# 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 networth 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 | LIC Beema Shree |

Launch Date | 13th June, 2018 |

Plan Details | Table No. 848 |

Policy Type | Money Back Policy |

UIN | 512N316V01 |

## Key Features

- Money Back Plan for a tenure of 14, 16, 18 & 20 years
- Premiums need to be paid for (Policy term - 4 years) only

Designed for high networth individuals

Choice of 5 riders by paying additional premiums

- Accidental Death and Disability Benefit Rider
- Accident Benefit Rider
- New Term Assurance Rider
- New Critical Illness Benefit Rider
- Premium Waiver Benefit Rider

## Benefits

We have 2 scenarios here…

**Death during the first 5 policy years**- Nominee will be paid the “Sum Assured on Death” + “Guaranteed Additions” which have accrued so far**Death after the first 5 policy years**- Nominee will be paid the “Sum Assured on Death” + “Guaranteed Additions” which have accrued + “Loyalty Additions” if declared

The **Sum Assured on Death** is defined as **higher** of the following:

- 10 times the Annualised premium
- 125% of the Basic Sum Assured
- Sum Assured on Maturity, which is:
- 40% of the Basic Sum Assured for 14 year policy term
- 30% of the Basic Sum Assured for 16 year policy term
- 20% of the Basic Sum Assured for 18 year policy term
- 10% of the Basic Sum Assured for 20 year policy term

The Sum Assured on Death will always be a minimum of 105% of all premiums paid. The premiums here do not include the tax components.

The **Guaranteed Additions** will be as follows:

**During the 1st 5 policy years**- Rs. 50 per 1,000 Basic Sum Assured**After 5 policy years till the end of the premium payment term**- Rs. 55 per 1,000 Basic Sum Assured

The **Loyalty Additions** cannot be known in advance. This is declared by LIC every year.

On survival during the policy, the Life Insured will get the following:

**For policy term of 14 years**- 30% of Basic Sum Assured at the end of the 10th and 12th policy year**For policy term of 16 years**- 35% of Basic Sum Assured at the end of the 12th and 14th policy year**For policy term of 18 years**- 40% of Basic Sum Assured at the end of the 14th and 16th policy year**For policy term of 20 years**- 45% of Basic Sum Assured at the end of the 16th and 18th policy year

The policy continues till the end of the policy term, at which point you get the Maturity Benefit.

On survival till the end of the Policy Term, the policyholder will get the following payouts depending on the policy term:

**For policy term of 14 years**- 40% of Basic Sum Assured**For policy term of 16 years**- 30% of Basic Sum Assured**For policy term of 18 years**- 20% of Basic Sum Assured**For policy term of 20 years**- 10% of Basic Sum Assured

The Guaranteed Additions which have accrued every year and the Loyalty Additions will also be paid at Maturity.

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 fulfilment of all terms and conditions. These tax rebates may be revised from time to time.

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 policy is in-force**- 90% of Surrender Value**For paid-up policies**- 80% of Surrender Value

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:

**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 instalments 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.

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.

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.

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 for this. You will need to contact the LIC office to know the interest rate being offered.

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 know 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.

## How it works

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:

- 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** - Rs. 50 per 1,000 Sum Assured for 3 years = 3 x 50,000 = Rs. 1,50,000..

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**

**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 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.

I hope this helps you understand this plan really well. Please understand all plans before buying them - once you take it, you will have to pay a heavy price if you discontinue in between. If you have any questions on this policy, please comment below and we will get back to you immediately.

## Eligibility

Minimum | Maximum | |

Sum Assured | Rs. 10,00,000 | No Limit |

Policy Term | 14, 16, 18 & 20 years | |

Premium Payment Term | Policy Term - 4 years | |

Entry Age | 8 years (completed age) |
55 years - for 14 year term 51 years - for 16 year term 48 years - for 18 year term 45 years - for 20 year term (nearest age) |

Age at Maturity | - | 69 years - for 14 year term 67 years - for 16 year term 66 years - for 18 year term 65 years - for 20 year term (nearest age) |

Payment Modes | Yearly, Half-Yearly, Quarterly, Monthly |

**Date of vesting under this plan**: The policy shall automatically vest on the Life Assured on the policy anniversary coinciding with or immediately following the completion of 18 years of age and shall on such vesting be deemed to be a contract between the Corporation and Life Assured.