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LIC Bima Ratna Plan
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LIC Bima Ratna Plan Review
LIC Bima Ratna is a Non-Linked, Non-Participating, Individual, Savings, Life Insurance Plan which offers a combination of protection and savings. This plan provides financial support for the family in case of the unfortunate death of the policyholder during the policy term. It also provides periodical payments at specified durations to meet the various financial needs of the policyholder.
Launch Date
27th May 2022
Table Number
864
Product Type
Endowment
Bonus
Yes
UIN
512N345V01
How LIC Bima Ratna Plan works
The policyholder chooses the Sum Assured and the Term of the plan when buying the policy. Based on the age of the insured, the sum assured and the policy term selected, the premium is determined.
If the insured survives till the end of the policy term and all premiums have been paid, a MaturityBenefit would be paid to the policyholder. Maturity benefit would be equal to the Sum Assured + Bonus Amounts which have been received throughout the policy term + any Final Addition Bonus if declared. Now if the death of the insured occurs during the policy tenure, the nominee will get ‘Sum assured on death’ with Accrued Guaranteed Additions. Where “Sum Assured on Death” is defined as the higher of 125% of Basic Sum Assured or 7 times of annualized premium.
COMPARE THIS PLAN WITH OTHER ENDOWMENT PLANS
LIC Bima Ratna Plan Policy Benefits
Maturity Benefit – On Life Assured surviving the stipulated Date of Maturity provided the policy is in force, “Sum Assured on Maturity” along with accrued Guaranteed Additions, shall be payable. Where “Sum Assured on Maturity” is equal to 50% of Basic Sum Assured.
Death Benefit – Death Benefit payable on the death of Life Assured during the policy term after the date of commencement of risk shall be “Sum Assured on Death” along with Accrued Guaranteed Additions. Where “Sum Assured on Death” is defined as the higher of 125% of Basic Sum Assured or 7 times of annualized premium. This Death Benefit payment shall not be less than 105% of total premiums paid (excluding any extra premium, any rider premium (s), and taxes) up to the date of death. However, in the case of minor Life Assured, whose age at entry is below 8 years, on death before the commencement of Risk, the Death Benefit payable shall be a refund of premium(s) paid (excluding taxes, any extra premium, and rider premium(s), if any), without interest.
Survival Benefit: On the life assured surviving till each of the specified duration during the policy term, a fixed percentage of Basic Sum Assured shall be payable. The fixed percentage for various policy terms is as below:
Policy Term (in years)
Payment of Survival Benefit
15
25% of the Basic Sum Assured at the end of each 13th and 14th policy year.
20
25% of the Basic Sum Assured at the end of each of the 18th and 19th policy year
25
25% of the Basic Sum Assured at the end of each 23rd and 24th policy year
Bonus – Guaranteed Additions (GA) shall accrue at the end of the each Policy Year at the rate as specified below:
Policy Year
Guaranteed Additions (per Rs 1000 Basic Sum Assured)
From 1st to 5th
Rs. 50
From 6th to 10th
Rs. 55
From 11th to 25th
Rs. 60
So if you have a cover of Rs. 20,00,000 the GA would be as follows:
1st to 5th year: 50 x 20 lakhs / 1,000 = Rs. 1 lakh each year = Rs. 5 lakhs
6th to 10th year: 55 x 20 lakhs / 1,000 = Rs. 1.1 lakh each year = Rs. 5.5 lakhs
11th to 25th year: 60 x 20 lakhs / 1,000 = Rs. 1.2 lakh each year = 18 lakhs
So you get Guaranteed Addition of Rs. 5 + 5.5 + 18 lakhs = 28.5 lakhs
We will explain the plan with the help of an example.
Example – Yash, aged 30 years, buys LIC Bima Ratna Plan.
Sum Assured = Rs. 20 lakhs
Policy term = 25 years
Premium Paying Term = 21 years
Year of Purchase = 2022
Annual Premium = Rs. 1,16,178 + 4.5% GST
The premium would be payable for a duration of 21 years.
