LIC Bima Bachat Plan

LIC’s New Bima Bachat Plan is a Single Premium Participating Anticipated Endowment Plan. Thus, LIC Bima Bachat is a traditional money back plan with scheduled payments along with return of single premium paid plus loyalty additions at the end of the policy tenure.

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Key Features LIC Bima Bachat

  • LIC Bima Bachat is a Single Premium Plan of LIC Endowment & Saving Traditional plans.
  • LIC Bima Bachat is a Simple money back plan with bonus option
  • LIC Bima Bachat can be taken for a period of 9 years, 12 years or 15 years
  • Under LIC Bima Bachat, if the Life Insured is alive at the end of every 3 years, 15% of the Basic Sum Assured is paid as Survival Benefit and the policy continues
  • Under LIC Bima Bachat, on survival till the end of the policy tenure, the entire Single Premium paid along with Loyalty Addition would be paid to the policyholder as Maturity Benefit and the policy terminates
  • Under LIC Bima Bachat plan, if the life insured dies within the policy tenure, the entire Sum Assured + Loyalty Addition would be paid to the nominee as Death Benefit<

Benefits of LIC Bima Bachat

Loyalty addition: LIC Bima Bachat policy declares loyalty addition after the policy has completed a tenure of 5 years.

Survival Benefit: Under LIC Bima Bachat plan, on survival, 15% of the Sum Assured is paid to the policyholder as Survival Benefit and the policy continues:

For Policy Tenure of 9 years

    • Payable at the end of the 3rd Policy Year
    • Payable at the end of the 6th Policy Year

For Policy Tenure of 12 years

    • Payable at the end of the 3rd Policy Year
    • Payable at the end of the 6th Policy Year
    • Payable at the end of the 9th Policy Year

For Policy Tenure of 15 years

    • Payable at the end of the 3rd Policy Year
    • Payable at the end of the 6th Policy Year
    • Payable at the end of the 9th Policy Year
    • Payable at the end of the 12th Policy Year

Maturity Benefit: Under LIC Bima Bachat, on survival till the end of the policy tenure, the Single Premium paid + Loyalty Addition would be paid to the policyholder as Maturity Benefit.

Death Benefit: If the Life Insured dies within the policy tenure under LIC Bima Bachat:

    • Only Sum Assured would be paid if the Life Insured dies within the first 5 policy years of the LIC Bima Bachat plan
    • After completion of 5 years of LIC Bima Bachat, the Sum Assured along with Loyalty Addition, if any would be paid as Death Benefit
    • There is high sum assured discount available under LIC Bima Bachat plan
    • Income tax benefit on the premium paid under LIC Bima Bachat as per Section 80C and on the claims received as per Section 10(10D) of the Income Tax Act.

Product Specification:




Entry Age (Last Birthday)

15 years

66 years for PT = 9
63 years for PT = 12
60 years for PT = 15

Maturity Age (Last Birthday)


75 years

Policy Term (PT) in years

9, 12 and 15 years

Premium Paying Term (PPT) in years


Premium Paying Frequency


Sum Assured

Rs 35,000 for PT = 9
Rs 50,000 for PT = 12
Rs 70,000 for PT = 15

No Limit


LIC Bima Bachat Premium Details 

The annual premium is mentioned in Rupees for a Sum Assured of 1 Lac under LIC Bima Bachat plan. Basic Premium is mentioned below (Tax not included).



9 Years Policy

12 Years Policy

15 Years Policy

30 Years




40 Years




50 Years





Policy Details

Grace Period: Not applicable under LIC Bima Bachat as there is no need for further premium payment.

Policy Termination or Surrender Benefit: The Surrender Benefit is available under LIC Bima Bachat plan:

  • Within the first year of LIC Bima Bachat: 70% of the Single premium paid excluding taxes and extra premium, if any
  • Under LIC Bima Bachat, from the 2nd year onwards, 90% of the Single premium paid excluding taxes, extra premium, if any and all survival benefits paid earlier.

