What Is the Loyalty Addition For Bima Bachat 175?

With LIC’s Bima Bachat insurance policy, policyholders can enjoy Loyalty Additions to the basic sum assured by making a one-time premium payment. These additional returns on maturity make this plan one of the more widely purchased insurance products of LIC.

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What Is the LIC New Bima Bachat Policy?

The LIC New Bima Bachat policy is a type of money-back insurance policy that serves as a means for additional savings while being protected under an insurance cover. It is an updated version of the previously withdrawn Bima Bachat 175. This single premium insurance plan was designed keeping in mind the need for financial security and protection for the policyholder and her/his family.

If the policyholder survives the maturity term, LIC is liable to credit the single premium amount back to him/her. Important offerings of the New Bima Bachat policy are: 

  • The death benefit in the event of the unfortunate demise of the Life Assured

  • Return of single premium plus Loyalty Additions to the base sum assured on maturity

  • Survival benefits at certain intervals

  • Loan benefit 

The following sections discuss important aspects regarding the loyalty additions for New Bima Bachat (previously known as Bima Bachat - 175) to help you understand the amount receivable on maturity and death better.  

What is the Loyalty Addition for Bima Bachat 175?

Now known as the New Bima Bachat, the plan is a fairly comprehensive insurance product offering additional capital to the policyholders. * The Loyalty Additions make this savings-cum-insurance product an even more attractive investment for new buyers. To understand it better, you should know what Loyalty Additions are. 

Loyalty Additions are a form of incentive offered by the Life Insurance Corporation of India. It is separate from the sum assured paid on maturity or death. Loyalty Additions is defined as a percentage of the basic sum assured, usually added every year until death or maturity of the policy. The extra amount is a means to keep existing policyholders and to encourage them to continue with the insurance product throughout the term or after.  

The next important question here is - how much exactly is the amount of these additions? Let’s find out. 

How Much Is the Loyalty Addition for New Bima Bachat or Bima Bachat 175?

The policy is a non-linked participating plan, meaning that it participates in the profits of the company. With the New Bima Bachat policy, policyholders are eligible to receive Loyalty Additions based on the participating profits made by LIC. The addition is made every year after the completion of the first 5 years of the policy. From the 6th year onwards, the extra amount starts accruing. The final amount is made as a one-time payment along with the sum assured under the following circumstances: 

  • In the unfortunate case of the policyholder’s death after completing 5 policy years

  • If the policyholder survives maturity

Death Benefit Illustration for New Bima Bachat with Loyalty Additions

The following benefit illustration is for a sample profile. It is intended to bring more clarity on the maturity benefit and the death benefit receivable with Loyalty Additions.

35-year-old Debbie decides to purchase the LIC New Bima Bachat policy for a policy term of 9 years at a basic sum assured of Rs.1 Lakh. The single premium amount after underwriting comes out to be Rs.72,540 for a life insurance cover of 9 years.

Please note that Loyalty Additions are non-guaranteed benefits, which solely depend on the profits made by the company. Consequently, Loyalty Additions are subject to a projected rate of return on investment earned by LIC.

Assuming that the rate of return, in this case, is 8% per annum, the policyholder receives either of the following benefits:

  • Maturity Benefit - Single premium amount plus Loyalty Additions

  • Death Benefit - Sum Assured on death plus Loyalty Additions

Policy Year Loyalty Additions (in Rs.) Maturity Benefit (in Rs.) Death Benefit (in Rs.)
1 NA NA 1,00,000
2 NA NA 1,00,000
3 NA NA 1,00,000
4 NA NA 1,00,000
5 NA NA 1,00,000
6 5,000 NA 1,05,000
7 6,000 NA 1,06,000
8 7,000 NA 1,07,000
9 10,000 82,540 1,10,000

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

“Tax benefit is subject to changes in tax laws. Standard T&C apply.”


Summing up

LIC has been an active player in the life insurance space for the longest time and continues to dominate a large market share. The New Bima Bachat policy, like any other product of LIC, comes with interesting features in line with the needs of the policyholder and their family. Specifically, the Loyalty Additions for New Bima Bachat allows you to maximize your savings and the extra amount can prove to be extremely useful in the future. This makes it a good incentive for you to pick this plan.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
++Returns are 10 years returns of Nifty 100 Index benchmark

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