LIC has launched a revised version of its LIC Bima Jyoti Plan 760, which replaces the earlier version (Table No. 860). Available from October 14, 2024, the plan is a non-linked, non-participating individual life insurance savings plan. It offers both protection and savings to ensure family safety. This article discusses the key aspects of Bima Jyoti Plan in detail, including its revision, eligibility, benefits, optional features and commission structure for agents.
Also see: LIC Agents News: Management took 4 Big Decisions, 14 lakh agents will benefit
Key Modifications in Bima Jyoti Plan 760
The Bima Jyoti Plan has undergone significant changes compared to its predecessor. Some of the most notable modifications include:
- Increase in Minimum Basic Sum Assured: LIC has raised the minimum basic sum assured from ₹1,00,000 to ₹1,25,000. This increase enhances the plan’s overall value and provides greater financial security for policyholders and their families.
- Lower Entry Age: The entry age for the plan has been reduced from 90 days to 30 days, allowing parents to secure insurance coverage for their children at an even earlier age.
- Revised Premium Rates: The premium rates for the new Plan No. 760 have been revised upward. While this reflects the increased benefits offered by the plan, it also means that policyholders need to pay slightly more than they would have under Plan No. 860.
- Flexible Surrender Option: Policyholders can surrender the policy at any time, but to receive the surrender benefit, they must pay at least one full year’s premium. This offers policyholders flexibility and liquidity in times of need.
- Paid-Up Policy Death Benefit: If the policyholder fails to pay the premium and the policy is converted to paid-up status, the nominee is still entitled to receive an amount no less than 105% of the total premiums paid, ensuring some degree of financial protection for the family.
- Changes in Policy Loan Provisions: LIC has made modifications to how loans are provided against the policy. Loans are available based on surrender value, and the amount that can be borrowed depends on the policy’s status, whether it is paid-up or in force.
- Introduction of Riders: Four optional riders are available with the Bima Jyoti Plan. These are the Accidental Death and Disability Benefit Rider, Accident Benefit Rider, New Term Assurance Rider, and Premium Waiver Benefit Rider. These riders add more layers of protection and flexibility to the plan.
- Extended Free Look Period: The free look period has been increased from 15 to 30 days. If the policyholder is dissatisfied with the policy, they can return it within 30 days for a full refund.
Also see: LIC New Policy on Premium Refunds for Lapsed Policies in Moradabad
Eligibility and Features
The Bima Jyoti Plan is designed to cater to a broad range of individuals. Key eligibility criteria and features of the plan are outlined below:
- Minimum Entry Age: 30 days
- Maximum Entry Age: 60 years
- Policy Term: Minimum of 15 years and a maximum of 20 years
- Maturity Age: The minimum maturity age is 18 years (completed), while the maximum maturity age is 75 years.
- Minimum Basic Sum Assured: ₹1,25,000
- Maximum Basic Sum Assured: No limit (subject to underwriting conditions)
- Sum Assured Multiple: LIC has divided the Sum Assured multiples into two categories. For a Sum Assured between ₹1,25,000 and ₹2,75,000, the multiple is ₹5,000. For policies with a Sum Assured of more than ₹2,75,000, the multiple is ₹25,000.
- Premium Payment Term: The premium must be paid for 5 years less than the policy term.
- Premium Payment Modes: Yearly, half-yearly, quarterly, and monthly modes are available. The monthly mode requires NACH (National Automated Clearing House) deductions, which will be automatically converted to quarterly mode if NACH is not activated within 3 months.
- Guaranteed Additions: ₹50 per ₹1,000 basic sum assured for each policy year
Also see: How to Apply for IRDAI Whole-Time Member (Life) Position | IRDAI Recruitment 2024
Others Optional Benefits
Maturity Benefits
Upon maturity, the policyholder receives the sum assured along with guaranteed additions. Guaranteed additions are calculated at the rate of ₹50 per ₹1,000 of the basic sum assured for every year of the policy term.
For example, if the sum assured is ₹10,00,000 and the policy term is 20 years, the policyholder would receive a total of ₹20,00,000 upon maturity (₹10,00,000 sum assured + ₹10,00,000 guaranteed additions).
Death Benefits
In the event of the policyholder’s demise, the sum assured on death is defined as the higher of either 125% of the basic sum assured or seven times the analyzed premium. Furthermore, the total death benefit will not be less than 105% of the total premiums paid up to the date of death. This ensures that the nominee receives a minimum guaranteed benefit, providing additional financial security.
Surrender Value
The policyholder can surrender the policy anytime, provided they have paid at least one year’s full premium. Upon surrender, the policyholder is entitled to receive the guaranteed surrender value, which increases with the duration of the policy.
