To celebrate the diamond jubilee anniversary in the year 2016, Life Corporation of India has launched a new life insurance product named “Bima Diamond Plan”. It is a traditional, non-linked money back policy which allows policyholders to receive guaranteed pay outs on the completion of every four policy years. LIC Bima Diamond Plan comes with triple benefits of money back, enhanced protection, and auto cover feature. The policy is suitable for those who are looking for life coverage that provides guaranteed returns in periodic instalments.
Premium paying term: The policyholders are given three options as premium paying term to choose from.
Option 1: If the policy term is 16 years, the premium payment term is 10 years, and the policyholder will get periodic instalments five times.
Option 2: If the policy term is 20 years, the policyholder will have to pay premiums for 12 years.
Option 3: In case the policy term is 24 years, the premium paying term will be 15 years.
The policy offers optional riders with an additional premium to enhance the coverage.
Death benefit: Death benefit is the amount paid to the nominee in case the life insured dies during the policy term.
If death occurs during the first five policy years, the sum assured on death will be paid to the nominee. It is either 10 times of the annual premium, the absolute amount assured or the sum assured on maturity, and whichever is higher is paid as the sum assured on death as death benefit.
If death occurs before the maturity date, but after five policy years, the sum assured on death along with loyalty additions, if any will be paid to the nominee. In this case, the death benefit will not exceed 105% of all the premiums paid as of the death of the life insured.
If the death of the life insured occurs during the extended period of the plan, an amount equal to 50% of the basic sum assured will be paid to the nominee.
Maturity benefit: LIC Bima Diamond Policy offers a maturity benefit if the life insured survives until the maturity date of the plan. Upon maturity, the life insured will receive the sum assured on maturity along with loyalty additions, if any. The sum assured paid on maturity is 55% of the basic sum assured for a policy term of 16 years, and 40% of the basic sum assured for the policy term of 20 and 24 years.
Survival benefit: LIC Bima Diamond policy offers survival benefit if the life insured survives for a specified duration. In such a case, the policyholder will get a fixed percentage of the basic sum assured. Below is the table that lists out the survival benefit schedule for different time intervals.
| Policy term | 4th year | 8th year | 12th year | 16th year | 20th year |
|---|---|---|---|---|---|
| 16-year | 15% | 15% | 15% | - | - |
| 20 year | 15% | 15% | 15% | 15% | - |
| 20 year | 12% | 12% | 12% | 12% | 12% |
| Parameter | Minimum | Maximum |
|---|---|---|
| Sum assured | Rs. 1,00,000 | Rs. 5,00,000 |
| Policy term | 16,20 and 24 years | |
| Premium payment term | 10 years for policy term 16 years 12 years for policy term 20 years 15 years for policy term 24 years |
|
| Entry age | 14 years | 50 years |
| Age at maturity | - | 66 years for policy term 16 years 65 years for policy term 20 and 24 years |
| Premium payment frequency | Yearly, half-yearly, quarterly and monthly | |
Following are some of the sample tabular annual premium rates (in Rs.) (exclusive of service tax) per Rs. 1000/- Basic Sum Assured:
| AGE / POLICY TERM(PPT) | 16(10) | 20(12) | 24(15) |
|---|---|---|---|
| 20 | 87.80 | 74.15 | 60.05 |
| 30 | 88.80 | 75.70 | 61.75 |
| 40 | 92.25 | 79.70 | 66.05 |
| 50 | 99.95 | - | - |
Tax benefits: The premiums paid towards the policy and benefits received are eligible to receive tax benefits under Section 80C and 10(10D) of the Income Tax Act, 1961, respectively.
Riders: The Bima Diamond policy from LIC comes with two rider options.
Loan facility: LIC Bima Diamond policyholders can avail loan facility by using the sum assured as collateral. However, the loan facility is available only if the premiums are paid off for the first three policy years. Moreover, the maximum loan amount will not exceed the surrender value mentioned under the policy document. A loan can be availed up to 90% of the surrender value for inforce policies, while the loan for paid-up plans can go up to 80% of the surrender value of the policy.
