The LIC Bima Diamond Plan is an mixture of protection along with savings. The plan that was launched in the honour of Diamond jubilee of the Life Insurance Corporation of India is a traditional guaranteed money back plan which is not at all dependent on the condition of the share market. It is a limited premium paying plan hence you will not have to pay the premium for the entire tenure of the policy. If the policy holder survives up till the premium paying term of the policy then the 15% money back will be provided to the life assured every 4 years and during the time of maturity, the rest 40% along with additional bonuses will be received by the policyholder. In the case of untimely death of the policyholder, the nominee will get the death benefit not just during the tenure of the policy but even during the extended cover period. Moreover, the plan also offers the benefits of auto-cover and policy loan to the policyholders.
- 1 Key Features of LIC Bima Diamond
- 2 Benefits
- 3 Eligibility Criteria and some other restrictions
- 4 LIC Bima Diamond Premium Calculator
- 5 Payment of Premiums
- 6 Revival
- 7 Loan on Policy
- 8 Cooling Off Period
- 9 Exclusion
- 10 Review of the LIC Bima Diamond Plan
Key Features of LIC Bima Diamond
- Guaranteed money back plan.
- Extended cover period even after the policy gets matured.
- It is a limited premium paying policy hence the policyholder will not have to pay the premium for the entire term of the policy.
- The policyholder will also get the benefits of term rider and accidental benefits.
- The premiums paid are not taxable under the directives of Section 80C of the Income Tax Act.
- The amount that will be obtained on the maturity of the plan is also tax-free under the policies of Section 10D of Income Tax Act.
- 2 years of auto-cover is available on a plan of at least 5 years.
- On survival, through the premium paying term of the policy, the policyholder will get 15% of the total money assured back every 4 years.
There are mainly four types of benefits that the policy offers which are:
- Death Benefits
- Survival Benefits
- Maturity Benefits
- Loyalty addition
There are two different clauses for the death benefits under the Bima Diamond policy of LIC:
In case of the sudden death of the policyholder before maturity
If the policy has not covered the 5 years term during the death of the life assured then the nominee will get only the sum assured as the death benefit. Where the sum assured can be defined as the 10 times of all the annualised premiums paid. But if the policyholder passes away after the completion of 5 years but before the maturity of the policy then the nominee will get the sum assured along with the loyalty additions.
In case of the sudden death of the policyholder during the extended cover period
In this case, the nominee will receive an amount of the 50% of the money assured.
If the policyholder survives through the specified duration of the policy then he/she will receive 15% of the total sum assured as survival benefit after every 4 years. Here one thing should be noted that for a policy of 24 years the percentage of the money back as survival benefit has been determined to be 12%.
If the life assured survives the entire duration of the policy then the maturity benefit will be paid to the policyholder. The policyholder will receive the remaining percentage of the sum assured along with the loyalty additions as the maturity benefit. The main thing that needs to be specified here is that the policyholder will receive 40% money back as the maturity benefit along with extra added bonuses for 20 or 24 years tenure but for the 16 years plan the remaining sum assured will be 55%.
If the policyholder has cleared all the premiums up to date till the death of the policyholder or maturity of the Bima Diamond plan, then the policy will be able to partake in the profits as the loyalty additions. The loyalty addition will be payable after the 5th year of the policy and it will be added to the sum assured during death or maturity of the Bima Diamond policy.
Eligibility Criteria and some other restrictions
- Minimum sum that can be assured with the Bima Diamond policy is Rs 1,00,000 whereas the maximum limitis Rs 5,00,000.
- The minimum policy term can be of 16 years whereas the maximum limit has been set for 24 years.
- As per the policy term, the premium paying term or the PPT has been set by LIC as 10 years as the minimum and 15 years as the maximum PPT.
- The minimum age for entering the policy is 14 years.
- The maximum age for entering depends upon the term of the policy. Hence, for 16 years the maximum age for entry is 50, for 20 years of policy tenure, it is 45 whereas for the 24 years of policy term the maximum age of entry is 41.
- Maximum age for maturity of the policy is 65 for 20 as well as 24 years of policy tenure whereas it is 66 for the 16 years of policy term.
- The auto cover will be in force after 2 years from the first date of unpaid premium.
LIC Bima Diamond Premium Calculator
Payment of Premiums
The premiums can be paid in a monthly (for only the ECS), half yearly and yearly fashion. Moreover, the policyholder will also be able to pay the premiums by deducting it from the salary account through SSS mode only. LIC also offers a grace period of 30 days for half-yearly and yearly payment mode whereas the grace period is 15 days for the monthly payments to prevent the policy from lapsing.
A lapsed Bima Diamond policy can be revived within 2 consecutive years from the first date of unpaid premium by paying up all the dues with interests.
The surrender option for the Bima Diamond policy will be applicable to the policyholder if the life assured has all the premiums cleared up to date for minimum three consecutive years. The surrender value, in this case, will be calculated by the LIC by following their clauses.
Loan on Policy
The policyholder will be able to avail the policy loan only if the policy has acquired the surrender value and it is subjected to the clauses of the corporation. The rate of percentage for the policy loan for the current fiscal year is 10% per annum.
Cooling Off Period
If the policyholder is not satisfied with what the policy has to offer then the life assured can opt for the cancellation of the policy at most within 15 days of receiving the policy documents.
If the policyholder commits suicide during the first 12 months of the tenure of the policy then only 80% of the premiums that have been paid till the date of death of the policyholder will be paid to the nominee. But after the first 12 months, a percentage higher than the total sum assured will be paid to the nominee.
Review of the LIC Bima Diamond Plan
It will not be appropriate to call a policy good or bad since everything depends upon the requirements of the policyholder. The return from the Bima Diamond policy is as low as 4-5% which does not suit the needs of maximum policyholders. Moreover, the tax exemption that is offered by the policy is also very less as compared to the available policies in the market. Hence, the decision has to be yours whether you actually require this money back plan.