LIC Bima Account 2
This plan has been withdrawn by the insurance company and is no longer available for sale.
LIC Bima Account 2 Policy
Bima Account 2 is a traditional life insurance policy from LIC which offers a guaranteed return of 6% every year for all the money held in the policy holder’s account. All premiums paid less the charges are held in this account. Also the plan is very simple to understand and is very transparent. It is the first traditional plan to declare the list of all charges which are applicable. This is a higher version LIC Bima Account 1.
Key Features
Benefits
In case of death of the policy holder, the nominee would receive the Sum Assured + the amount in the policy holders account (net of premiums paid + assured returns + any additions).
On maturity the policy holder would get the amount in the policy holder’s account (net of premiums paid + assured returns + any additions).
Premiums paid towards Life Insurance policies up to Rs.1,50,000 are allowed as a deduction from the taxable income each year under section 80C. The maturity amount too is tax free.
In Bima Account 2, there is a guaranteed return of 6% of the money held in the policy holder’s account. The policy holder’s account consists of all premiums paid net of charges along with the guaranteed interest earned every year + any additional interest earned.
Based on the performance of the policy an additional interest may be declared every year.
You can top up your policy to an amount equal to the sum of all regular premiums paid. This can be done only after the 1st policy year. There is no increase in the Sum Assured based on the top-up paid and it does not form part of the policy holder’s account. So the guaranteed 6% returns would not apply to the Top-Up amount paid.
Loan can be availed in the Bima Account 2. The maximum loan amount would be 60% of the amount held in the policy holder’s account. If at any moment the loan amount outstanding along with the interest exceeds the policy holders account, the policy would be terminated and nothing would be payable to the customer.
The policy would acquire surrender benefits as soon as the 1st year’s premiums have been paid. The benefits are payable only after 3 years though. If you surrender the policy before paying 3 years of premium, no additional charge would be levied on the account and no credit also would be credited to the account. If you surrender after paying premiums of 3 years, the amount held in the policy holder’s account would be payable.
You policy would acquire a paid-up value if the premiums are no paid within the grace period. The policy can be revived within 12 months from the date of the 1st unpaid premium. No life cover is provided during the revival period. The amount in the policy would continue to earn a 5% interest till it is revived.
How it works
Expense Charges (which includes the commission charge paid to agents)
1st Year | 2nd & 3rd year | 4th to 7th Year | |
For regular Premiums | 27.5% | 7.5% | 5% |
Top Up Premiums | 2.5% of the top-up amount |
Mortality Charges (for every Rs.1000 of Sum Assured)
Entry Age | Upto 20 years | 20 to 30 years | 30 to 40 years | 40 to 50 years |
Per Rs. 1000 of SA | 1.25 | 1.46 | 2.57 | 6.56 |
Sample illustration of premium amount in Bima Account 2
Age = 35 years
Policy Term = 15 years
Annual Premium = Rs.15,000
Total Premiums paid in 7 years = Rs.2,250,000
Eligibility
Minimum | Maximum | |
Sum Assured (in Rs.) | 10 x Annualised Premium | For age <= 35
30 x Annualised Premium For age 36 to 45 20 x Annualised Premium For age 46 to 50 10 x Annualised Premium |
Policy Term (in years) | 10 | 15 |
Premium Payment Term (in years) | Same as policy term | |
Annual Premium | Rs.15,000 | No limit |
Top Up Premium | - | Sum of all regular premiums paid |
Entry Age of Policyholder | 8 | 60 |
Age at Maturity | 18 | 70 |
Single premium | NA | NA |
Payment modes | Yearly, Half-Yearly, Quarterly and Monthly (ECS) |