Grace period: Policyholders are provided with 30 days of grace period for premium payment pertaining to yearly, half-yearly, and quarterly modes. While the same remains at 15 days in case of monthly premium payment mode. The policy lapses if no premium is paid within the grace period.
Free-look period: The LIC Bima Diamond policy comes with a free-look period of 15 days, which policyholders can utilise to understand if they are satisfied with the policy terms. In case they are not happy with the policy, they can cancel the same by stating the reason for cancellation. Upon reviewing the request, the company will cancel the plan and refund any premium paid.
Policy revival: In case the policy lapses due to non-payment of premium within the expiry of a grace period, the plan can still be revived by the policyholder. The revival request should be sent to the insurance company within two years of the first unpaid premium. Moreover, the company reserves the rights to reinstate or modify the terms and conditions, or outright reject such revival application. Nomination: Nomination of LIC Bima Diamond policy is allowed under Section 39 of The Insurance Act, 1938.
Assignment: Assignment of LIC Bima Diamond policy is allowed under Section 38 of The Insurance Act, 1938.
Auto-cover period: The LIC Bima Diamond policy offers coverage for a certain duration even if the premiums are not paid. Here are the coverage details.
Policy surrender: Policyholder has an option to surrender the plan at any given point of time. The only prerequisite to policy surrender is that the premiums must be paid for at least 3 consecutive policy years. Once the policy is surrendered, the insurance company will pay the value that is equal to the (GSV) Guaranteed Surrender Value or the (SSV) Special Surrender Value, whichever is higher.
Rebates: The company offers rebates for those who opt for higher mode and the high coverage amount.
Rebate on premium payment mode
| Mode | Rebate percentage |
|---|---|
| Monthly and quarterly mode | No rebate |
| Half-yearly mode | 1% |
| Yearly mode | 2% |
Rebate on higher sum assured
| Basic sum assured | Rebate percentage |
|---|---|
| Rs. 1,00,000 to 1,80,000 | No rebate |
| Rs. 2,00,000 to Rs. 4,80,000 | Rs. 2.50 |
| Rs. 5,00,000 | Rs. 3.00 |
Applying for Bima Diamond Policy is rather simple. To begin with, the customer needs to submit the following documents to the insurance company. These documents include:
Age proof: Driving license, Passport, School/college certificate, PAN card can be submitted as an address proof.
Identity proof: PAN card, Aadhaar card, Birth Certificate, Voter ID, or driving license can be used as an identity proof.
Address proof: Utility bill, Aadhaar card, or bank account statement can be presented as an address proof.
Along with the documents listed above, the customer has to fill up the policy application form and also provide self-attested copies of the KYC documents.
The LIC Bima Diamond policy will void in the following two cases:
LIC Bima Diamond Plan is non-linked, money back plan that gives the policyholder an option to choose from different policy terms and premium payment terms. The policy pays the money back to the life insured at regular intervals.
The policy is suitable for those who wish to receive comprehensive coverage with a return on investment. Policyholders can enhance life coverage by adding optional riders to the basic policy. The two riders available under LIC Bima Diamond plan are LIC Accidental Death Benefit Rider and LIC New Term Insurance Rider. The policy offers a free-look period of 15 days and also provides a grace period to make the payment of due premium. Moreover, the policy offers discounted premium rates for certain premium payment terms and for higher sum assured. The policyholder can surrender the policy once the policy becomes paid-up. Moreover, the loan facility is available for up to 90% of the surrender value of the plan.
As per LIC Bima Diamond plan, the policyholder is entitled to receive maturity and survival benefit, and the nominee is eligible to receive the death benefit sum assured. The premiums paid and benefits received against the policy are entitled to receive tax benefits under Section 80C and 10(10D) of the Income Tax Act, 1961.
The policy offers guaranteed returns and helps one to take care of insurance and financial needs for medium and long term.
