LIC launches Bima Ratna plan. Check key features

New Delhi: India’s largest insurance company, Life Insurance Corporation of India on Friday unveiled launched a savings life insurance plan called Bima Ratna. The non-linked, non-participating, individual scheme offers a range of protection and savings.

Bima Ratna plan is aimed at providing financial support to the family in case of the unfortunate death of the policyholder during the policy term. Also, it offers payouts on a periodic basis for the survival of the policyholder at specified durations to meet the various financial needs.

The scheme can be bought through Corporate Agents, Insurance Marketing Firms (IMF), Brokers, CPSC-SPV, and POSP-LI engaged by these intermediaries viz. Corporate Agents, Insurance Marketing Firms (IMF), and Brokers.

Check out the key features of the plan:

LIC offers death benefit payments on death of the life assured during the policy term after the date of commencement of risk along with accrued guaranteed additions. The money assured on death is over 125 per cent of the Basic Sum Assured or seven times the annualised premium, as per the insurer.

This death benefit payment will not be less than 105 per cent of total premiums paid (excluding any extra premium, any rider premium (s), and taxes) up to the date of death. In case of death of a minor aged less than 8 years, the sum payable shall be a refund of premium(s) paid (excluding taxes, any extra premium, and rider premium(s), if any), without interest.

If the duration of the scheme is 15 years, the insurer will give 25 per cent of the basic sum assured at the end of each 13th and 14th policy year. In case of 20 years term plan, LIC will pay 25 per cent of the basic sum assured at the end of each of the 18th and 19th policy years. If the policy is for 25 years, LIC will pay the same at the end of each 23rd and 24th policy year.

In its Bima Ratna brochure, LIC underlined that on Life Assured surviving the stipulated Date of Maturity provided the policy is in force, “Sum Assured on Maturity" along with accrued Guaranteed Additions, shall be payable. Where “Sum Assured on Maturity" is equal to 50 per cent of Basic Sum Assured.

4. Guaranteed Additions

These include payout of Rs 50 per Rs 1000 basic sum assured from the 1st to 5th year. From the 6th to the 10th policy year, LIC will pay Rs 55 per Rs 1000 basic sum assured, and the guaranteed addition will increase to Rs 60 from the 11th to 25th policy year per Rs 1000 basic sum assured.

It may be noted that in case of death of a policyholder under an in-force policy, the guaranteed addition in the year of death shall be for the full policy year. In case of a paid-up policy or on surrender of a policy, the guaranteed addition for the policy year in which the last premium is received will be added on a proportionate basis in proportion to the premium received for that year, LIC said.

Eligibility and other restrictions

The insurance behemoth gives a minimum basic sum assured to the tune of Rs 5 lakh. While no limit is set on the maximum basic sum assured, it will be in multiples of Rs 25,000. The policy term varies from 15 years, 20 years, and 25 years.

Under the new Bima Ratna scheme, the premium paying term is 11 years for a policy term of 15 years. While it is 16 years and 21 years for policy terms 20 years and 25 years.

The minimum age is 5 years of completion for a policy term of 15 years. While 90 days of completion for policy terms for 20 and 25 years. The maximum age is 55 years for policy terms 15 years, while the age is 50 years and 45 years old for policy terms 20 years and 25 years.

Further, the policy can opted at 65 years of age minus the policy term in case they are procured from POSP-LI/CPSC-SPV.

The minimum age for the maturity of the policy is 20 years for policy terms 15 years and 20 years. While the maturity age is 25 years for policy term of 25 years. The maximum age for maturity is 70 years.

If a policyholder enters at under the age of 8 years, the risk under this plan will commence either 2 years from the date of commencement or the policy anniversary coinciding with or immediately following the attainment of 8 years of age, whichever is earlier. For those aged 8 years or more, risk will commence immediately.

Settlement Options

It is an option to get Maturity Benefit in installments over 5 years instead of a lump sum amount under an in-force as well as Paid-up policy. The amount opted for this option can be either in absolute value or as a percentage of the total claim proceeds payable.

The installments are monthly, quarterly, half-yearly, and yearly with the minimum monthly installment being Rs 5,000, quarterly Rs 15,000, half-yearly Rs 25,000, and yearly Rs 50,000.

Premiums

Premiums can be paid regularly at yearly, half-yearly, quarterly, or monthly intervals (monthly premiums through NACH only) or through salary deductions.

A grace period of 30 days will be given to the policyholder for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums from the date of the First Unpaid Premium. The policy will lapse if the premium is not paid before the expiry of the days of grace.

Revival

If the premiums are not paid within the grace period, then the policy will lapse. A lapsed policy can be revived, but within 5 consecutive years from the date of First Unpaid Premium but before the date of maturity.