A Review of LIC Bima Diamond – The New Money Back Plan from LIC

Life Insurance Corporation of India completes its 60th anniversary in 2016 and to celebrate the "Diamond Jubilee Year", the company has launched a brand new life insurance product- Bima Diamond Plan. This is a non-linked, traditional money-back policy available for purchase only from 19th September 2016 to 31st August 2017.  This plan allows the policyholder to receive guaranteed payouts, on the completion of every 4 years.

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This plan comes with the triple benefits of enhanced protection, money back, and auto cover features. The plan is best suited for those who are looking for a short-term investment that provides guaranteed returns in periodic installments.

Here, let’s give you a detailed description of LIC’s Bima Diamond Plan.

Key Features of LIC Bima Diamond

Enhanced Protection- The plan offers an extended cover period for half of the policy tenure after the completion of the policy tenure.

Money-Back- A certain amount of sum is paid out as the survival benefits on the completion of every 4th policy year.

Auto Cover Feature- If a premium is not duly paid for 5 full policy years, an auto cover period of 2 years is available.

Premium Paying Term- The policyholder has an option of three premium paying terms to choose from.

  • Option 1: If the policy tenure is 16 years and the term of premium payment is 10 years, 

  • Option 2: If the policy tenure is 20 years, then the insured person will have to choose a premium paying term of 12 years.

  • Option 3: In the case of 24 years of the policy term, the premium paying term of the policy will be of 15 years.

Sum Assured- The minimum basic sum assured provided by the policy is Rs.1,00,000 and the maximum basic sum assured offered by the policy is Rs.5,00,000.    

Entry Age- The minimum entry age of the policy is 14 years. 

Benefits offered by LIC Bima Damond

Besides these features, a plethora of benefits is also offered by the plan. The benefits of the LIC Bima Damond plan are as follows:

Death Benefit- In case of demise of the life insured during the first 5 years of the policy, a sum assured amount as a death benefit is payable to the beneficiary of the policy. If the death occurs after the completion of 5 policy years, but before the completion of policy tenure or before the maturity date of the policy, then the sum assured amount along with the loyalty addition is payable to the nominee of the policy.

Either 10 times of the annualized premium or absolute amount assured to be paid on death or the sum assured on maturity whichever is higher is defined as the sum assured amount as a death benefit.

In case if the policyholder dies during the extended cover period, an amount equal to 50% of the basic sum assured is payable to the beneficiary of the policy.

Survival Benefit- If the insured person survives till the end of each specific time, during the tenure of the policy, and pays the entire premium, a fixed percentage of the basic sum assured is paid out for various policy terms.

  • For the policy tenure of 16 years, 15 % of the basic sum assured is paid at the end of the 4th, 8th, and 12th policy year.

  • For the policy tenure of 20 years, 15 % of the basic sum assured at the end of the 4th, 8th, 12th, and 16th policy year.

  • For the policy tenure of 24 years, 12% of the basic sum-assured after the 4th, 8th, 12th, 16th, and 20th policy year.

Maturity Benefit- If the insured person survives till the end of the policy tenure and has duly paid all the premiums then a sum assured on maturity along with the loyalty addition is payable to the policyholder. The sum assured on maturity is 55% of the basic sum assured for the policy tenure of 16 years and 40% of the basic sum assured for a policy tenure of 20 and 24 years.

Loyalty Addition- The policy provides profit in form of loyalty addition if the insured person has duly paid all the premiums till the date of demise or maturity. Loyalty addition is either paid on the demise of the policyholder after completion of the 5th policy year or on the maturity of the policy.

Rider Benefits:  

The plan also proves optional rider benefits, which are as follows:

  • LIC Accidental Death Benefit and Disability Rider

  • LIC New Term Insurance Rider

Besides these, one can also avail of income tax benefits on the premium paid and the maturity benefits received under sections 80C and 10(10D) of the Income Tax Act.

For the better understanding of our readers, we have highlighted the eligibility criteria in a tabular format:

  Minimum Maximum
Sum Assured Rs1,00,000 Rs5,00,000
Tenure of Policy 16, 20 and 24
Tenure of Premium Payment 10 (for 16), 12(for 20) and 15(for 24)
Entry Age 14 50
Age of Maturity - 66 (for Policy Term=16) 65 (for Policy Term=20) 65 (for policy Term=24)
Payment frequency Yearly, half-yearly, quarterly, and monthly

This plan is beneficial for those who want a short-term investment along with a money-back facility. However, according to your own needs and affordability, you can compare different life insurance plans online and choose the one that suits you best.

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