LIC Bima Diamond

Summary of LIC Bima Diamond Plan – Table No. 841

LIC Bima Diamond Plan is a money back policy which provides life cover for a period greater than the policy term. It is a participating, non-linked policy that offers guaranteed payouts and a Final Addition Bonus.

Bima Diamond Plan is available for purchase only till 31st August, 2017 coinciding with the Diamond Jubilee Celebrations of LIC.

Death Benefit

Maturity Benefit

Income Tax Benefit

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Key Features

Money Back Plan with tenure of 16, 20 & 24 years

Regular payouts are made every 4 years depending on the policy term

Final Addition Bonus to be paid at the end of the policy term

Option of selecting 2 Riders along with the plan

Benefits

Death Benefit

In case of death of the Life Insured within the Policy Tenure, the Nominee would be paid the higher of the following:

Basic Sum Assured
10 times the Annualized Premium

In case of Death of the policyholder after 5 policy years, the nominee will be paid Final Addition Bonus also. The Death Benefit will always be a minimum of 105% of all Premiums paid.

Extended Cover Period

The policyholder will continue to enjoy a life cover even after the expiry of the policy term. The extended cover period will be half the policy term. The Death Benefit in the extended cover period is 50% of the Basic Sum Assured.

So if a customer has taken a 1 lakh cover for 20 years, a Rs. 50,000 cover would be available for 10 years after the completion of the policy term of 20 years.

Survival Benefit

On survival, the policyholder will get the following:

For plans with term of 16 years - 15% of Basic Sum Assured at the end of each of 4th, 8th and 12th policy year
For plans with term of 20 years - 15% of Basic Sum Assured at the end of each of 4th, 8th, 12th and 16th policy year
For plans with term of 24 years - 12% of Basic Sum Assured at the end of each of 4th, 8th, 12th, 16th and 20th policy year

The policy continues till the end of the Policy Term.

Maturity Benefit

On survival till the end of the policy term, the policyholder will get the following payouts:

55% of Basic Sum Assured for policy term 16 years
40% of Basic Sum Assured for policy terms 20 and 24 years

Income Tax Benefit

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.

How it works

Let us understand this plan better with the help of an example.

Suppose Shankar buys this plan with the following parameters:

Age - 30 years

Basic Sum Assured - Rs. 1,00,000

Policy Term = 16 years

So the Annual premium will be Rs. would be Rs. 8,712 + Taxes. The policy term would be 16 years and she will have to pay premiums for 10 years. He would enjoy a cover for an extended period of 8 years after the policy term.

Scenario 1 - Shankar dies after 3 years of buying the plan.

Since Shankar died within 5 years of buying the plan, the Death Benefit paid to the nominee would be the higher of the following:.

Basic Sum Assured = Rs. 1,00,000 = Rs. 1,00,000
10 times the Annual Premium = 10 x Rs. 8,712 = Rs. 87,120

So the nominee will get Rs. 1,00,000 as Death Benefit.

The policy terminates.

Scenario 2 - Shankar dies after paying premiums for 7 years.

Shankar would be eligible to receive the 1st tranche of Survival Benefit and nominee would receive the Death Benefit.

Survival Benefit = 15% of Basic Sum Assured after 4 years = 15% of Rs. 1,00,000 = Rs. 15,000.

Death Benefit - Nominee gets higher of the following:

Basic Sum Assured = Rs. 1,00,000 = Rs. 1,00,000
10 times the Annual Premium = 10 x Rs. 8,712 = Rs. 87,120

So Parvati would have received Rs. 20,000 after 5 years and his nominee will Rs. 1,00,000 + Final Addition Bonus on his death. The amount of Final Addition Bonus can only be known when it is declared.

The policy terminates.

Scenario 3 - Shankar dies after paying premiums for 11 years.

Shankar would be eligible to receive the 1st & 2nd tranches of Survival Benefit. In addition, his nominee will receive the Death Benefit.

Survival Benefit -

15% of Basic Sum Assured after 4 years = 15% of Rs. 1,00,000 = Rs. 15,000
15% of Basic Sum Assured after 8 years = 15% of Rs. 1,00,000 = Rs. 15,000.

Death Benefit - his nominee gets higher of the following:

Basic Sum Assured = Rs. 1,00,000 = Rs. 1,00,000
10 times the Annual Premium = 10 x Rs. 8,712 = Rs. 87,120

So Shankai would have received Rs. 15,000 each after the 4th year and 8th year and his nominee will Rs. 1,00,000 + Final Addition Bonus on his death. The amount of Final Addition Bonus can only be known when it is declared.

The policy terminates.

Scenario 4 - Shankar dies after paying premiums for 15 years.

Shankar would be eligible to receive the 1st, 2nd & 3rd tranches of Survival Benefit. In addition, his nominee will receive the Death Benefit.

Survival Benefit -

15% of Basic Sum Assured after 4 years = 15% of Rs. 1,00,000 = Rs. 15,000
15% of Basic Sum Assured after 8 years = 15% of Rs. 1,00,000 = Rs. 15,000
15% of Basic Sum Assured after 12 years = 15% of Rs. 1,00,000 = Rs. 15,000

Death Benefit - his nominee gets higher of the following:

Basic Sum Assured = Rs. 1,00,000 = Rs. 1,00,000
10 times the Annual Premium = 10 x Rs. 8,712 = Rs. 87,120

So Shankai would have received Rs. 15,000 each after the 4th year, 8th and 12th year and his nominee will Rs. 1,00,000 + Final Addition Bonus on his death. The amount of Final Addition Bonus can only be known when it is declared.

The policy terminates.

Scenario 5 - Shankar survives the policy term of 16 years.

Shankar will get the Survival Benefits and the Maturity Benefits.

Survival Benefit -

15% of Basic Sum Assured after 4 years = 15% of Rs. 1,00,000 = Rs. 15,000
15% of Basic Sum Assured after 8 years = 15% of Rs. 1,00,000 = Rs. 15,000
15% of Basic Sum Assured after 12 years = 15% of Rs. 1,00,000 = Rs. 15,000

Maturity Benefit = 55% of Basic Sum Assured + Final Addition Bonus = Rs. 55,000 + Final Addition Bonus.

He will continue to enjoy a life cover of half the Basic Sum Assured (Rs. 50,000) for a period of 8 years after the completion of the policy.

Eligibility

	Minimum		Maximum
Sum Assured	Rs. 1,00,000		Rs. 5,00,000
Policy Term	16 years	20 years	24 years
Premium Payment Term	10 years	12 years	15 years
Entry Age	14 years		50 years for a term of 16 years 45 years for a term of 20 years 41 years for a term of 24 years
Max age at Maturity	66 years for a term of 16 years 65 years for a term of 20 & 24 years

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