LIC Insurance Plan Bima Account 1
Features
As the name explains about this LIC Insurance Plan “Bima Account – I ” is a simple non-linked plan under which you can be covered without undergoing any medical examination subject to certain conditions.
This plan offers you everything you think of an insurance plan should provide:
- Simplicity
- Liquidity
- Guaranteed minimum return
- No medical examination
- Transparent charges
- Risk cover
Under this plan, the premiums paid by you, after deduction of charges, will be credited to the Policyholder’s Account maintained separately for each policyholder. The risk cover will be provided by deduction of mortality charges from the Policyholder’s Account.
If all due premiums are paid, the amount held in your Policyholder’s Account will earn an annual interest rate of 6% p.a. which will be guaranteed for whole of the policy term. In addition to this guaranteed return, if all due premiums are paid, your account may earn an additional return depending upon the experience under this plan.
You will also have an option to pay additional (Top-up) premiums without any increase in risk cover.
Loan facility will also be available immediately after first policy anniversary.
PAYMENT OF PREMIUMS : You may pay premiums regularly at yearly, half-yearly, quarterly or monthly (through ECS mode only) intervals over the term of the policy.
Policyholder’s Account shall consist of 2 parts :
- Policyholder’s Regular Premium Account – to which regular premiums, net of charges, shall be credited.
- Policyholder’s Top-up Premium Account – to which Top-up premiums, net of charges, shall be credited.
ELIGIBILITY CONDITIONS AND OTHER RESTRICTIONS :
(in years)
- Minimum Entry Age : 11 (completed)
- Maximum Entry Age : 50 (nearest birthday)
- Policy Term : 5 to 7
- Minimum Maturity Age : 18 (completed)
- Maximum Maturity Age : 57 (nearest birthday)
- Minimum Premium:
Regular premium:
Mode Instalment premium
Yearly ` 7,000
Half-yearly ` 4,000
Quarterly ` 2,000
Monthly (ECS) ` 600
Top-up premium: ` 1000
- Maximum Premium:
Regular premium:
Mode Instalment premium
Yearly ` 14,000
Half-yearly ` 7,000
Quarterly ` 3,500
Monthly (ECS) ` 1100
Top-up premium: Sum total of Regular Premiums paid upto the date of payment
of top-up.
Annualized Premiums shall be payable in multiple of `1000 for all modes other than ECS monthly. For monthly (ECS), the premium shall be in multiples of `100/-.
- Minimum Sum Assured: 10 times the annualized premium.
- Maximum Sum Assured:
20 times of the annualized premium up to age 35 years
14 times of the annualized premium for age between 36 to 45years
10 times of the annualized premium for age between 46 to 50 years
The maximum Sum Assured shall be subject to maximum non-medical limit applicable for the life to be assured.
CHARGES UNDER THE PLAN:
A) Expense Charge: This is the percentage of the premium appropriated towards charges from the premium received. The balance part of the premium will be credited to the Policyholder’s Regular Premium Account or Policyholder’s Top-up Premium Account, as the case may be.
The expenses charges are as below:
Regular premium:
| Expenses charge (including commission) | ||
|
First Year |
2nd & 3rd Years |
Thereafter |
|
27.5% |
7.5% |
5% |
Expense charge for top-up Premium: 2.5%
B) Other Charges:
- Mortality Charge – This is the cost of life insurance cover which is age specific and will be taken every month from the Policyholder’s Regular Premium Account appropriately. This charge shall depend upon the Sum Assured.
The charges per `1000/- life insurance cover for some of the ages in respect of a healthy life are as under:
| Age | 20 | 30 | 40 | 50 |
| Rs. | 1.25 | 1.46 | 2.57 | 6.56 |
- Service Tax Charge – A service tax charge, if any, shall be levied on Mortality charge deducted from the Policyholder’s Regular Premium Account on a monthly basis as and when the corresponding Mortality charges are deducted.
The level of this charge will be as per the rate of service tax as applicable from time to time. Currently, the rate of Service Tax is 10% with an educational cess at the rate of 3% thereon and hence effective rate is 10.30%.
- Alteration Charge – This is a charge levied for an alteration within the contract, such as change in mode of payment to higher frequency and decrease in sum assured and shall be a flat amount of `50/- which will be deducted from the Policyholder’s Account and the deduction shall be made on the date of alteration in the policy.
- OTHER FEATURES:
- Top-up Premium: You can pay top-up premiums in multiple of `1000/-. The additional premiums paid shall be credited into the Policyholder’s Top-up Premium Account after deducting the expense charge. However, there would not be any increase in the sum assured under the policy. The total of top-up premium at any point of time shall not exceed the sum total of regular premiums paid upto that point of time. Such additional premiums can be paid only if all due premiums have been paid under the policy.
- Decrease in benefits: This plan offers you the flexibility of reducing the sum assured during the term of the contract subject to the minimum limit. When the sum assured is reduced, such change will be effective from the policy anniversary coinciding with or next following the date of request.
- GRACE PERIOD:
A grace period of one-month but not less than 30 days will be allowed for payment of premiums under all modes of premium payment.
- REVIVAL:
If due premium is not paid within the days of grace, the policy becomes paid-up. A paid-up policy can be revived within 12 months period from the due date of first unpaid premium or before maturity, whichever is earlier. During this revival period, the life cover will cease and no mortality charge shall be deducted.
