LIC Bima Plus Review
Introduction on LIC Bima Plus Plan
Introduced on – 02/02/2001 WithDrawn on – 16/10/2005
Bima plus is an ulip plan
LIC BIma Plus is an Unit linked Insurance Plan. It has been developed in view to bring down the interest Guarantee under Insurance contracts, which are of long duration in nature.
Under Bima plus plan the benefit payable to the policyholder are directly linked to the value of the units in his fund unit account. Sum Assured is a separate death Benefit (Not Maturity) for which mortality charge is deducted. The fund unit account is built up by creating units out of major portion of the premiums received. A small portion of the premium is deducted towards certain charges like mortality, Accident Benefit, Level expenses charges (commission + Administrative ). Balance amount is utilized to purchase unit in policyholders’ unit fund account. The value of the units allotted to the fund unit account may increase / Decrease depending on the investments return on Assets representing the fund. The No. of units allotted to policyholders Fund unit account will decrease, when some units are cancelled to recover certain charges.
Age at Entry
: Minimum 12 years (Last Birth Day)
: Maximum 55 years (Next Birth Day)
Mode of premium payment : yearly, half-yearly & Single
Minimum Sum Assured for yearly and half yearly mode : 50,000/-
Minimum Sum Assured for Single mode : 20,000/-
Maximum Sum Assured for all types of modes : 10,00,000/- (Yearly,Half yearly & Single)
Policy term : Bima Plus plan will have a term of 10 years only
As per CO/Act/1966/4 dtd 27.8.2004, policyholder will be given choice to decide the quantum of Sum Assured out of single premium.
Bima Plus Plan Benefits
1) Fully Paid Up / Inforce Policy : On, survival upto date of maturity, provided premiums for all 10 years of policy have been paid, then on Date of Maturity, claim will be settled as follows:
1) Bid value of units of the policy holder’s unit account as prevailing on the date +
2) 5 % of Sum Assured will be paid as Bonus.
2) Paid Up Policy : If policy is in paid up condition as on date of maturity, then only Bid value of units of policyholder’s unit account as per Rate prevailing on Date of Maturity is payable.
Bonus of 5 % of Sum Assured is not payable. Before making payment, kindly confirm that Lapsation charge on every policy anniversary is deducted by way of cancellation of units & such units are deducted from policyholders’ unit account.
Inforce policy : Policy will be treated as inforce where Death of Life Assured takes place before Due date of Next Renewal premium or within 30 days ( i.e. days of Grace) From the due date of premium. Kindly note that Basic or Extended claim concession is not available under this policy.
1. If death occurs during First 6 months from the date of commencement, claim amount will be 30 % of the Sum Assured + Bid Value of units of the policyholders’ unit account as per Rate prevailing on the date of Death intimation.
2. In case of death after completion of 1 year from the date of commencement, claim amount will be – Full amount of Sum Assured + Bid value of units of the policyholders’.
3. If the Life Assured expires in the 10th year after payment of all the premiums under the policy, a Bonus @ 5 % of Sum Assured will also be payable.
4. In case, if policyholder commits suicide after commencement of policy but before expiry of 1 year from DOC, No Basic Sum Assured is payable, but Bid Value of units of policyholders’ unit account as on date of death is payable sub to deduction of the penalty for premature surrender.
Paid Up Policy : If Death of Life Assured takes place after expiry of days of Grace, then policy will become paid up, claim amount will be Bid Value of units of policyholders’ unit account as per Rate prevailing on Date of receipt of intimation death.
No paid up Sum Assured is payable Nor Bonus is payable Accident Benefit is also Not payable. Before making payment, kindly confirm whether Lapsation charge by way of cancelling unit has been deducted. No claim investigation is necessary.
LIC Bima Plus plan Features
1) INVESTMENT FUND TYPE:
The premium allocated to purchase units will be invested according to the investment pattern prescribed for different fund type
1) secured fund 2) Balanced fund 3) Risk fund.
|Type of Fund||Equity||Debt + Equity||Liquid|
|Secured||At least 10%||At least 80%||Not more than 20%|
|Balanced||At least 30%||At least 80%||Not more than 20%|
|Risk||At least 50%||At least 75%||Not more than 25%|
2) SWITCHING OVER OF FUND:
After selecting one type of fund at proposal stage, policyholder can switch over of funds from one Fund to another fund. This allowed only twice during the term of policy subject to a minimum gap of two years. The cost of switching over will be 2% of the current bid value of the policyholders’ existing unit fund.
On Receipt of the policyholders application for a switch, the bid value of units to the credit of his policy at the time of switch, after deducting 2% of such bid value shall be transferred to the New fund selected by the policyholder & shall be utilized to allocate the fund units at the offer price of the switched fund as on date of switching over.
