LIC Bima Ratna Plan (864): A Comprehensive Overview

The LIC Bima Ratna Plan (Plan No. 864, UIN No. 512N345V01) is a non-linked, non-participating, individual savings life insurance plan offered by the Life Insurance Corporation of India (LIC). Launched on May 27, 2022, and withdrawn on January 1, 2025, this plan was designed to provide a unique blend of protection and savings, catering to individuals seeking financial security for their families alongside periodic returns. Below, we delve into the details of the plan, including its features, benefits, eligibility criteria, application process, and more.

Key Features of LIC Bima Ratna Plan

The LIC Bima Ratna Plan is a limited premium payment, money-back plan with guaranteed additions, offering flexibility and financial support. Here are its standout features:

• Non-Linked and Non-Participating: The plan is not tied to market performance and does not participate in LIC’s profit-sharing bonuses, ensuring predictable returns through guaranteed additions.
• Policy Terms: Available for 15, 20, or 25 years, with premium payment terms 4 years shorter than the policy term (11, 16, or 21 years, respectively).
• Survival Benefits: Policyholders receive 25% of the Basic Sum Assured as survival benefits in the last two years of the policy term (e.g., years 13 and 14 for a 15-year term, years 18 and 19 for a 20-year term, or years 23 and 24 for a 25-year term), provided the policy is in force.
• Maturity Benefits: On surviving the policy term, the policyholder receives 50% of the Basic Sum Assured plus accrued guaranteed additions.
• Guaranteed Additions: These are added at the end of each policy year, provided premiums are paid on time. The rates are:
  • Years 1–5: ₹50 per ₹1,000 Basic Sum Assured
  • Years 6–10: ₹55 per ₹1,000 Basic Sum Assured
  • Years 11–25: ₹60 per ₹1,000 Basic Sum Assured
• Death Benefit: If the policyholder passes away during the policy term after the risk commencement date, the nominee receives the “Sum Assured on Death” (higher of 125% of Basic Sum Assured or 7 times the annualized premium) plus accrued guaranteed additions.
• Loan Facility: Available after at least two full years of premium payments, with up to 90% of the surrender value for in-force policies or 80% for paid-up policies.
• Premium Payment Flexibility: Premiums can be paid yearly, half-yearly, quarterly, or monthly, with discounts of 2% for yearly and 1% for half-yearly payments.
• Tax Benefits: Premiums qualify for deductions under Section 80C, and maturity/death benefits are tax-free under Section 10(10D) of the Income Tax Act.

Benefits of LIC Bima Ratna Plan

The plan offers a dual advantage of insurance protection and savings, making it suitable for professionals, self-employed individuals, and anyone seeking a secure financial future. Key benefits include:

• Financial Support on Death: In case of the policyholder’s demise during the policy term, the nominee receives a lump sum (125% of Basic Sum Assured or 7 times the annualized premium, whichever is higher) along with guaranteed additions accrued until the date of death. This ensures financial stability for the family.
• Periodic Survival Benefits: The plan provides liquidity through survival benefits, with 25% of the Basic Sum Assured paid in the last two years of the policy term, helping policyholders meet financial needs.
• Maturity Benefits: On surviving the policy term, the policyholder receives 50% of the Basic Sum Assured plus guaranteed additions, offering a substantial payout for future planning.
• Guaranteed Additions: These enhance the policy’s returns, increasing in value over time and providing predictable growth.
• Optional Riders: Policyholders can enhance coverage by opting for riders like LIC’s Accidental Death and Disability Benefit Rider or Premium Waiver Benefit Rider for an additional premium.
• Loan Facility: The plan offers liquidity through loans, allowing policyholders to access funds for emergencies or financial obligations.
• Tax Savings: Premiums and benefits are eligible for tax exemptions, making the plan a tax-efficient investment option.

Eligibility Criteria

To purchase the LIC Bima Ratna Plan, individuals must meet the following eligibility requirements:

• Minimum Entry Age:
  • 5 years for a 15-year policy term
  • 90 days for 20- or 25-year policy terms
• Maximum Entry Age:
  • 55 years for a 15-year policy term
  • 50 years for a 20-year policy term
  • 45 years for a 25-year policy term
• Minimum Basic Sum Assured: ₹5,00,000 (in multiples of ₹25,000)
• Maximum Basic Sum Assured: No upper limit, subject to underwriting
• Policy Terms: 15, 20, or 25 years (15 and 20 years if purchased through POSP-LI/CPSC-SPV)
• Premium Payment Terms: 11 years (for 15-year term), 16 years (for 20-year term), or 21 years (for 25-year term)

For minors below 8 years, certain exclusions (e.g., suicide clause) do not apply, and a waiting period may be applicable for policies purchased through specific channels.