Scenario 1 – Yash survives till the end of the policy tenure,
Total Premium Paid in 21 years = Rs. 1,16,178 x 21 = Rs. 24,39,738
The Guaranteed Additions which he will receive:
Policy Year
Guaranteed Addition
1 - 5
5 lakhs
6 - 10
5.5 lakhs
11 - 25
18 lakhs
Total
28.5 lakhs
The Survival Benefits he will receive:
Policy Year
Money-Back
23
5 lakhs
24
5 lakhs
Total
10 lakhs
So Total Benefis in the policy = Rs. 28.5 + 10 lakhs = 38.5 lakhs
Scenario 2 – Yash dies during the policy term.
If Yash dies in the year 2035 (at age 43), then by that time,
Total premium paid = 13 x Annual Premium = Rs. 15,10,314
The nominee will get 125% of Sum Assured + Guaranteed Addition Bonus which is added every year.
Death Benefit = 125% of 20 Lakhs + (1 Lakh for 5 years) + (1.1 Lakh for 5 years) + (1.2 Lakhs for 3 years) = Rs. 39,10,000
Sample Premium Illustration for LIC Bima Ratna Plan (864)
Here are the sample tabular premium rates payable by a healthy, non-tobacco user male for different combinations of age and policy terms. The Sum Assured is taken to be Rs.20 lakhs.
Sample Premium Chart of LIC Bima Ratna
Age
Policy Term (Premium Paying Term)
15 (11)
20 (16)
25 (21)
20
2,16,040
1,51,066
1,14,218
30
2,16,824
1,52,340
1,16,178
40
2,20,744
1,57,534
1,22,940
50
2,32,602
1,71,548
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Key Features of the LIC Bima Ratna Plan
The plan participates in bonus declarations which enhance the benefits payable.
Premiums are required to be paid for the complete plan duration.
The plan provides an additional Accidental Death and Disability Benefit Rider which provides an additional benefit in case of accidental death or disability.
Loans can be taken under the plan if the plan acquires a Surrender Value.
Rebates in premiums are allowed for choosing a high level of Sum Assured and also for paying premiums annually or semi-annually.
Eligibility conditions & other restrictions in LIC Bima Ratna Plan
Minimum
Maximum
Sum Assured
(in Rs.)
5,00,000
No-Limit
(Basic Sum Assured shall be in multiples of Rs 25,000)
Policy Term
(in years)
15, 20, and 25
15 & 20 (in case of policies procured through POSP-LI/CPSC- SPV)
Premium Payment Term
(in years)
11 years for a Policy Term of 15 years
16 years for a Policy Term of 20 years
21 years for a Policy Term of 25 years
Entry Age
- 5 years (Completed) for a Policy Term of 15 years
- 90 days (Completed) for a Policy Term of 20 & 25 years
- 55 years (Age Nearer Birthday) for a Policy Term of 15 years
- 50 years (Age Nearer Birthday) for a Policy Term of 20 years
- 45 years (Age Nearer Birthday) for a Policy Term of 25 years
- 65 years (Age Nearer Birthday) minus Policy Term (in case of policies procured through POSP-LI/CPSC-SPV )
Maturity Age
- 20 years (Completed) for a Policy Term of 15 & 20 years
- 25 years (Completed) for a Policy Term of 25 years
- 70 years (Age Nearer Birthday)
- 65 years (Age Nearer Birthday) in case of policies procured through POSP-LI/CPSC-SPV)
Payment mode
Yearly, Half-yearly, Quarterly, Monthly
Tax Benefits of LIC Bima Ratna Policy
Premiums – The premiums paid for the plan are exempt from taxation under Section 80C of the Income Tax Act. The maximum exemption that can be availed is Rs.1.5 lakhs. To claim this exemption, the premium should be restricted to 10% of the Sum Assured selected.
