Summary of LIC Bima Shree Plan:
LIC Bima Shree Plan is a money back insurance policy. You have policy terms of 14, 16, 18 & 20 years and the premium payment term is 4 years less than the policy term. You get Guaranteed Additions and Loyalty Additions in this policy. This is a traditional life insurance policy and is designed for high net-worth individuals. You start getting payouts 4 years before the end of the policy term. We will understand this plan better with the help of some examples at the end of this review.
| Plan Name | Launch Date | Plan Details | Policy Type | UIN |
| LIC Bima Shree | 16Th March 2018 | Table No. 848 | Money Back Policy | 512N316V01 |
LIC Bima Shree Plan (848) Details:
LIC Bima Shree, Table No. 848, is a money back plan which provides guaranteed addition (GAs) at the rate of Rs. 50 per thousand of basic sum assured for first 5 policy years and Rs 55 per thousand of sum assured from sixth policy year till the year of last premium payment. Complete details like Premium, Money Backs, Risk Cover and Maturity of this plan has been explained with an Illustration.
Key Features:
- Guaranteed Additions during premium payment term.
- Availability of Accidental Death & Disability Benefit (AD & DB), Term Assurance riders.
- Premium Waiver Benefit (PWB) Rider in case of Minor Policy Holder.
- Paid premiums are exempted from income tax under 80C.
- Tax-free Money Backs and Maturity.
Plan Parameters
| Age at Entry | 8 years (Completed) Calculate your Age |
|---|---|
| Policy Term (Premium Paying Term) | 14(10), 16(12), 18(14), 20(16) |
| Maximum Age at Entry in Years) (As per Nearest Birthday) | |
| 55 Years for 14 Year Term | |
| 51 Years for 16 Year Term | |
| 48 Years for 18 Year Term | |
| 45 Years for 20 Year Term | |
| Basic Sum Assured | 10,00,000 and above in multiples of 1,00,000 |
| Premium Paying Mode | Yearly, Half Yearly, Quarterly & Monthly (SSS and NACH Only) |
| Premium Mode Rebate | 2% on yearly, 1% on Half Yearly, Nil on Quarterly & Monthly |
Money Back and Maturity:
The plan provides Guaranteed additions (GAs) at the rate Rs 50 per thousand of Sum Assured for first 5 policy years and Rs. 55 per thousand of sum assured from 6th year till the year of last premium payment and one-time loyalty addition on maturity. During the policy term, this plan provides two fixed money backs (as the certain percentage of Sum Assured) and on completion of the policy term, maturity will be Sum Assured + Guaranteed additions (GAs) + Loyalty Addition (LA). Following table provides money backs and maturity details of all term available in this plan.
| Policy Term (Years) | 1st Money Back | 2nd Money Back | Maturity Details (on completion of policy term) |
|---|---|---|---|
| 14 | 30% of SA at end of the 10th policy year | 30% of SA at end of the 12th policy year | 40% of SA + GAs + LA |
| 16 | 35% of SA at end of the 12th policy year | 35% of SA at end of the 14th policy year | 30% of SA + GAs + LA |
| 18 | 40% of SA at end of the 14th policy year | 40% of SA at end of the 16th policy year | 20% of SA + GAs + LA |
| 20 | 45% of SA at end of the 16th policy year | 45% of SA at end of the 18th policy year | 10% of SA + GAs + LA |
In the above table, SA is Basic Sum Assured or simply Sum Assured.
Risk Cover and Death Benefit:
In case of death during first 5 years of policy, the death claim will be 125 % of Basic Sum Assured + Guaranteed Addition (GAs) at the rate of Rs 50 per thousand of Sum Assured per year.
In case of death after completion of 5 policy years and before maturity, the death claim will be 125 % of Basic Sum Assured + Guaranteed Addition (GAs) at the rate of Rs 55 per thousand of Sum Assured per year (up to the policy year of last premium payment) + Loyalty Addition (LA).
