LIC Bima Diamond Plan - Remain Protected While Getting Your Money Back Too!

Let’s face the facts: We are not getting any younger day by day. We have many domestic responsibilities and not every one of us is lucky enough to have an assured source of income as we approach retirement, or, God forbid, in the unfortunate event of death.

Still, we all have the choice of not only safeguarding ourselves and our loved ones in such scenarios but preparing for a financially secure future for the duration of our lifetime. And even after that.

Life Insurance Corporation of India celebrated its sixtieth-anniversary last year. In keeping with its salient product launches and the image of the most trusted insurance company of the country, the company launched the LIC Bima Diamond Plan on September 19, 2016.

This is a non-linked plan, which means it doesn’t depend on the share market. Another feature which you would find extremely convenient is that it is a limited premium paying money back plan – You would be paying premiums for a duration which is far less than the actual policy coverage period.

This is one of the close-ended plans, with the last date for enrollment being August 31, 2017.

LIC Bima Money Back Plan - Outstanding Features

You will start getting back your money as you complete every four years of your policy period

Extended coverage after policy matures

Premium paying terms much less than policy coverage duration

Choice to opt for accidental benefit and to include term riders

Avail the benefits of section 80c of the income tax act as paid premiums are exempt

Enjoy tax-exempt maturity amount

Eligibility Criteria and Policy Terms

The minimum basic sum assured is rupees 100,000, and the maximum is rupees 500,000 under this policy.

Policy Term Minimum Entry Age Maximum Entry Age Maximum Maturity Age Extended Cover Period
16 Years 14 Years 50 Years 66 Years 8 Years
20 Years 14 Years 45 Years 65 Years 10 Years
24 Years 14 Years 41 Years 65 Years 12 Years

LIC Bima Money Back Plan - Details and Benefits

There are basically four types of benefits under this policy:

1. Death Benefit: In the unfortunate incident the policyholder dies during the first five years of the policy term the “Sum Assured on Death” would be payable.

In case of death after a period of five years but before the policy matures, besides the sum assured, an additional amount would be payable as ‘Loyalty Addition’.

In case of death during the Extended Coverage, 50% of the basic sum assured would be paid out.

2. Survival Benefit: Contingent to the policyholder being alive and all due premiums being paid, at the end of every four years of the policy period, a fixed percentage of the Basic Sum Assured would be paid out.

3. Maturity Benefit: Once the policy matures, and provided you have paid up all premiums due, you shall be paid the Sum Assured on Maturity as well as a Loyalty Addition, if applicable.

4. Loyalty Addition: LIC believes in nurturing relationships with their customers. What would be more appropriate for us than to reward those policyholders who have duly paid up all premiums completely during and on the maturity of the policy?

The company does this by enabling the policyholders to participate in profits in the form of a Loyalty Addition. This shall be applicable after the completion of five years, before/at maturity, or in the unfortunate incident of the policyholder expiring.

The rates and terms shall be determined by the LIC keeping in mind the company’s experience with the policyholder.

Policy Term Death Benefit Survival Benefit Maturity Benefit Loyalty Addition
16 Years Sum Assured 15% of Basic Sum Assured at the end of 4th, 8th and 12th policy year 55% of Basic Sum Assured Upon death & after five years
20 Years Sum Assured 15% of Basic Sum Assured at the end of 4th, 8th, 12th and 16th policy year 40% of Basic Sum Assured Upon death & after five years
24 Years Sum Assured 12% of Basic Sum Assured at the end of 4th, 8th, 12th, 16th and 20th policy year 40% of Basic Sum Assured Upon death & after five years

Note: Sum Assured on Death being the highest of 10 times of annualized premiums, or, amount assured on maturity, or absolute amount assured upon death.

Unique Features of the Policy

1. You are “Auto Covered” even if you miss paying a premium: If all premiums have been duly paid for not less than three years but less than five years, and you miss a payment, you are auto-covered for six months.