Free Look Period: If you are not pleased with the coverage, and terms and conditions of LIC Bima Bachat policy, you have the option of cancelling LIC Bima Bachat policy within 15 days of receipt of the LIC Bima Bachat policy documents, provided there has been no claim.


Loan is available in LIC Bima Bachat, upto 60% of the surrender value.


Under LIC Bima Bachat, in case suicide is committed within 12 months of policy inception, only 90% of the single premium paid is returned to the nominee.

Documents Required

For LIC Bima Bachat policy, the policyholder has to fill up an ‘Application form/ proposal form’ with accurate medical history along with the address proof and other KYC documents. Medical examination may be required in some cases, based on the sum assured and the age of the person under LIC Bima Bachat.

Advantages of a Money Back Policy

A money back plan is one of the best types of life insurance policy available in the market. Besides offering insurance and investment, a money back plan offers guaranteed returns by way of redemption of money at regular intervals with a low degree of risk. Such a plan is ideal for people who require money at different stages in their life to meet fixed long and short-term financial needs such as buying a car and/or house, international vacations, paying for health expenses, school fees, etc.

Unlike traditional endowment plans where survival benefits are payable only at the end of the endowment period, a money back plan offers periodic payments of partial survival benefits during the tenure of the policy as long as the policyholder is alive. 

Key Advantages of a Money Back Policy:

Insurance Cover as well as Investment Returns

A money back plan is ideal for risk averse individuals as it provides them with a life insurance cover in addition to significant guaranteed returns (investment returns). In fact a money back plan offers several advantages – maturity benefit, survival benefit, insurance cover and bonus, resulting in significant overall payouts.

All other investment plans pale in comparison to the advantages of a money back plan. Most give returns only at the end of the policy tenure, while some give returns over the lifetime of the policy, but none of them match up to the advantages offered by money back plans. A money back plan provides an insurance cover, regular income, tax benefits and bonuses.  

Helps Plan Course of Life with Regular Payouts

Every individual has a set of dreams and aspirations for important stages in life. These can be fulfilled only if one has required amount of money to make these dreams reality.

A money back plan helps a person to chart the course of his or her life with a sum that is expected at regular intervals. With regular income through a money back plan, one can be sure that the dreams will see the light of the day without compromising one’s day to day responsibilities. Whether it is paying for child’s education, buying a car or any other important expense, it can be executed smoothly with the help of this policy. A money back plan helps meet intermittent liquidity requirements at important stages of life.


Returns Begin to Accrue After Few Years

Unlike most insurance products which pay benefits only at the time of maturity of the plan, a money back insurance plan starts giving returns after a few years of investment.

In case of long term policies, an amount is paid every few years (survival benefit) and the remaining on maturity. This amount totals to significant amount and can be utilised towards short or long term purchases.

The final payout given at the time of maturity with the maturity amount is larger than previous payouts. Survival benefit is paid only if the policyholder is alive. In case of passing away of the insured party, survival benefits do not accrue and the nominee/beneficiary only receive the sum assured plus any loyalty bonus amount. 

Policyholder Receives Full Sum Assured on Maturity

Under a money back insurance plan, the policyholder receives the full sum assured amount at the time of maturity, irrespective of the survival benefits received earlier.

A money back plan pays more than just the maturity amount. The insured receives periodic survival benefits over the term of the policy. And he/she stands a chance to receive a bonus by way of loyalty addition at the end of the plan period, part of the maturity benefit. 

Time Value of Money Higher with a Money Back Policy

The principle of time value of money states that the value of money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

This is why a money back plan scores over other kinds of life insurance plans. Survival benefits which are paid periodically over the policy tenure are worth more than if they were paid at the end of the policy term. 

