The product can be purchased through corporate agents, insurance marketing companies (IMFs), brokers, CPSC-SPVs and POSP-LIs engaged by these intermediaries viz. Corporate agents, insurance marketing companies (IMFs) and brokers
LIC’s Bima Ratna plan provides financial support to the family in the event of the unfortunate death of the insured during the term of the policy and also provides periodic payments for the survival of the insured at fixed durations to meet various needs financial.
Additionally, the plan supports liquidity needs through a loan facility.
Here are the main features of the new plan:
1. Death benefit:
LIC provides death benefits on the death of the insured person during the term of the policy after the risk start date plus accrued guaranteed additions.
LIC defines the sum insured at death as greater than 125% of the basic sum insured or 7 times the annualized premium. This death benefit payment will not be less than 105% of the total premiums paid (excluding any additional premiums, rider(s) and taxes) up to the date of death.
However, in the case of a minor under the age of 8, in the event of death before the onset of the risk, the benefit due will be the reimbursement of the premium(s) paid (excluding taxes , any additional premium(s) and endorsement(s), if applicable), without interest.
2. Survivor benefit:
In its survivor benefits – LIC will pay 25% of the basic sum insured at the end of each 13th and 14th year of insurance if the duration of the plan is 15 years. For a 20-year term plan, LIC will pay 25% of the basic sum insured at the end of each of the 18th and 19th policy years. If the insurance plan is for 25 years, then LIC will pay the same 25% at the end of each 23rd and 24th policy year.
3. Maturity Advantage:
In its Bima Ratna brochure, LIC explains that on the life insured surviving the stipulated maturity date, provided the policy is in force, the “sum insured at maturity” together with accrued guaranteed top-ups, will be payable . When “the sum insured at maturity” is equal to 50% of the basic sum insured.
4. Guaranteed supplements:
From the 1st to the 5th year, LIC will pay guaranteed supplements of ₹50 per ₹1000 basic sum insured. While from the 6th to the 10th year of insurance, LIC will pay ₹55 per ₹1000 basic sum assured, and the guaranteed addition will become ₹60 from the 11th to the 25th year of insurance per ₹1000 basic sum insured.
In particular, in the event of death within the framework of a contract in force, the guaranteed supplement in the year of death will be for the full year of the contract.
However, if premiums are not duly paid, guaranteed top-ups cease to accrue under a policy.
In the case of a paid-up policy or in the event of a surrender of a policy, the guaranteed addition for the year of insurance in which the last premium is received will be added in proportion to the premium received for that year, LIC said.
5. Eligibility Requirements and Other Restrictions:
LIC offers a minimum basic insured amount of up to ₹5,000,000. There is no limit to the maximum basic sum insured, however, it will be in multiples of ₹25,000.
The duration of the policy varies from 15 years, 20 years and 25 years. However, the term of the policy will be 15 and 20 years if the policy is purchased through POSP-LI/CPSC-SPV.
Under the Bima Ratna, the premium payment period is 11 years for a policy period of 15 years. While it is 16 years and 21 years for insurance periods of 20 years and 25 years.
The minimum age is 5 years of completion for an insurance period of 15 years. While 90 days from completion for 20 and 25 year policy terms.
The maximum age is 55 for the 15-year insurance periods, while the age is 50 and 45 for the 20- and 25-year insurance periods.
Also, the policy can be purchased at age 65 minus the term of the policy if purchased through POSP-LI/CPSC-SPV.
The minimum contract maturity age is 20 for the 15-year and 20-year contract durations. While the age of maturity is ₹25 years for a contract period of 25 years.
The maximum age of maturity is 70 years.
6. Risk start date:
In the event that the entry age of the insured is less than 8 years, the risk under this plan will commence either 2 years from the commencement date or the anniversary of the policy coinciding with or immediately after reaching 8 years of age, whichever is earlier. For people aged 8 or over, the risk will begin immediately.
7. Payment options:
The Settlement Option is an option to receive the Maturity Benefit in installments over 5 years instead of a lump sum under an in-force, paid-up policy. This option may be exercised by the Policyholder during the Insured’s minority or by the Insured aged 18 or over, for all or part of the maturity proceeds payable under the policy.
The amount chosen for this option by the policyholder/insured (ie the net loss amount) can be either in absolute value or as a percentage of the total loss proceeds to be paid.
There are monthly, quarterly, semi-annual and annual installments under the policy.
The minimum monthly payment is ₹5,000, while it is quarterly ₹15,000, half-yearly ₹25,000, and annually ₹50,000.
If the net claim amount is less than the amount required to provide the minimum payout amount as elected by the policyholder/insured, the claim proceeds will be paid in a lump sum only.
8. Payment of premiums:
Premiums can be paid regularly at annual, semi-annual, quarterly or monthly intervals (monthly premiums through NACH only) or through payroll deductions.
9. Grace period:
A grace period of 30 days is granted for the payment of annual, semi-annual or quarterly premiums and 15 days for monthly premiums from the date of the first unpaid premium. During this period, the policy is deemed to be in force with the cover of risks without interruption according to the terms of the policy. If the premium is not paid before the grace days expire, the policy lapses.
The above grace period will also apply to rider premiums which are payable together with the base policy premium.
10. Alarm Clock:
If the premiums are not paid within the grace period, the policy will expire. An expired policy can be reactivated, but within 5 consecutive years from the date of the first unpaid premium but before the due date.