LIC’s New Bima Bachat

The New Bima Bachat Policy is a great option for anyone who is looking for the dual benefits of savings as well as protection from a plan. This plan offers financial protection to the nominees in case of death of the policyholder. Additionally, it also provides money-back or survival benefits at particular intervals during the policy tenure.

Key Features of LIC Bima Bachat

The key highlights of the New Bima Bachat plan by LIC are:

One-time premium: Policyholder needs to pay the premium as a lump sum at the beginning of the policy term.
Premium cashback: On completion of the policy term, the one-time premium is returned back to the policy holder along with the applicable loyalty bonus.
Liquidity: The New Bima Bachat plan offers liquidity to the policyholders in the form of a loan facility. This clause becomes applicable once the policy is at least one-year old. The loan value is equivalent to 60% of the surrender value of the New Bima Bachat policy. The loan facility is subject to production of relevant documents and title by the policy holder.
Rebates for higher sum assured: Policy holders who opt for higher sum assured are offered rebates by the Corporation. The rebate rates are as follows:

9-year policy term

Sum Assured	Rebate %
Below Rs. 75,000	Zero
Rs. 75,000 – Rs. 150,000	6%
More than Rs. 150,000	8%

12-year policy term

Sum Assured	Rebate %
Below Rs. 100,000	Zero
Rs. 100,000 – Rs. 200,000	4%
More than Rs. 200,000	6%

15-year policy term

Sum Assured	Rebate %
Below Rs. 150,000	Zero
Rs. 150,000 – Rs. 300,000	3%
More than Rs. 300,000	5%

Benefits of LIC Bima Bachat

There are four types of benefits which are paid to LIC New Bima Bachat policy holders at various stages of the policy term. These are:

Death Benefit: This benefit becomes payable to the nominee(s) in the event of death of the insured. In case the death takes place within the first five years of the policy term, then an amount equal to the sum assured is given to the recipients. Post completion of the five-year period, then in addition to the sum assured, the applicable loyalty bonus is also paid to the nominees of the policy holder.
Survival Benefit: These benefits become payable at specified intervals to the policy holder. A fixed portion from the sum assured (15%) is given as a survival benefit from the third year of the policy. o Policy tenure is for 9 years Payment at the completion of the third and sixth year of the policy. o Policy tenure is for 12 years Payment at the completion of the third, sixth and ninth year of the policy. o Policy tenure is for 15 years Payment at the completion of the third, sixth, ninth and twelfth year of the policy.
Maturity Benefit: The maturity benefit becomes payable when the insured life survives the duration of the policy term. An amount equivalent to the premium paid (one-time lump sum) along with the applicable loyalty addition is paid to the life assured. This payment is done after taking into account the applicable taxes and any extra premium paid by the policy holder.
Loyalty Benefit: The loyalty additions are paid at the discretion of the Corporation. Based on the profits of the Corporation, it declares loyalty additions for policyholders. To be eligible for this, the policy should have completed minimum five years. It is paid either on maturity of the policy or on the death of the life insured.

Eligibility Criteria for LIC Bima Bachat Plan

Indian residents who fulfill the below mentioned age criteria can buy this plan:

Age at the time of entry:
- Should have completed 15 years
- Should not be more than
 66 years in case of a 9-year policy
 63 years in case of a 12-year policy
 60 years in case of a 15-year policy
The maximum age at the time of maturity should not be more than 75 years.

Tax Implication of LIC New Bima Bachat Plan

Premium: The premiums paid are eligible for tax deduction under Section 80 C of the Income Tax Act, 1961.
Survival or Maturity Benefits: The payouts received are also tax free under Section 10(10D) of the Income Tax Act, 1961.
Death Benefits: Claim amount paid on the death of the life insured is also completely tax-free.

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Exclusions in LIC New Bima Bachat Plan

In case the policy holder commits suicide within a period of 12 months from the start of the plan term, the policy is declared null and void by the Corporation. In such a scenario, no claim is payable to the nominees except an amount equivalent to 90% of the one-time premium amount (after deducting the taxes and additional premium, if applicable). This applies to all cases including individuals who were declared mentally fit and sane at the time of policy issuance.

Also, the Corporation has the right to forfeit the policy in certain situations:

It is discovered that any material information is withheld by the policy holder at the time of policy issuance
Documents submitted by the policy holder are false
Any other information provided is untrue.

In such cases, any benefit payable to the policy holder will be as per the Provisions of Section 45 of the Insurance Act as prevailing at that time.

Surrendering or cancelling the LIC New Bima Bachat Plan

One of the USPs of the New Bima Bachat Plan is the liquidity it offers to the policy holders. One can surrender the policy at any time in exchange for cash. The surrender value that is guaranteed to the policy holder is:

First Year 70% of the one-time premium is given back to the policy holder after taking into account the applicable taxes or extra premium.
Any other year If the policy is surrendered in any year (after the first year of the policy), 90% of the one-time premium paid (after deducting the taxes and additional premium, if any) is returned to the policy holder.

Another great feature of this plan is the “cooling-off period”. In case someone is dissatisfied with the terms of the policy, he or she can cancel the policy within a period of 15 days from the receipt of the policy. The Corporation on receiving such application, returns the amount paid by the policy holder towards the one-time payment. The only deductions from the payment are medical test charges, stamp duty and the proportionate premium for the policy duration. Some people also refer to this as the “Free-Look” period.

Where to buy LIC New Bima Bachat Plan

The New Bima Bachat Plan is currently available only through the offline mode. In order to buy this policy, individuals need to visit the Corporation office or branches. Alternatively, one can also seek the help of intermediaries such as LIC agents or brokers to purchase the plan.

FAQs on LIC New Bima Bachat

How much insurance does one get under LIC Bima Bachat?

The starting point for sum assured under this plan is Rs. 35,000 (for a 9-year term), Rs. 50,000 (for a 12-year term) and Rs. 70,000 (for a 15-year term). The Corporation has not placed any upper limit for sum assured.

Why should you buy the New Bima Bachat Plan from LIC?

It offers the twin benefit of security along with insurance cover. Additionally, it is a highly liquid plan which ensures that you can get immediate cash whenever you need it.

What does the New Bima Bachat Plan cover?

This plan offers financial protection in case of death and awards cashbacks or survival benefits at specified intervals during the policy term.

What are the documents required for claim process?

The following documents are required in case of a death claim:

Original Policy document
Claim Forms stating the details of the life insured and the nominees
Death certificate issued by a recognized body
Details of medical treatment if the policy holder was hospitalized
NEFT details for payment

(In case of death due to an accident or declared unnatural, additional documents such as police records, FIR Statement, post-mortem reports may also be required).

In case of a maturity claim, the policy holder needs to send the duly filled in claim discharge form to the Corporation along with the original copy of the policy document, Mandate form for NEFT and age proof if not shared earlier.

Who is eligible for LIC Bima Bachat Policy?

All Indian residents who fulfill the age criteria are eligible to buy the LIC Bima Bachat policy. The policy holder should be at least 15 years (completed) old at the time of entry into the plan. The maximum age (for buying the plan) varies basis the tenure of the policy. Also, at the time of maturity the policy holder should not be more than 75 years.