Helps Counter Volatility Arising from Market Linked Investments

The very nature of returns from market linked investments is unpredictable because of the volatile nature of markets. Money back plans help safeguard against losses arising from other forms of investment due to the guaranteed nature of its returns.

It is advisable to have a money back plan as part of one’s portfolio even if one relies heavily on market-linked instruments. In addition to definite returns, a money back plan offers a life insurance cover. The periodic survival benefit amount can be used to take care of expenses at different stages in life or even to make investments. 

Bonus at Maturity Increases Overall Payout

The policyholder receives 2 kinds of bonuses under a money back plan, both of which significantly increase the overall payout.

The first is a reversionary bonus, declared at the end of each year by the life insurance company for its policies and added to the total sum payable to the insured at maturity. The bonus is declared as a percentage of the sum assured and can be of 2 types – simple revisionary bonus and compound revisionary bonus. The compound revisionary bonus for each year is added to the sum assured. It increases the sum assured amount, therefore the bonus figure for succeeding years is more as the sum assured has increased from the previous year’s amount.

The second bonus, the final additional bonus maybe given by the insurance company to the policyholder at the end of the policy tenure as a reward for loyalty. 

Tax Savings

The premium paid under a money back life insurance policy is entitled for tax deductions under section 80C of the Income Tax Act, up to the specified limit, as long as the insurance premium is less than 10% of the sum assured. This way one can reduce his/her tax liability with the help of a money back plan.

Also, the maturity amount is exempt from tax deduction at source, as long as the sum assured is more than 5 times the premium paid for the policy. 

Surrender Clause

A money back policy usually has a built in clause which allows surrendering the policy before the end of the policy term.

In such cases, the surrender value is calculated based on pre-defined formulae and paid by the insurance company to the policyholder. 

Policy Loan

Some money back policies offer a loan facility i.e. a loan can be availed against the policy during the policy term, subject to certain terms and conditions and the production of satisfactory title. 

You May Also Like to Read: Best 5 LIC Plans for the Investment in 2020

Comparison of Life Insurance Plans

  Term Plan Endowment Plan Money-Back Plan Unit-Linked Insurance Plan
Type  Pure insurance  Insurance cum investment/savings  Insurance cum investment/savings  Insurance cum investment/savings
Definition A term plan is the most basic type of life insurance which provides a life cover with no savings. An endowment plan is different from a term plan in one major aspect i.e. the presence of maturity benefit. Profits, if any, accrue as a result of premiums invested in debt and equity. A money-back plan is a variant of an endowment plan with one difference – regular payouts are staggered through the policy term at specific intervals as long as the policyholder is alive. ULIP, a variant of the traditional endowment plan, gives greater control to the policyholder with respect to where the premium can be invested. Combining insurance and investment, a portion of the premium goes towards providing a life cover, whereas the remaining is invested in equity and debt.
Maturity/Death In case the policyholder dies during the policy term, his/her nominee receives the sum assured. If the policyholder survives the term, there is no pay out and one loses the yearly premiums paid. Endowment plans pay out the sum assured in case of death as well as survival of the policyholder at the end of the policy term. The premium is higher to factor in both the scenarios. If the policyholder survives the term, he/she receives the remaining (balance) sum assured. In the event of death of the insured, the insurance company pays the full sum assured along with survival benefits to the nominee / beneficiary. In case of the policyholder's death, the nominee receives death benefit which is equal to higher of the sum assured or fund value (Type 1 ULIP). In case of Type 2 ULIP, the death benefit is equal to sum assured plus fund value.
Advantages Cheap, low risk, high return. Combines insurance and investment. Regular payouts during the policy tenure to help take care of immediate as well as long term needs. Combines insurance and investment. Assists in wealth creation by investing premium in market-linked funds. Transparent structure.
Disadvantages No payout at the end of the policy term if insured is still alive. Invests mostly in debt which yield low returns. Relatively low returns. Market volatility can diminish returns.


Written By: PolicyBazaar - Updated: 05 July 2021
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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