LIC New Bima Diamond Plan – Review, Benefits & Features
Is it worth to invest in LIC Bima Diamond 841 plan
On its 60th year, Life Insurance Corporation of India (LIC) launched a new endowment plan called LIC Bima Diamond plan 841. This plan is available for public from September 19th 2016 to August 31st 2017.
Minimum sum assured = INR 1,00,000.
Maximum sum assured = INR 5,00,000.
Minimum age required = 14 years.
LIC Bima Diamond (841) is a typical traditional non-linked, Money Back plan
First let us look into the 3 unique features of LIC’s Bima Diamond 841 Plan
Bima Diamond plan 841 offers extended cover for half of the policy tenure after the end of your usual policy tenure. This extended cover feature will be applicable for the policies which are active up to the period of maturity.
For example, if you buy this Bima Diamond policy for a Sum Assured of Rs. 5 lakhs with a term of 20 years. Then your extended cover will start immediately after 20th year completion and it will end after 30th year from the date of maturity. During this period, LIC’s Bima Diamond policy offers you half of the sum assured i.e. 2.5 lakhs. Please note that this is a fixed tenure policy with three tenures like 16 years, 20 years and 24 years.
Under Bima Diamond plan, you will get your money back at every 4th year of policy term but with certain conditions.
For example, if the policyholder survives till end of each of the specified duration during the policy term, a fixed percentage of Basic Sum Assured shall be paid.
This fixed percentage varies for each policy term:
- For 16 years and 20 years policy: 15% of Basic Sum Assured at the end of each of 4th, 8th and 12th year.
- For a 24 years policy: 12% of Basic Sum Assured at the end of each of 4th, 8th, 12th, 16th and 20th policy year.
Another feature is Auto cover period, in simple terms – policyholder will get life cover even after non-payment of the premium for certain period.
For example, if you paid premium for less than 3 years, then there is no Auto-cover option; but in case you paid between 3 to 5 years of your premium then you will get 6 months of “Auto cover” period. For those, who paid more than 5 years will get 2 years of Auto Cover period.
Death Benefit: In case of death during first five years of policy term, the “Sum Assured on Death” shall be paid to nominee. In case of death, after five years – “Sum Assured on Death” and “Loyalty Addition” will be paid to nominee. In case of death, during “Extended Cover Period” 50% of Basic Sum Assured will be paid to nominee.
Maturity Benefit: On the policyholder surviving to the policy term end, “Sum Assured on Maturity” along with “Loyalty Addition” will be paid to him/her
What is Loyalty Addition in Bima Diamond 841 plan?
Provided all the premiums dues are paid till date of death or maturity, LIC shall provide a Loyalty Addition to the policy holder. The Loyalty Addition, will be paid on death after completion of 5th policy year but within the policy term or on policy maturity, and this amount/loyalty will declared by LIC.
Our Review about the LIC’s Bima Diamond Policy 841
There is nothing extraordinary about this plan, it’s a simple money back plan providing some extra extended life cover. Even the maximum sum assured in 5 lakhs, which is biggest drawback of all. If you need a normal life cover then you can better get an online Term insurance plan.
There are plenty of other options to invest, as these typical endowment polices just get around 4 to 5 % returns. It is always advisable to avoid these kind of Endowment polices and keep your investments based on your financial goals including your life insurance.
Hence I would recommend you to take a good online term insurance and INVEST remaining amount in asset classes in which you are comfortable with.
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