LIC Bima Ratna Plan is a non-participating life insurance policy with savings features.
LIC Bima Ratna Plan is a life insurance policy offered by the Life Insurance Corporation of India (LIC) to provide individuals with savings and financial security. This non-participating and non-linked individual life insurance plan is available through the corporate agents, brokers, Insurance Marketing Firms (IMF), and Common Service Centers (CSC) of LIC.
The policy offers several features that are designed to meet the needs of policyholders. These include flexible premium payments, which can be made monthly, quarterly, half-yearly, or annually. A grace period of 30 days is provided for yearly, half-yearly, or quarterly premiums, while a grace period of 15 days is provided for monthly premiums.
Policyholders can also avail themselves of a rebate on their premiums, with a 2% rebate for yearly payments and a 1% rebate for half-yearly payments. Additionally, a high sum assured rebate is provided on the tabular premium per Rs. 1000 of the Basic Sum Assured.
If a policy lapses, it can be revived within five years of the first premium payment. If less than two full years’ premium have been paid, the policy will cease after the expiry of the grace period. If at least two years’ premium has been paid, the policy will be considered wholly void but will subsist as a paid-up policy till the end of the policy term.
After paying two full years’ premium, the policyholder can surrender the policy, and the surrender value will be equal to the higher of the Special Surrender Value or Guaranteed Surrender Value.
In addition, a policy loan can be availed after paying at least two years’ premium, with up to 90% of the surrender value granted for in-force policies and up to 80% of the surrender value granted for paid-up policies.
The LIC Bima Ratna Plan also provides a number of advantages, such as a death benefit that provides financial assistance to the policyholder's family in the case of the policyholder's passing while the policy is still in effect. The death benefit payable will be the sum assured on death, along with guaranteed additions that will be seven times the annualized premium or higher than 125% of the Basic Sum Assured.
Survival benefits are also provided, with a fixed Basic Sum Assured paid to the policyholder surviving for the respective policy duration. The maturity benefit is the Sum Assured on Maturity, which is equal to 50% of the Basic Sum Assured, along with accrued Guaranteed Additions that will be paid on the date of maturity to the surviving life assured.
The eligibility criteria for the LIC Bima Ratna Plan include a minimum Basic Sum Assured of Rs. 5 lakh and no maximum limit. The policy term can be 15 years, 20 years, or 25 years, with a premium paying term of 11 years for 15-year policy terms, 16 years for 20-year policy terms, and a policy term for 25 years for the entire duration of the policy.
Suppose a policyholder invests Rs. 50,000 annually for a policy term of 20 years under the LIC Bima Ratna Plan with a Basic Sum Assured of Rs. 10 lakh. In this case, the guaranteed addition per Rs. 1000 Basic Sum Assured would be Rs. 55 from the sixth to the tenth policy year. Therefore, the guaranteed addition for a Basic Sum Assured of Rs. 10 lakh would be Rs. 55,000 after the tenth policy year. The maturity benefit for this policy would be Rs. 5 lakh (50% of the Basic Sum Assured) plus Rs. 55,000 (accrued Guaranteed Additions) for a total of Rs. 5,55,000. In case of the policyholder's death during the term of the policy, his or her family would receive a death benefit of Rs. 12.5 lakh (125% of the Basic Sum Assured) along with the Basic Sum Assured of Rs. 10 lakh and accrued Guaranteed Additions of Rs. 55,000 which comes down to a total amount of Rs. 23,05,000.
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