Income Tax Benefit – Life Insurance premiums paid up to Rs. 1,50,000 are allowed as a deduction from the taxable income each year under section 80C under current Income Tax Rules. The Maturity Benefit is also tax-free under section 10(10)D subject to fulfillment of all terms and conditions. These tax rebates may be revised from time to time.
Loan - You can avail a lot against your policy once it acquires a Surrender Value. This plan acquires a Surrender Value after 2 years of premiums have been paid. Currently, the interest rate is 9.5% per annum. This may change from time to time. The maximum loan amount depends on the surrender value of the plan:
- If the policy is in-force - 90% of Surrender Value
- For paid-up policies - 80% of Surrender Value
Additional Benefits & Features of LIC Bima Shree:
Riders - You can choose from a list of 5 riders in this plan. They will offer increased benefits and flexibilities. You will have to pay additional premiums for the same. Please go through the rider benefit in detail before opting for it. The basic rider details are as follows:
Grace Period - You have a grace period of 30 days after your premium payment due date in case of yearly, half-yearly and quarterly payment modes. In case of monthly payment mode, the grace period is 15 days.
Option to defer taking the Survival Benefits - You can choose to not take the Survival Benefits when it is due. You can choose to take it anytime later during the policy term or take it along with the Maturity Benefit. You will be paid an interest rate for this. The interest rate will be the 5 year G-Sec rate minus 150 bps. Currently, this will translate to approximately 6.5% per annum. Please contact the LIC office to understand this better.
Option to take the Maturity Benefits in Instalments - This is also called the Settlement Option. You can choose to take the Maturity Benefits over 5, 10 or 15 years. You can choose yearly, half-yearly, quarterly or monthly payments. You will be paid an interest in this. You will need to contact the LIC office to know the interest rate being offered.
Option to take the Death Benefits in Instalments - If you opt for this, your nominee will get the Death Benefit over 5, 10 or 15 years. You can choose yearly, half-yearly, quarterly or monthly payments. You will be paid an interest in this. You will need to contact the LIC office to know the interest rate being offered.
Surrender Value - The plan can be surrendered if 2 years of premiums have been paid. The plan offers a Guaranteed Surrender Value and a Special Surrender Value. The special surrender value can only be known on contacting the LIC office at the time of surrendering. You guaranteed Additions also acquire a surrender value.
Check details of Surrender Value of LIC Bima Shree Plan.
- Accidental Death and Disability Benefit Rider - In case of death due to an accident, the Accident Benefit Rider Sum Assured will be paid along with the Basic Sum Assured of the plan. In case of disability arising due to accident (within 180 days from the date of accident), the Accident Benefit Sum Assured will be paid in monthly installments spread over 10 years and future premiums for Accident Benefit Sum Assured as well as premiums for the portion of Basic Sum Assured which is equal to Accident Benefit Sum Assured under the policy, shall be waived.
- Accident Benefit Rider - In case of death due to an accident, the Accident Benefit Rider Sum Assured will be paid along with the Basic Sum Assured of the plan.
- New Term Assurance Rider - An additional amount opted under the rider would be paid along with the Basic Sum Assured.
- New Critical Illness Benefit Rider - On the first diagnosis of any of the 15 critical illnesses covered in this rider, the Critical Illness Sum Assured will be paid to the policyholder.
- Premium Waiver Benefit Rider - The Proposer can opt for this when the Life Assured in this plan is a minor. In case of death of the Proposer, the future premiums are waived off.
Grace Period - You have a grace period of 30 days after your premium payment due date in case of yearly, half-yearly and quarterly payment modes. In case of monthly payment mode, the grace period is 15 days.
Option to defer taking the Survival Benefits - You can choose to not take the Survival Benefits when it is due. You can choose to take it anytime later during the policy term or take it along with the Maturity Benefit. You will be paid an interest rate for this. The interest rate will be the 5 year G-Sec rate minus 150 bps. Currently, this will translate to approximately 6.5% per annum. Please contact the LIC office to understand this better.
Option to take the Maturity Benefits in Instalments - This is also called the Settlement Option. You can choose to take the Maturity Benefits over 5, 10 or 15 years. You can choose yearly, half-yearly, quarterly or monthly payments. You will be paid an interest in this. You will need to contact the LIC office to know the interest rate being offered.
