10 key features you must know before buying LIC's new life insurance plan.
LIC's Bima Ratna plan offers financial support for the family in case of the unfortunate death of the policyholder during the policy term and also provides for periodical payments for the survival of the policyholder at specified durations to meet the various financial needs.
Here are the key features of the new plan:
1. Death Benefit:
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.
LIC defines the sum assured on death as the higher than 125% of the Basic Sum Assured or 7 times of annualized premium. This death benefit payment will not be less than 105% of total premiums paid (excluding any extra premium, any rider premium (s), and taxes) up to the date of death.
However, in the case of a minor whose age is below 8 years, on death before the commencement of risk, the benefit payable shall be a refund of premium(s) paid (excluding taxes, any extra premium, and rider premium(s), if any), without interest.
2. Survival Benefit:
In its survival benefits - LIC will pay 25% of the basic sum assured at the end of each 13th and 14th policy year if the term of the plan is 15 years. For 20 years term plan, LIC will pay 25% of the basic sum assured at the end of each of the 18th and 19th policy years. If the policy plan is for 25 years, then LIC will pay the same 25% at the end of each 23rd and 24th policy year.
3. Maturity Benefit:
Under its brochure of Bima Ratna, LIC explains 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% of Basic Sum Assured.
4. Guaranteed Additions:
From the 1st to 5th year, LIC will pay guaranteed additions of ₹50 per ₹1000 basic sum assured. While from the 6th to the 10th policy year, LIC will pay ₹55 per ₹1000 basic sum assured, and the guaranteed addition will become ₹60 from the 11th to 25th policy year per ₹1000 basic sum assured.
Notably, in case of death under an in-force policy, the Guaranteed Addition in the year of death shall be for the full policy year.
However, if the premiums are not duly paid, the Guaranteed Additions shall cease to accrue under a policy.
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.
5. Eligibility Conditions and Other Restrictions:
LIC offers a minimum basic sum assured to the tune of ₹5 lakh. There is no limit on the maximum basic sum assured, however, it will be in multiples of ₹25,000.
The policy term varies from 15 years, 20 years, and 25 years. However, the policy term will be 15 and 20 years if the policy is procured through POSP-LI/CPSC- SPV.
Under the Bima Ratna, 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 25 years.
The maximum age for maturity is 70 years.
6. Date of commencement of risk:
In case, the age at entry of the Life Assured is less than 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.
7. Settlement Options:
Settlement Option is an option to receive Maturity Benefit in installments over 5 years instead of a lump sum amount under an in-force as well as Paid-up policy. This option can be exercised by the Policyholder during the minority of the Life Assured or by the Life Assured aged 18 years and above, for full or part of the maturity proceeds payable under the policy.
The amount opted for this option by the policyholder/ Life Assured (i.e. Net Claim Amount) can be either in absolute value or as a percentage of the total claim proceeds payable.
There are monthly, quarterly, half-yearly, and yearly installments under the policy.
The minimum monthly installment is ₹5,000, while quarterly it is ₹15,000, half-yearly ₹25,000, and yearly ₹50,000.
If the net claim amount is less than the required amount to provide the minimum installment amount as per the option exercised by the Policyholder/Life Assured, the claim proceeds shall be paid in lump sum only.
8. Premiums Payment:
Premiums can be paid regularly at yearly, half-yearly, quarterly, or monthly intervals (monthly premiums through NACH only) or through salary deductions.
9. Grace Period:
A grace period of 30 days shall be allowed for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums from the date of the First Unpaid Premium. During this period, the policy shall be considered in force with the risk cover without any interruption as per the terms of the policy. If the premium is not paid before the expiry of the days of grace, the Policy lapses.
The above grace period will also apply to rider premiums which are payable along with the premium for Base Policy.
10. 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.
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