Application Process

To purchase the LIC Bima Ratna Plan, follow these steps:

1. Visit an LIC Branch or Agent: The plan can be bought through LIC’s corporate agents, brokers, Insurance Marketing Firms (IMF), Common Service Centres (CSC), or Point of Sales Persons-Life Insurance (POSP-LI).
2. Submit Required Documents:
   • First Premium Payment: Pay via cheque or cash.
   • Identity Proof: Aadhar card, PAN card, passport, or voter ID.
   • Address Proof: Aadhar card, passport, or utility bill.
   • Date of Birth Proof: Birth certificate, passport, or school certificate.
   • Plan Proposal Form: Complete and sign the LIC proposal form.
   • Passport-Sized Photograph: Provide a recent photograph.
   • Note: Vaccination certificates are typically not required unless specified.
3. Online Purchase: The plan can be purchased online through LIC’s website or authorized platforms, with digital KYC and payment options (e.g., debit/credit card, UPI, PayTM).
4. Contact LIC for Queries: Reach out via LIC’s customer service numbers (+91-22-68276827 or +91-8976862090) or email (co_complaints@licindia.com) for assistance.

Example Scenario

Consider Mr. Yash, aged 30, who purchases the LIC Bima Ratna Plan in 2022 with the following details:

• Basic Sum Assured: ₹20,00,000
• Policy Term: 25 years
• Premium Paying Term: 21 years
• Annual Premium: ₹1,16,178 + 4.5% GST

Scenario 1: Survival Till Maturity

• Total premiums paid over 21 years: ₹1,16,178 × 21 = ₹24,39,738
• Survival benefits: 25% of ₹20,00,000 = ₹5,00,000 in year 23 and ₹5,00,000 in year 24
• Maturity benefit (year 25): 50% of ₹20,00,000 = ₹10,00,000 + guaranteed additions (₹1,00,000 for 5 years + ₹1,10,000 for 5 years + ₹1,20,000 for 15 years = ₹28,50,000)
• Total benefits: ₹10,00,000 (survival benefits) + ₹38,50,000 (maturity) = ₹48,50,000

Scenario 2: Death in Year 13 (2035)

• Total premiums paid: ₹1,16,178 × 13 = ₹15,10,314
• Death benefit: 125% of ₹20,00,000 = ₹25,00,000 + guaranteed additions (₹1,00,000 for 5 years + ₹1,10,000 for 5 years + ₹1,20,000 for 3 years = ₹14,10,000)
• Total payout to nominee: ₹39,10,000

Exclusions and Conditions

• Suicide Clause: If the policyholder commits suicide within 12 months from the risk commencement date, the nominee receives 80% of the total premiums paid, provided the policy is in force and the policyholder is 8 years or older.
• Grace Period: A 15- to 30-day grace period is provided for unpaid premiums, during which the policy remains in force. If the premium is not paid by the end of the grace period, the policy lapses.
• Policy Revival: Lapsed policies can be revived within 5 years by paying all due premiums plus interest, subject to LIC’s terms.
• Cooling-Off Period: Policyholders can return the policy within 15 days of receipt if they disagree with the terms and conditions.
• Waiting Period: For policies purchased through POSP-LI/CPSC-SPV, a 90-day waiting period applies for normal death, refunding only premiums paid (excluding taxes and rider premiums) if death occurs within this period, except for minors below 8 years.

Comparison with Other LIC Plans

Compared to plans like LIC Bima Jyoti (Plan No. 860), the Bima Ratna Plan offers higher death benefits (125% of Basic Sum Assured vs. 7 times annualized premium or sum assured in Bima Jyoti) and survival benefits during the policy term, which Bima Jyoti lacks. However, Bima Jyoti allows maturity/death benefits to be taken in installments over 5, 10, or 15 years, while Bima Ratna limits this to 5 years.

Why Choose LIC Bima Ratna?

The LIC Bima Ratna Plan is ideal for individuals seeking a low-risk, guaranteed-return investment with life cover. Its sovereign guarantee from the Government of India, tax benefits, and flexible payment options make it a trusted choice. The plan’s periodic payouts and loan facility provide liquidity, while the guaranteed additions enhance returns, making it suitable for professionals, software engineers, doctors, and self-employed individuals.

Conclusion

The LIC Bima Ratna Plan (864) is a versatile savings and insurance product that balances protection and financial growth. With its guaranteed additions, survival benefits, and death benefits, it caters to diverse financial needs while offering tax advantages and flexibility. Although the plan was withdrawn on January 1, 2025, it remains a noteworthy option for those who purchased it, providing peace of mind and financial security backed by LIC’s trusted reputation.