Option to take the Death Benefits in Instalments - If you opt for this, your nominee will get the Death Benefit over 5, 10 or 15 years. You can choose yearly, half-yearly, quarterly or monthly payments. You will be paid an interest in this. You will need to contact the LIC office to know the interest rate being offered.
Surrender Value - The plan can be surrendered if 2 years of premiums have been paid. The plan offers a Guaranteed Surrender Value and a Special Surrender Value. The special surrender value can only be known on contacting the LIC office at the time of surrendering. You guaranteed Additions also acquire a surrender value.
Check details of Surrender Value of LIC Bima Shree Plan.
LIC Bima Shree Plan Illustration:
Let us understand this plan better with the help of a few examples.
Suppose Bhavesh who is 30 years old buys this plan.
Basic Sum Assured - Rs. 10,00,000
Policy Term - 20 years
Premium Payment Term - 16 years
Annual premium - Rs. 1,08,584 + Taxes
Scenario 1 - Bhavesh dies after 3 years of buying the plan.
Death Benefit = His nominee will get the highest of the following as “Sum Assured on Death” + “Guaranteed Additions”
The Sum Assured on Death is the highest of the following:
So the nominee will get Rs. 12,50,000 + Rs. 1,50,000 = Rs. 14,00,000.
The policy terminates.
Scenario 2 - Bhavesh dies after paying premiums for 7 years.
Death Benefit = His nominee will get the highest of the following as “Sum Assured on Death” + “Guaranteed Additions” + “Loyalty Additions” if any
The Sum Assured on Death is the highest of the following:
Guaranteed Additions -
For the 1st 5 years - Rs. 50 per 1,000 Sum Assured every year = 5 x 50,000 = Rs. 2,50,000.
For 6th & 7th years - Rs. 55 per 1,000 Sum Assured for 2 years = 2 x 55,000 = Rs. 1,10,000
So the nominee will get Rs. 12,50,000 + Rs. 2,50,000 + 1,10,000 = Rs. 16,10,000 + Loyalty Additions if declared.
The policy terminates.
Scenario 3 - Bhavesh dies after paying premiums for 17 years.
Navjot would be eligible to receive the 1st tranche of Survival Benefit. In addition, his nominee will receive the Death Benefit.
Survival Benefit - Bhavesh would get this after the 16th year.
The Sum Assured on Death is the highest of the following:
For the 1st 5 years - Rs. 50 per 1,000 Sum Assured every year = 5 x 50,000 = Rs. 2,50,000.
For remaining 12 years - Rs. 55 per 1,000 Sum Assured for 12 years = 12 x 55,000 = Rs. 6,60,000
So the nominee will get Rs. 12,50,000 + Rs. 2,50,000 + 6,60,000 = Rs. 21,60,000 + Loyalty Additions if declared.
Scenario 4 - Bhavesh survives the policy term.
Bhavesh will get the Survival Benefits and the Maturity Benefits.
Survival Benefit after 16 years = 45% of Basic Sum Assured = 45% of Rs. 10,00,000 = Rs. 4,50,000.
Survival Benefit after 18 years = 45% of Basic Sum Assured = 45% of Rs. 10,00,000 = Rs. 4,50,000.
Maturity Benefit = 10% of Basic Sum Assured + Guaranteed Additions + Final Additions if any.
10% of Basic Sum Assured = 10% x 10,00,000 = Rs. 1,00,000
Guaranteed Additions in the first 5 years = 5 x Rs. 50,000 = Rs. 2,50,000
Guaranteed Additions in the 6th to 20th years = 15 x Rs. 55,000 = Rs. 8,25,000
So Bhavesh will receive - Rs. 11,75,000 at the end of the policy term.
The policy terminates.
Suppose Bhavesh who is 30 years old buys this plan.
Basic Sum Assured - Rs. 10,00,000
Policy Term - 20 years
Premium Payment Term - 16 years
Annual premium - Rs. 1,08,584 + Taxes
Scenario 1 - Bhavesh dies after 3 years of buying the plan.