If you have paid all premiums for a full five years and miss subsequent premium(s), you are auto-covered for a period of two years.

2. You get Optional Benefits in the form of Accidental Death and Disability Benefit, and New Term Assurance Rider. However, the Rider sum won’t exceed the Basic Sum Assured.

3. You remain being covered even after the policy matures for a period half the duration of the actual policy coverage period, for half the amount of the Basic Sum Assured.

For instance, if you have bought a policy of 24 years’ duration for the amount of rupees 500,000 you would still be covered for another 12 years once the policy matures for a risk cover of rupees 250,000. And you won’t be paying any premiums!

You Pay Premiums for Far Lesser Number of Years than the Policy Period

There are three Policy Term options you get:

16 Years: Pay premiums only for the first 10 years

20 Years: Pay premiums only for the first 12 years

24 Years: Pay premiums only for the first 15 years

You also have a choice in deciding the mode of paying premiums and can choose between yearly, half-yearly, quarterly or even monthly.

Plan Premium Calculator under different Policy Terms

Following is an example of the premium rates you would be paying annually per rupees thousand of the Basic Sum Assured. This excludes service tax:

Policy Term Age: 20 Age: 30 Age: 40 Age: 50
16 87.80 88.90 92.25 99.95
20 74.15 75.70 79.70 Nil
24 60.05/td> 61.75 66.05 Nil

Let’s Understand the Plan with a Maturity Calculator Example

There can be two scenarios with this Money Back life insurance plan.

First, and as we would wish for, you as the policyholder survive the duration of the policy coverage.

Suppose you are 25 years of age when you buy this policy for a sum assured of rupees 500,000 in 2016. Below are your money back and maturity details in the table.

On Completion Of Year Your Age Your Money Back Calculation
4th Year 2020 29 60000 12% of Sum Assured
8th Year 2024 33 60000 12% of Sum Assured
12th Year 2028 37 60000 12% of Sum Assured
16th Year 2032 41 60000 12% of Sum Assured
20th Year 2036 45 60000 12% of Sum Assured
24th Year 2040 49 200000 + LA 40% of Sum Assured + Loyalty Addition at Policy Maturity

What’s even better is that as this plan comes with an extended life cover, you continue being covered under it from the age of 49 (when the policy matures) to 61 years of age. That means the extended cover would be until the year 2052, with the risk cover amount being rupees 250,000.

In the second and unfortunate scenario should you not survive the policy term of 24 years then the year/age wise death claim would be:

Year of Death Death Age Premium Paid Claim Accidental Death Claim
2016 25 30002 500000 1000000
2017 26 59462 500000 1000000
2018 27 88922 500000 1000000
2019 28 118382 500000 1000000
2020 29 147842 500000 1000000
2021 30 177302 500000 + Loyalty Addition 1000000 + Loyalty Addition
2022 31 206762 500000 + Loyalty Addition 1000000 + Loyalty Addition
2023 32 236222 500000 + Loyalty Addition 1000000 + Loyalty Addition
2024 33 265682 500000 + Loyalty Addition 1000000 + Loyalty Addition
2025 34 295142 500000 + Loyalty Addition 1000000 + Loyalty Addition

Why should you buy this Plan?

This plan assures you a regular income to provide safeguards against loss of other regular income as you grow older. For instance, you could plan your child’s higher education

You would be paying premiums for a considerably shorter duration of years than the policy coverage. For instance, you would be paying premiums only for the 12 years of the policy term of 20 years

You remain being covered by the ‘Auto Cover’ feature of this policy even if you miss paying a few premiums

You can surrender the policy anytime after three years

You are eligible for a loan on the policy after the first three years

You are eligible for a rebate on the high sum assured of 2.5% for rupees 200,000 to rupees 4,80,000, and a rebate of 3% for rupees 500,000, per rupees 1,000 of the sum assured