Maturity Claim – Any amount received on plan maturity is exempt from taxation under Section 10(10D). To claim this exemption, the Sum Assured should be at least 10 times the premium amount paid.
Death Claim – Death claims received under the plan are free from taxation under Section 10(10D). There is no maximum limit on exemptions of death claims.
Surrendering, making the policy paid-up or canceling the plan
Paid-up Value – If the policyholder has paid the first two years’ premiums and future premiums have not been paid, the policy becomes a paid-up policy. The Basic Sum Assured under the plan is reduced in proportion to the number of premiums paid against the total number of premiums payable. Future bonuses are not added and on death or maturity, the reduced Sum Assured along with the vested bonuses is paid.
Surrender Value - If the policyholder wants, he can surrender his policy and avail the Surrender Value. The policy acquires a Surrender Value only if the first two years’ premiums have been paid. Higher of the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV) is paid on surrendering the plan. GSV and SSV are calculated as follows:
SSV is declared by the company based on its performance.
Free-look Period – If the policyholder is not happy with the plan, he can cancel the policy within 15 days of the plan issuance. This period is called the free-look period. Upon cancellation, the premium paid net of any applicable expenses would be returned. Know more about the Free-Look Period in Insurance.
Exclusions in LIC Bima Ratna Plan (864)
If the insured commits suicide within 12 months of policy inception only 80% of the premium paid is refunded.
If suicide is committed within 12 months of policy revival, a higher of 80% of the premium paid or the Surrender Value is paid.
How to buy the LIC Bima Ratna Policy
This product can be currently purchased through Corporate Agents, Insurance Marketing Firms (IMF), Brokers, CPSC-SPV, and POSP-LI engaged by these intermediaries viz. Corporate Agents, Insurance Marketing Firms (IMF), and Brokers.
Documents required for buying the LIC Bima Ratna Policy
To buy LIC Bima Ratna Plan, one has to submit the following documents:
Plan Proposal Form duly filled in and signed
Cheque or cash for the first premium
A passport-sized photograph
A valid Identity Proof
A valid Address Proof
Date of Birth Proof
Vaccination certificate
How to make a claim in LIC Bima Ratna Policy
How to make a maturity or surrender claim?
A maturity claim is easy to make. The policyholder would have to fill and sign the claim discharge form and submit it to the insurer for availing of the maturity benefit along with the original policy document, NEFT Mandate Form, and age proof if age was not admitted earlier.
In case of surrender, the policyholder should inform the company in writing to avail the surrender value.
The maturity or surrender amount can be either claimed in a lump sum or in installments of 5, 10, or 15 years. For this, you just need to inform the company 3 months prior to the maturity date.
How to make a death claim?
In case of a death claim, the nominee should fill up the claim discharge form and submit it to the company along with -
Original policy document
NEFT Mandate Form for the direct settlement of claim into the nominee’s bank account
Proof of Title which is the nominee’s Identity Proof
Proof of Death - death certificate
Medical treatments availed prior to death
Proof of age if age was not admitted in the policy
Police inquest report, newspaper cuttings reporting the accident, copy of driving license for road accidents, post-mortem report, etc. might be required in case of accidental or unnatural death.
FAQs on LIC Bima Ratna Policy
What type of bonus is declared under the policy?
The plan pays Guaranteed Additions i.e. a fixed amount of bonus is added to the sum assured every year.
Are riders available under the plan?
You have the choice of taking the following rider by paying an extra premium amount:
LIC’s Accidental Death and Disability Benefit Rider (UIN: 512B209V02)
LIC’s Accident Benefit Rider (UIN:512B203V03)
LIC’s New Term Assurance Rider (UIN: 512B210V01)
LIC’s New Critical Illness Benefit Rider (UIN: 512A212V02)
Yes, policyholders can avail of a loan under the plan if they have paid at least the first 2 years’ premiums and the plan has acquired a Surrender Value.
How much is the revival period?
You can revive your lapsed policy within 5 years of the last paid premium
