 years.

Survival profit could be 25% of primary sum assured could be paid on 23rd yr and 24th yr.

Maturity Profit could be 50% of primary sum assured could be paid  on maturity of 25 years.

The approximate XIRR is 4.8% on this case. Right here is the computation.

LIC Bima Ratna - Example

Optimistic Components in LIC Bima Ratna

Listed below are the foremost constructive elements on this plan.

That is easy life insurance coverage financial savings plan which is straightforward to grasp.

That is one of the best life insurance coverage financial savings plan for people who’re low danger traders and searching for secure funding choices.

Survival profit helps to get periodical funds for annually in final 2 years of the coverage time period.

Assured Additions of 5% / 5.5% and 6% could be paid for five years, 10 years and 15 years respectively.

Settlement choice would assist to obtain the maturity quantity in installments for five years both by absolute worth or proportion of whole claims payable.

Non-compulsory riders obtainable, i.e. LIC Accident Profit Rider and Unintended Demise and Incapacity Rider Profit, Important sickness profit rider and Premium Waiver Profit Rider.

Detrimental of Hidden Components in Bima Ratna plan of LIC

Listed below are main destructive elements on this coverage:

This coverage is obtainable solely offline by way of financial institution companions, LIC brokers and brokers. You can’t buy on-line.

In case of dying of minor aged < 8 years solely premiums could be refunded and no further dying profit could be paid.

In case premiums usually are not paid, assured additions would stop to accrue underneath this plan.

In case life insured commits suicide inside 12 months, the nominee or relations would get 80% of premiums paid. There wouldn’t be any additional dying profit past this.

Life insurance coverage financial savings plans present low returns between 4.5% to five.5%.

Additionally Learn: High Well being Insurance coverage Plans in 2022

Do you have to decide LIC Bima Ratna Plan 864?

LIC has brazenly indicated on first web page of the gross sales brochure that this product is solely launched by way of its banking companions and company brokers.

LIC’s new Bima Ratna coverage is sort of a common LIC plan with none thrilling options. Such plans supply very low returns of 4.5% to five% returns (relying on the coverage tenure and age of life insured).

One can go for a easy time period insurance coverage plan and make investments steadiness surplus in a easy FD or a mutual fund scheme that may fetch excessive returns.

Supply knowledge: Bima Ratna LIC Coverage Brochure

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Suresh KP
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