3) Top up premium
|Top-up single premium||Additional premium|
|Top-up single premium is payableunder single premium policy only||1. Additional premium is payable under Regular premium & single premium policies(both).|
|Top up premium will be paid at proposal stage only||Additional premium is payable atany Number of time during Term ofpolicy.|
|Top-up premium can be an unlimited amount. Amount of maximum up to the sum||Additional premium can be an Amount of maximum up to the sum Assured of the policy.|
The various types of charges in Bima plus plan are :-
1.MORTALITY(LIFE COVER) CHARGE:
Age specific cost of mortality is deducted from the premium. This is charged on level Basis throughout the original term of the plan. The mortality cost for each age for S.A. of Rs.50,000 is given in “Ann. A”.
In case of single premium, level mortality charge for the first year will be deducted from the single premium. For subsequent years level mortality charge will be recovered by canceling units of equivalent value at Bid price prevailing on the Date of policy anniversary. However, Excess of single premium paid over 10 Lakh, No mortality charge will be deducted(CO/Act/PD dt. 22.3.2004). Under yearly & Half-yearly mode of payment, at every Renewal Premium date, this level mortality charge will be recovered from premium paid & Balance amount of payment.
2) ACCIDENT BENEFIT CHARGE
Double Accident Benefit ( Not PDB 0r EPDB) cover will be available on First 2 Lakhs Sum Assured held under this plan. For yearly premium, 50 paise per thousand Sum Assured & For Half-yearly premium, 25 paise per thousand sum Assured will be recovered from premium paid.
In case of single premium, Accident cover charge @ 50 paise per thousand upto 2 Lakh Sum Assured will be recovered from single premium.
3) POLICY ADMINISTRATION CHARGES
Expense Charge (Commission & Administrative Charges) as given in Ann. “ B ” for different Sum Assured will be deducted out of premium before allocation of fund unit. These are charged on level Basis throughout the term of the plan.
In case of single premium, this expense for the first year will be recovered out of single premium. For subsequent years expense charge will be recovered by cancelling units of equivalent value on every policy anniversary at Bid value Under yearly & Half yearly mode, for additional premium paid, No administrative charge will be recovered.
In case of single premium, premium (single) paid in excess of Rs.10 Lakh. No administrative expenses will be deducted,but only deduction towards commission & Dev.officers credit @ 1.5% of premium paid will be deducted. As per CO/Act/PD dt. 22.3.2004, the charge will be deducted proportionately based on the charges provided for 10,00,000.
4) Fund Management Charge : 1% of the Fund per annum will be debited to the fund for fund management charges. These charges will be applied on weekly/Bi-weekly. This charge is not deducted again from any premium amount.
DAYS OF GRACE: Days of Grace under this plan is 30 days only. If premium is not paid within days of Grace, policy will lapse & Insurance cover for Life & Accident Benefit will not be available to the policyholder.
The dates of payment of Renewal premium depend upon the date of commencement & mode of payment. Under Half-yearly mode policies, where DOC is 31st March, 31st May, 29th,30th,31st August, 31st October & 31st December, Due date of Renewal premium after 6 months is to be taken as the last day of the month.
REVIVAL OF POLICY: If policy is not revived, then an expense charge of Rs.100/- p.a. will be charged for yearly mode of payment policy on the date of Lapsation (i.e. Due date of premium instalment) by canceling appropriate No. of units depending upon the bid price current as on that date i.e. due date of premium & on every policy anniversary thereafter till policy is revived. (see example)
For Half-yearly mode of policy Rs.50/- will be charged by canceling units as above on the date of lapsation, if FUP month does not co-incide with DOC month. If it co-incide, Rs.100/- will be charged on lapsation & Rs.100/- thereafter on every subsequent policy anniversary; so long as the policy is in lapsed condition. A letter should be addressed to the policyholder as par Ann.
A lapsed policy may be revived within 1 year from the due date of the First unpaid premium, on payment of upto date arrears of premium (without any interest) & on submission of DGH.
No loan facility is available under this plan.
Nomination / Assignment Nomination / Assignment facility is available as per our current rules. The policy can be assigned as collateral security against Housing Loan.
Premature Surrender : A Bima Plus policy can be surrendered after completion of 1 year from the date of commencement On such surrender the Bid value of the policyholders’ unit account as on date of surrender will be payable to policyholder/Assignee sub to deduction of charges ( A/c code 702651 ) as per Table
Bima Plus – Single premium As per CO/Act/2008 dt. 29.3.2005 special surrender value within 1 year of policy is also allowed. SSV will be 70% of Bid value of units held on the date of surrender.