LIC Bima Diamond

LIC Bima Diamond plan is more or less a money-back plan with limited premium payment tenure offering attractive benefits. It’s also a non-linked policy that offers a range of benefits. The policy can also be surrendered, assigned, or nominated to a beneficiary. The policyholder can even take a loan against the policy under specified conditions being met.

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The article covers in detail the eligibility criteria, benefits, standard exclusions and other features of this plan.

Eligibility Criteria of LIC Bima Diamond Plan

For purchasing the LIC Bima Diamond policy, an individual has to be a bonafide citizen of India as per the Citizenship Act of 1955. The following are the other criteria for purchasing the plan:

Sl.no

Particulars

Minima

Maxima

1

Sum assured

1 Lakh

5 Lakh

2

Policy tenure

16 years

20 years

24 years

3

Entry Age

14 years

16 years

20 years

24 years

50 years

45 years

41 years

4

Maturity Age

NA

16 years

20 years

24 years

60 years

65 years

5

Premium Payment Term

16 years

20 years

24 years

10 years

12 years

15 years

Core Benefits of LIC Bima Diamond

The following benefits are provided by the LIC Bima Diamond Policy:

Death Benefit

In case of the death of the policyholder within five years of taking the policy, the nominee(s) of the insured will be paid the sum assured on death, i.e. is the highest among either ten times the Annual Premium or the Maturity Sum Assured or Basic Sum Assured.

If the policyholder dies after five years but before the maturity period, the nominee(s) of the policyholder is/are entitled to receive the Death Sum Assured plus any applicable loyalty additions.

Nonetheless, the death benefit payable will never be less than 105% of the total premiums hitherto paid that excludes any additional premium paid including that of rider(s) opted for (if any).

However, if the death of the insured occurs in the extended cover period, i.e. equivalent to 50% of the policy tenure after the completion of the policy tenure; a sum equivalent to half the basic sum assured will be paid.

Survival Benefit

A fixed proportion of the Basic Sum Assured will be payable if the insured completes the policy tenure.

  • If the policy tenure is 16 years, 15% of the sum assured at the end of the 4th, 8th and 12th policy years shall be paid.
  • If the policy tenure is 20 years, 15% of the sum assured at the end of the 4th, 8th and 12th and 16th policy years shall be paid.
  • If the policy tenure is 24 years, 12% of the sum assured at the end of 4th, 8th and 12th, 16th and 20th policy years shall be paid.

Maturity Benefit

The sum assured on maturity shall be payable along with loyalty addition, if applicable; if the policyholder completes the policy tenure. The sum assured on maturity shall be 55% of the basic sum assured if the policy tenure is of sixteen years and 40% of the basic sum assured if the policy tenure is of twenty or twenty-four years.

Rider Benefits

The LIC Bima Diamond Policy shall offer two optional rider benefits to the policyholder viz. Accidental Death and Disability benefit and LIC’s New Term Assurance Rider.

LIC’s Accidental Death and Disability Benefit

This rider shall be made available to the policyholder on payment of an additional premium amount. However, this rider will be available only after the policy year coinciding or falling after the policyholder completes eighteen years of age provided the insured is a minor.

The policyholder can choose this rider any time within the premium paying tenure provided s/he has at least five premium paying years before completing the premium payment tenure. These riders shall be available till the end of the policy tenure.

LIC’s New Term Assurance Rider

This rider shall come at an additional premium that is to be simultaneously paid with the base premium and premium for other riders opted for if any. The maximum cover amount that can be opted is Rs. 25 Lakh and on the hapless demise of the insured, the LIC shall pay the sum assured under this rider along with the basic sum assured under the base plan.

Loyalty Addition

The LIC Bima Diamond Plan shall be eligible for participating in the profits of the LIC after five years of completing the policy tenure in the form of death or maturity.

Tax Benefits

The LIC Bima Diamond Policy is eligible for tax concession in line with Sec. 80(C) of the Income Tax Act of 1961 and Sec. 10(10D) of the same act.  (*Tax benefit is subject to changes in tax laws.)

LIC Bima Diamond Premium Structure

The policyholder is bound to pay the base plan premium along with the premium of the riders opted if any on the due date. The premiums can be paid monthly, quarterly, bi-annually or annually.  A 15-days’ grace period from the due date shall be provided for monthly payments and a 30-days’ grace period shall be provided for annually, bi-annually and quarterly modes of premium payment.

In case the hapless demise of the insured takes place within the grace period, the full benefits entitled to the nominee(s) shall be payable after deducting the unpaid premium. Also, the balance premium that falls due from the date of death till the nearest upcoming policy anniversary shall be deducted from the basic sum assured.  

Auto Cover Period

If premiums for three consecutive years but not more than five consecutive years have been paid and the subsequent premiums were not paid, an auto cover period of six months starting from the first unpaid premium due date shall be conferred on the policyholder. Also, if the premiums for more than 5 consecutive years were accordingly paid, an auto cover period of two years shall be provided.

In case the hapless demise of the insured occurs in the auto cover period, the assured benefit will be paid after deducting the due premiums and balance premium amount, if any, till the nearest upcoming policy anniversary. However, survival benefit will only be paid if the policy is in force.

However, if the hapless demise of the insured occurs after the auto-cover period, the sum assured shall be calculated as:

If the maturity period is attained in the above said period, the maturity benefit is calculated as:

Where:

  • S- Sum Assured on Maturity
  • T- Total Survival Benefits Payable
  • P= Survival Benefits Already Paid

Also, the extended policy cover shall not apply to such paid-up policies and such policies are not entitled to participate in profits. In addition to that, the riders shall lapse if the base policy is in lapsed mode.

Documents Required

Anyone who wants to purchase the LIC Bima Diamond policy needs to give the following documents:

Age proof, income proof, address proof, like PAN card, AADHAAR card, Driving License, Passport copy, utility bills, etc. have to be provided. Besides this, 2 recent passport size photographs and any medical documents if asked by the insurer have to also be provided.

The process to buy LIC Bima Diamond Online

One needs to follow the steps below in order to buy LIC Bima Diamond policy online:

Step 1:Customers can access the LIC India official website to buy LIC Bima Diamond Plan.

Step 2:Find “Apply Now” in the policy section.

Step 3:It opens a data form and the user has to fill in personal details in it. This includes his name, address, city, pin code, DOB, age, and contact details like dependents, and family income.

Step 4:They can click “Submit” after authorizing LIC representatives to contact them.

Step 5:One of the LIC representatives will contact them to assist them with the plan purchase.

Key Exclusions

The full benefit under the LIC Bima Diamond plan may not be claimed if:

  • The policy lapses
  • The policyholder purposefully conceal any relevant information about him/her at the time of signing the policy document
  • If the policyholder commits suicide within twelve months from the date of signing the policy or date of policy revival.

*For a detailed list of exclusions, please refer to the policy document or the product brochure

LIC Bima Diamond - FAQs

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

*The investment risk in the investment portfolio is borne by the policyholder.

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

Written By: PolicyBazaar - Updated: 24 August 2021
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