Also see: LIC Agents News: Management took 4 Big Decisions, 14 lakh agents will benefit
Loan Options
The policyholder can apply for a loan anytime after one year, provided the full premium for the first year has been paid. The loan amount available will depend on the policy status at the time of application.
If the policy is in force:
- For loans taken within the first 2 years after the policy commencement, the policyholder can borrow up to 50% of the surrender value.
- For loans taken after 2 years, the policyholder can borrow up to 80% of the surrender value.
If the policy is in paid-up status:
- For loans taken within the first 2 years, the policyholder can borrow up to 40% of the surrender value.
- For loans taken after 2 years, the policyholder can borrow up to 75% of the surrender value.
Please note that interest will be charged annually on the loan amount disbursed by LIC.
Revival Benefit
The policyholder has the option to revive a lapsed policy within 5 years from the date of the first unpaid premium. This provides an opportunity to restore coverage without losing the benefits accrued prior to lapse.
Paid-up Value
If the policyholder pays the full premium for at least one year and subsequently fails to pay the premium, the policy will automatically convert into a paid-up policy. In this case, the paid-up value will be calculated based on the total premiums paid and the basic sum assured. The paid-up sum assured is the portion of the sum assured that is considered valid and payable upon maturity or death, calculated as follows:
Paid-up Value = (Total Premiums Paid / Total Premiums Due) × Basic Sum Assured
This feature ensures that even if the policyholder misses premium payments, they will still receive benefits according to the paid-up value.
Grace Period
LIC allows a grace period of 15 days for monthly premiums and 30 days for quarterly, half-yearly, and yearly premium.
Free Look Period
The free look period has been increased from 15 days to 30 days, allowing the policyholder to return the policy if they are unsatisfied.
Tax Benefits
The policyholder can avail of income tax benefits under this plan. The premium paid is exempted under Section 80C, while the survival, maturity, and death claim benefit amounts are tax-free under Section 10(10D). This means that no tax is required to be paid on these amounts.
Rebates
In Bima Jyoti Plan 760, if we talk about mode rebate, then a 2% discount on the tabular premium is available for yearly premium payments, and a 1% discount is available for half-yearly payments. However, no rebate is available on quarterly and monthly mode premiums.
For high basic sum assured, there will be no rebate on basic sum assured from ₹1,25,000 to ₹3 lakh on tabular premium, but if the policy amount is between ₹3 lakh to ₹5 lakh, a 4% rebate on the basic sum assured will be available. A 5% rebate applies for policies from ₹5 lakh to ₹10 lakh, and a 6% rebate for policies of ₹10 lakh or more.
Optional Benefit Riders
LIC Bima Jyoti Plan offers four optional riders that policyholders can choose to enhance their coverage:
- Accidental Death and Disability Benefit Rider: This rider provides additional benefits in case of accidental death or disability.
- Accident Benefit Rider: This rider offers a lump sum benefit in the event of an accident leading to death or permanent disability.
- New Term Assurance Rider: This rider allows policyholders to increase the sum assured through additional term coverage, requiring an extra premium payment.
- Premium Waiver Benefit Rider: This rider waives off future premiums in case of the policyholder’s death during the policy term, ensuring that the policy remains active without any additional financial burden on the family.
Note: Policyholders can select one out of the first two riders (Accidental Death and Disability Benefit Rider or Accident Benefit Rider) but not both. The Premium Waiver Benefit Rider can be chosen alongside any of the other riders.
Settlement Option
This plan allows policyholders to choose a settlement option for their maturity benefit or death benefit. This allows the policyholder to receive the maturity amount or death claim in instalments instead of a lump sum. While buying the policy, the policyholder can choose one of the following instalment periods:
- 5 years
- 10 years
- 15 years
This option is available for both maturity benefits and death benefits, ensuring that the financial needs of the nominee or policyholder are met in the long term. Whether the policy is in force or has been converted to paid-up status, the instalment option can provide additional financial security.
Maturity Benefit Example
To understand the maturity benefit of this plan, let’s consider an example involving a fictional character, Mr. Ram.
| Details: | Maturity Benefit Example |
|---|---|
| Name | Mr. Ram |
| Age | 30 years |
| Sum Assured | ₹10,00,000 |
| Rider | Accidental Death and Disability Benefit Rider of ₹10,00,000 |
| Policy Term | 20 years |
| Premium Payment Duration | 15 years |
Premium Payments:
- In the first year, Mr. Ram pays a premium of ₹83,057 plus 4.5% GST.
- If we compare this premium with the annual premium of Plan No. 860 (the previous policy), Mr. Ram pays ₹1,764 more for Plan No. 760.
- From the second year until the end of the premium payment term (15 years), he pays ₹81,268 annually plus 2.25% GST.
