Bima account-I by LIC of India is a non-linked plan wherein, the policy holder will not have to undergo any medical examination and yet be covered, subject to certain conditions. This insurance plan offers everything an insurance plan is expected to deliver i.e. liquidity, risk cover, no medical examination, guaranteed minimum return, transparent charges and simplicity.
A separate policyholder’s account is maintained for every policy holder and the premiums paid, shall be credited to this account after deduction of charges. A risk cover shall be provided by way of deduction of mortality charges from the policyholder’s account.
In case all due premiums have been paid by the policyholder, an annual interest of 6% p.a. shall be granted on the amount in the account. Also, this account may also be entitled to earn an additional return, which is subject to the experience under this plan.
The policy holder also has an option to pay additional (Top-up) premiums with no increase in the risk cover. Immediately after the first anniversary of the policy, loan facility will be available.
ELIGIBILITY CONDITIONS AND OTHER RESTRICTIONS:
1. Minimum Entry Age: ——11 (completed)
2. Maximum Entry Age: ——50 (nearest birthday)
3. Policy Term: —————–5 to 7
4. Minimum Maturity Age: —18 (completed)
5. Maximum Maturity Age: —57 (nearest birthday)
In case the policy holder survives till the end of the policy term, the balance in the Policyholder’s Account shall be payable to him.
If the life assured unfortunately dies during the policy term while the cover is in full force, the company will pay the Sum assured along with the balance in the Policyholder’s account.
The guaranteed interest will be payable on the Policyholder’s account and NOT on the gross premium the policyholder has paid.
An annual interest of 6% p.a. shall be provided on the Policy holder’s account which includes Policyholder’s regular premium account and the policyholder’s top-up premium account subject to the condition that the policy is in force at 5% p.a., if it is a paid- up policy. For the whole policy term, interest rates will be guaranteed.
The policyholder’s account during the revival period shall gain an interest of 5% p.a. and on revival of policy, it will earn 6% p.a. from the revival date.
Once all the charges have been deducted from the policyholder’s account, the interest due, shall be calculated on day to day basis on balance in the policy holder’s account at the end of each calendar month.
Based on the experience on the policies in force, LIC may declare an additional interest rate on policyholder’s regular premium account.
Immediately after the payment of first premium installment, the policy will acquire a Surrender Benefit.
The surrender value will be as follows:
- Surrender before completion of third policy anniversary:
The balance in the policy holder’s account as on the date of surrender will be entitled for a surrender benefit, after the completion of third policy anniversary. From the date of commencement till the end of lock-in period of 3 years, no charges will be deducted from the policy holder’s account. Also, there will be no credit of interest after the date of surrender. If the surrender happens on or after completion of 3rd policy anniversary, balance in the policyholder’s account will be payable.
Discontinuance of Premiums:
In case the premiums due are not paid within the grace period, the policy shall become a paid-up policy with an option for reviving it within 12 months from the date of first unpaid premium. The revival period will be free of mortality charges and the life cover will cease. A guaranteed interest of 5% p.a. shall be earned on the balance in the policy holder’s account during the revival period and no expenses will be debited. Once the policy has been revived, the policy holder’s account will again earn 6% p.a. from the date of revival.
Depending upon the contingencies, following will be the difference in payment of benefits:
- In case of the death of the policy holder: Balance in the policy holder’s account shall be payable
- When the policy matures: Balance in the policy holder’s account shall be payable
- In case the policy is surrendered: following is the surrender benefit payable:
Duration from the commencement date surrender benefit:
Surrender benefit shall be payable only after the third policy anniversary and this amount will be the balance in the policy holder’s account as on the date of surrender. No charges will be deducted from the policy holder’s account during the lock-in period, which is a term of 3 years from the date of commencement of policy and no charges will be deducted from the policy holder’s account neither will there be any credit of interest in the account after the date of surrender.
The balance in the policy holder’s account shall be payable on or after the completion of 3rd policy anniversary.