Death Benefit = His nominee will get the highest of the following as “Sum Assured on Death” + “Guaranteed Additions”
The Sum Assured on Death is the highest of the following:
- 10 times the Annualised premium = 10 x 1,08,584 = Rs. 10,85,840
- 125% of the Basic Sum Assured = 125% x 10,00,000 = 12,50,000
- 10% of the Basic Sum Assured = 10% x 10,00,000 = Rs. 1,00,000
So the nominee will get Rs. 12,50,000 + Rs. 1,50,000 = Rs. 14,00,000.
The policy terminates.
Scenario 2 - Bhavesh dies after paying premiums for 7 years.
Death Benefit = His nominee will get the highest of the following as “Sum Assured on Death” + “Guaranteed Additions” + “Loyalty Additions” if any
The Sum Assured on Death is the highest of the following:
- 10 times the Annualised premium = 10 x 1,08,584 = Rs. 10,85,840
- 125% of the Basic Sum Assured = 125% x 10,00,000 = 12,50,000
- 10% of the Basic Sum Assured = 10% x 10,00,000 = Rs. 1,00,000
Guaranteed Additions -
For the 1st 5 years - Rs. 50 per 1,000 Sum Assured every year = 5 x 50,000 = Rs. 2,50,000.
For 6th & 7th years - Rs. 55 per 1,000 Sum Assured for 2 years = 2 x 55,000 = Rs. 1,10,000
So the nominee will get Rs. 12,50,000 + Rs. 2,50,000 + 1,10,000 = Rs. 16,10,000 + Loyalty Additions if declared.
The policy terminates.
Scenario 3 - Bhavesh dies after paying premiums for 17 years.
Navjot would be eligible to receive the 1st tranche of Survival Benefit. In addition, his nominee will receive the Death Benefit.
Survival Benefit - Bhavesh would get this after the 16th year.
- 45% of Basic Sum Assured = 45% of Rs. 10,00,000 = Rs. 4,50,000
The Sum Assured on Death is the highest of the following:
- 10 times the Annualised premium = 10 x 1,08,584 = Rs. 10,85,840
- 125% of the Basic Sum Assured = 125% x 10,00,000 = 12,50,000
- 10% of the Basic Sum Assured = 10% x 10,00,000 = Rs. 1,00,000
For the 1st 5 years - Rs. 50 per 1,000 Sum Assured every year = 5 x 50,000 = Rs. 2,50,000.
For remaining 12 years - Rs. 55 per 1,000 Sum Assured for 12 years = 12 x 55,000 = Rs. 6,60,000
So the nominee will get Rs. 12,50,000 + Rs. 2,50,000 + 6,60,000 = Rs. 21,60,000 + Loyalty Additions if declared.
Scenario 4 - Bhavesh survives the policy term.
Bhavesh will get the Survival Benefits and the Maturity Benefits.
Survival Benefit after 16 years = 45% of Basic Sum Assured = 45% of Rs. 10,00,000 = Rs. 4,50,000.
Survival Benefit after 18 years = 45% of Basic Sum Assured = 45% of Rs. 10,00,000 = Rs. 4,50,000.
Maturity Benefit = 10% of Basic Sum Assured + Guaranteed Additions + Final Additions if any.
10% of Basic Sum Assured = 10% x 10,00,000 = Rs. 1,00,000
Guaranteed Additions in the first 5 years = 5 x Rs. 50,000 = Rs. 2,50,000
Guaranteed Additions in the 6th to 20th years = 15 x Rs. 55,000 = Rs. 8,25,000
So Bhavesh will receive - Rs. 11,75,000 at the end of the policy term.
The policy terminates.
CHECK YOUR PREMIUM HERE:
CHECK YOUR MATURITY HERE:
VIDEO TUTORIAL:
BIMA SHREE PLAN PDF FILE – Bima Shree Plan 848
ANNEXURE 1 – BIMA SHREE – Annexure 1_Bima Shree
BIMA SHREE WITH PROFIT PDF FILE – Gist 848 Bima Shree With profit
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