The revival shall be made on submission of proof of continued insurability to the satisfaction of the Corporation and the payment of all the arrears of premium without interest.
The Corporation reserves the right to accept the revival at its own terms or decline the revival of a paid-up policy. The revival of a paid-up policy shall take effect only after the same is approved by the Corporation and is specifically communicated in writing to the Policyholder.
In case the policy becomes paid-up without payment of at least 2 years’ premium and is not revived during the period of revival, the policy shall compulsorily be terminated on expiry of revival period. No charges shall be deducted and no interest will be credited from the date of compulsory termination. The balance in the Policyholder’s Account shall be refunded on completion third policy anniversary.
In case the policy become paid-up after payment of 2 full years’ premium and is not revived during the period of revival, the policy shall continue.
A policy once surrendered cannot be reinstated.
COOLING OFF PERIOD:
If you are not satisfied with the “Terms and Conditions” of the policy, you may return the policy to us within 15 days.
Benefits:
Maturity Benefit:
On the Life Assured surviving the maturity date of the contract, balance in the Policyholder’s Account shall be payable.
Death Benefit:
In case of unfortunate death of the Life Assured during the policy term, when the cover is in full force, Sum Assured along with the balance in Policyholder’s Account shall be payable.
Guaranteed Interest:
Guaranteed interest rate shall be applicable on Policyholder’s Account and not on the gross premium paid by the Policyholder.
The Policyholder’s Account i.e both Policyholder’s Regular Premium Account and Policyholder’s Top-up Premium Account will earn an annual interest of 6% p.a. provided the policy is inforce and 5% p.a. if the policy is paid-up. The interest rates will be guaranteed for the whole of the policy term.
During the revival period Policyholder’s Account will earn guaranteed interest rate of 5% p.a. On revival of policy, the guaranteed rate of interest on Policyholder’s Account will again be 6% p.a. from the date of revival.
The interest amount will be calculated on day to day basis on balance in the Policyholder’s Account after deduction of all due charges and shall be credited to the Policyholder’s Account at the end of each calendar month.
Additional Interest:
The Corporation may also declare an additional interest rate on Policyholder’s Regular Premium Account for inforce policies based on the experience
- SURRENDER:
The policy will acquire Surrender benefit immediately on payment of the first instalment premium. The surrender value will be as under:
- Surrender before completion of third policy anniversary:
The surrender benefit is payable only after completion of third policy anniversary and will be the balance in the Policyholder’s Account as on the date of surrender. During the lock-in period of 3 years from the date of commencement of policy no charges will be deducted from the Policyholder’s Account and no further interest will be credited from the date of surrender.
Surrender on or after completion of 3rd policy anniversary:
Balance in the Policyholder’s Account shall be payable.
DISCONTINUANCE OF PREMIUMS:
If premiums are not paid within the days of grace, the policy shall become a paid-up policy. The Life Assured shall have an option to revive the paid-up policy within 12 months from the date of first unpaid premium. During the revival period the life cover will cease and no mortality charges shall be deducted. The balance in the Policyholder’s Account during the period of revival will earn guaranteed interest rate of 5% p.a. without debiting any expenses. On revival of policy, the guaranteed rate of interest on Policyholder’s Account will again be 6% p.a. from the date of revival.
The benefits payable under the policy in different contingencies shall be as under:
I. In case of Death: The balance in the Policyholder’s Account is payable.
II. On Maturity: The balance in the Policyholder’s Account is payable.
III. In case of Surrender: Surrender benefit payable is as under:
Duration from date of commencement Surrender Benefit
Before completion of third policy anniversary The surrender benefit is payable only after completion of third policy anniversary and will be the balance in the policyholder’s Account as on the date of surrender. During the lock-in period of 3 years from the date of commencement of policy no charges will be deducted from the Policyholder’s Account and no further interest will be credited from the date of surrender.
On or after completion of 3rd policy anniversary Balance in the Policyholder’s Account
shall be payable.
COMPULSORY SURRENDER:
The policy shall be surrendered compulsorily in following cases:
- If less than 2 years’ premiums are paid and the policy is not revived during the revival period of 12 months, the policy shall be terminated compulsorily. The balance in the Policyholder’s Account shall be refunded on completion of third policy anniversary. No charges shall be deducted and no interest will be credited from the date of compulsory termination. In case of death, balance in the Policyholder’s Account shall be paid without waiting for completion of third policy anniversary.If any loan has been taken under the policy, and if, at any point of time, the balance in the Policyholder’s Account is less than or equal to loan outstanding alongwith interest thereon, then the policy shall be compulsorily terminated and nothing shall be payable to the Policyholder.
- LOAN:
Loan will be granted under the policy after completion of one year provided at least one full year’s premiums have been paid, subject to the following terms and conditions:
- It will be available maximum to the extent of 60% of the amount in the Policyholder’s Account
- Minimum amount of loan that can be granted at any time shall not be less than `1000
- If at any point of time during the term of the contract the Policyholder’s Account is less than or equal to the loan outstanding alongwith interest thereon, then policy shall be compulsorily terminated and nothing shall be payable to the policyholder.
The rate of interest charged for this loan amount would be determined from time to time by the Corporation.
