New Delhi: LIC, India’s largest insurer, announced on Friday the launch of Bima Ratna, a non-linked, non-participating, individual savings life insurance plan that combines protection and savings. The new product was introduced to meet the needs of the home market.
Corporate Agents, Insurance Marketing Firms (IMF), Brokers, CPSC-SPV, and POSP-LI, as well as other intermediaries such as Corporate Agents, Insurance Marketing Firms (IMF), and Brokers, can acquire the product.
The LIC’s Bima Ratna plan provides financial support to the policyholder’s family in the event of the policyholder’s untimely death during the policy term, as well as periodic payments for the policyholder’s survival at set intervals to fulfill various financial demands.
In addition, the proposal includes a borrowing facility to meet liquidity requirements.
Here are the key features of the new plan:
1. Death Benefit:
On the death of life assured during the policy term after the date of risk initiation, LIC pays a death benefit plus accrued guaranteed additions.
The sum assured on death, according to LIC, is greater than 125 percent of the Basic Sum Assured or seven times the annualized premium. This death benefit payment will not be less than 105 percent of the premiums paid up to the date of death (excluding any extra premiums, rider premiums, and taxes).
However, if a minor under the age of 8 years dies before the risk begins, the benefit provided is a refund of premiums paid (minus taxes, any extra premium, and any rider premiums, if applicable), plus interest.
2. Survival Benefit:
If the plan’s term is 15 years, LIC will pay 25% of the basic sum assured at the end of each 13th and 14th policy year. LIC will pay 25% of the base sum assured at the end of each of the 18th and 19th policy years for a 20-year term plan. If the policy is for a period of 25 years, LIC will pay the same 25% at the end of each of the 23rd and 24th policy years.
3. Maturity Benefit:
LIC notes in its Bima Ratna brochure that “Sum Assured on Maturity” is based on Life Assured surviving the set Date of Maturity provided the policy is in place “will be payable, together with any accrued Guaranteed Additions.” Sum Assured on Maturity “is a placeholder for “Sum Assured on Maturity.” “is the same as 50% of the Basic Sum Assured.
4. Guaranteed Additions:
LIC will pay guaranteed additions of Rs 50 per Rs 1000 basic payment promised from the first to the fifth year. From the 6th to the 10th policy year, LIC will pay Rs 55 every Rs 1000 basic sum promised, and from the 11th to the 25th policy year, the guaranteed increase will be Rs 60 for Rs 1000 basic sum assured.
Notably, the Guaranteed Addition in the year of death under an in-force policy will be for the entire policy year.
However, if premiums are not paid on time, the Guaranteed Additions under an insurance will stop accruing.
The Guaranteed Addition for the policy year in which the last premium is received will be added proportionately in proportion to the premium received for that year in case of a paid-up policy or on surrender of a policy, according to LIC.
5. Eligibility Conditions and Other Restrictions:
The LIC provides a minimum basic sum assured of Rs 5 lakh. The maximum basic sum assured has no restriction, although it must be in multiples of Rs 25,000.
15 years, 20 years, and 25 years are the policy terms. If the policy is purchased through POSP-LI / CPSC- SPV, the policy duration will be 15 or 20 years.
The Bima Ratna has an 11-year premium-paying period for a 15-year policy term. For policy periods of 20 years and 25 years, it is 16 years and 21 years.
For a 15-year policy term, the minimum age is 5 years of completion. While policy terms of 20 and 25 years require 90 days to complete.
For policy periods of 15 years, the maximum age is 55, whereas for policy terms of 20 years and 25 years, the maximum age is 50 and 45.
In addition, if the policy is purchased through POSP-LI / CPSC-SPV, the policy can be purchased at 65 years of age minus the policy term.
For insurance terms of 15 and 20 years, the minimum age for policy maturity is 20 years. For a policy term of 25 years, the maturity age is 25 years.
Maturity is defined as reaching 70 years of age.
6. Date of commencement of risk:
If the Life Assured’s age at entry is less than 8, the risk under this plan will begin 2 years from the date of beginning or the policy anniversary that coincides with or immediately follows the achievement of 8 years of age, whichever comes first. Risk will begin immediately for individuals who are 8 years old or older.
7. Settlement Options:
Under an in-force or Paid-up policy, the Settlement Option allows you to receive Maturity Benefit in 5-year increments rather than a lump sum payment. This option can be used by the Policyholder while the Assured Life is still a minor, or by the Assured Life who is 18 years or older, for all or part of the maturity funds payable under the policy.
The amount chosen by the policyholder / Life Assured for this option (ie Net Claim Amount) can be expressed in either absolute value or as a percentage of the total claim payments disbursed.
The policy has monthly, quarterly, half-yearly, and annual installments.
The minimum monthly installment is Rs 5,000, with quarterly installments of Rs 15,000, half-yearly installments of Rs 25,000, and annual installments of Rs 50,000.