Total Premium Paid:
- Over 15 years, Mr. Ram pays a total premium of ₹12,20,809.
Maturity at Age 50:
- Upon maturity at age 50, Mr. Ram receives the sum assured plus guaranteed additions.
| Calculating Guaranteed Additions: |
|---|
| The formula for calculating guaranteed additions is: |
| Sum Assured ÷ 1000 × 50 × Policy Term |
| For Mr. Ram: |
| Guaranteed Addition = 10,00,000 ÷ 1000 × 50 × 20 = 10,00,000 |
Total Maturity Benefit:
- Sum Assured: ₹10,00,000
- Guaranteed Additions: ₹10,00,000
- Total Maturity Benefit: ₹20,00,000
Thus, Mr. Ram’s total maturity benefit from LIC Bima Jyoti Plan 760 is ₹20,00,000.
Death Benefit Example
To illustrate the death benefit of this plan, consider the following scenario: If the policyholder pays the premium for the first five years and unfortunately passes away at the age of 34, the payout to the nominee will be calculated based on the circumstances of the death.
1. Natural Death or Due to Disease:
In the case of natural death, the nominee will receive 125% of the basic sum assured plus the guaranteed addition accrued over five years.
For a basic sum assured of ₹10 lakhs:
- 125% of Basic Sum Assured: ₹12,50,000
- Guaranteed Addition for 5 Years: ₹50,000 per year, totaling ₹2,50,000
Thus, the total amount the nominee will receive in this scenario is:
- Total: ₹12,50,000 + ₹2,50,000 = ₹15,00,000
2. Accidental Death:
In the event of an accidental death, the nominee will receive the basic sum assured of ₹10 lakhs plus an additional ₹10 lakhs as a death benefit.
Therefore, the total payout to the nominee in this case will be:
- Total: ₹12,50,000 + ₹10,00,000 = ₹25,00,000
This example clearly demonstrates the financial protection offered by the LIC Bima Jyoti Plan, ensuring that the policyholder’s nominee is adequately supported in the event of an untimely death.
Commission for LIC Agents
The commission payable to LIC agents for the Bima Jyoti Plan is structured based on the premium paying term, which can range from 10 to 15 years.
| Premium Paying Term | 10 to 14 Years | 15 Years |
|---|---|---|
| 1st Year | 20% | 25% |
| 2nd to 5th Years | 7.5% | 7.5% |
| 6th to 14th Years | 5% | 5% |
| Last Premium (15th Year) | 7.5% | 7.5% |
This commission structure incentivizes agents to maintain long-term relationships with policyholders, ensuring they receive consistent compensation over the life of the policy.
Conclusion
LIC Bima Jyoti Plan 760 provides a robust combination of savings and protection, making it an attractive option for individuals looking to secure their financial future. The plan’s guaranteed additions, flexible surrender options, and comprehensive death and maturity benefits make it a valuable tool for long-term financial planning. Additionally, the availability of riders and flexible premium payment options add to the plan’s appeal. For LIC agents, the structured commission ensures a stable income stream while promoting long-term customer engagement.
Also see:
- LIC Jeevan Lakshya Plan 733
- LIC Nivesh Plus Plan 749
- LIC Jeevan Labh Plan 736
- LIC Jeevan Anand Plan 715
FAQs
What is the minimum and maximum sum assured under LIC Bima Jyoti Plan 760?
The minimum basic sum assured is ₹1,25,000, and there is no maximum limit on the sum assured. Policyholders can choose the amount based on their income and financial underwriting.
What is the premium payment term for LIC Bima Jyoti Plan 760?
The premium payment term is 5 years less than the policy term. For example, if the policy term is 20 years, the premium is payable for 15 years.
What are the maturity benefits of LIC Bima Jyoti Plan 760?
Upon maturity, the policyholder will receive the basic sum assured plus guaranteed additions. Guaranteed additions are ₹50 per ₹1,000 of the basic sum assured for every policy year.
What riders are available under LIC Bima Jyoti Plan 760?
The available riders include the Accidental Death and Disability Benefit Rider, Accident Benefit Rider, New Term Assurance Rider, and Premium Waiver Benefit Rider.
Can I surrender LIC Bima Jyoti Plan 760 before the policy term ends?
Yes, you can surrender the policy anytime after paying the full premium for at least one year. You will receive the guaranteed surrender value based on the number of years the policy has been in force.
Disclaimer: The information provided in this article about LIC Bima Jyoti Plan 760 is for educational purposes only and does not constitute financial advice. Policy details, benefits, and premiums may vary based on individual circumstances and updates from LIC. It is recommended to consult with a licensed financial advisor or LIC agent for personalized advice before purchasing any insurance product.