Life Insurance Corporation of India (LIC) has always been a pioneer in introducing insurance products that cater to the diverse needs of the population. Among its offerings, the LIC Micro Bachat Plan 751 stands out as an affordable and accessible insurance plan designed specifically for individuals with limited incomes. This plan eliminates the need for medical tests and provides significant benefits, including GST-free premiums and auto cover, making it an attractive option for those seeking low-budget insurance solutions. In this article, we will explore the features, eligibility, benefits, and other important aspects of the LIC Micro Bachat Plan, helping you understand why it is a perfect choice for financial security on a budget.
Also see: Strategy to create ₹10,000 to ₹3.56 crore with LIC Mutual Fund Growth
Key Features of LIC Micro Bachat Plan 751
The Micro Bachat Plan 751 is a non-linked, participating plan that provides both insurance coverage and savings benefits. Below are its standout features:
- No Medical Test Required: Applicants are not required to undergo any medical examinations to purchase this plan, making it highly accessible.
- Affordable Premiums: Premiums for this plan are minimal and start as low as ₹500 per month, ensuring affordability for low-income individuals.
- GST-Free Premiums: Unlike other LIC policies, the Micro Bachat Plan exempts policyholders from paying Goods and Services Tax (GST) on their premiums.
- Auto Cover Benefit: The plan includes an auto cover period, providing continued insurance coverage even if the policyholder misses a premium payment.
Also see: LIC Bima Jyoti Plan 760
LIC Micro Bachat Plan 751 Basic Details
| Feature | Details |
|---|---|
| Plan Name | LIC Micro Bachat Plan 751 |
| Plan Type | Non-linked, participating plan |
| Minimum Sum Assured | ₹1 lakh |
| Maximum Sum Assured | ₹2 lakh |
| Eligibility (Age) | 18 to 55 years |
| Policy Term | 10 to 15 years |
| Premium Payment Modes | Yearly, Half-Yearly, Quarterly, Monthly |
| GST on Premium | Not applicable |
| Maturity Benefits | Basic Sum Assured + Loyalty Additions |
| Death Benefits | Sum Assured + Loyalty Additions |
| Auto Cover Benefit | Available |
| Loan Facility | Available after 1 year |
| Policy Surrender | Allowed after 1 year |
| Riders | Available |
| Official Website | https://licindia.in/ |
Eligibility Criteria for the LIC Micro Bachat Plan 751
To qualify for the plan, applicants must meet the following conditions:
- Minimum Sum Assured: ₹1 lakh
- Maximum Sum Assured: ₹2 lakh (The limited sum assured ensures the plan remains targeted toward low-income individuals.)
- Entry Age: Between 18 and 55 years
- Policy Term: 10 to 15 years
Understanding LIC Micro Bachat Plan with an Example
Let us understand this entire insurance plan with the help of an example.
Assume the policyholder’s age is 25 years, and the sum assured is ₹1 lakh. The policy term selected is 15 years. Here’s how the premiums and benefits unfold:
1. Premium Calculation:
The annual premium for this plan is ₹5,385, and it is GST-free. The policyholder must pay this amount every year for the next 15 years.
2. Maturity Benefits:
At the end of 15 years, the policy matures, and the benefits include:
- Basic Sum Assured: ₹1 lakh (guaranteed).
- Loyalty Addition: ₹15,000 (non-guaranteed, based on LIC’s performance).
- Total Maturity Amount: ₹1,15,000.
3. Total Premium Paid:
- Over the policy term, the total premium paid amounts to ₹80,775.
This example shows the financial benefits of a Micro Bachat Plan for a 25-year-old policyholder who opts for a term of 15 years and a sum assured of ₹1 lakh. This is assuming that the policyholder does not meet with an accident
Also see: LIC Jeevan Tarun Plan 734
Death Benefits of LIC Micro Bachat Plan 751
The LIC Micro Bachat Plan 751 ensures financial security for the nominee in case of the policyholder’s demise during the policy term.
- If Death Occurs Within the First 5 Years: The nominee is entitled to receive the sum assured on death.
- If Death Occurs After 5 Years: The nominee receives the sum assured on death along with the loyalty addition accrued up to the date of death.
Example:
Suppose the policyholder dies during the 6th year of the policy. In this case:
- Sum Assured on Death: ₹1 lakh
- Loyalty Addition: ₹5,000 (approximate value)
- Total Death Benefit: ₹1,05,000
This example highlights how the plan provides a substantial safety net for the policyholder’s family.
Auto Cover Facility: A Comprehensive Overview
Let us now talk about the auto cover facility. This feature ensures that policyholders continue to have insurance coverage even if they miss a premium payment. Before understanding auto cover, it is important to know what the grace time period is.
The grace time period is an additional time provided by LIC for paying the premium after the due date. If the policyholder fails to pay the premium within this period, the policy lapses. In the event of the policyholder’s death during the lapse period, the nominee is not entitled to any insurance claim. However, LIC’s auto cover facility addresses this issue by providing an extended coverage period even after the premium due date.
- Auto Cover After 3 Years: If the policyholder has paid premiums for at least three years, they are eligible for a 6-month auto cover period starting from the first unpaid premium.
- Auto Cover After 5 Years: For those who have paid premiums for more than five years, LIC offers an extended 2-year auto cover period. During this time, the nominee receives the insurance claim even if the premium remains unpaid.
Exclusions to Auto Cover
While the auto cover facility is a significant benefit, it comes with specific exclusions:
- If the policyholder commits suicide during the auto cover period, the insurance cover benefit is not applicable.
- Any additional riders attached to the policy do not provide benefits during the auto cover period.
This feature enhances the plan’s reliability, offering policyholders peace of mind during financial challenges.
Additional Benefits of the LIC Micro Bachat Plan 751
Now let’s talk about what other benefits you get in this plan:
1. Riders for Enhanced Coverage:
Policyholders can opt for riders to strengthen their coverage:
- Accidental Death and Disability Benefit Rider
- Accidental Benefit Rider
These riders can be added to the policy by paying an extra premium.
2. Loan and Surrender Facility:
After completing one year of the policy term, policyholders are eligible to:
- Take a loan against their policy.
- Surrender their policy if required.
Premium Payment Options
LIC provides multiple premium payment modes for flexibility:
- Yearly
- Half-Yearly
- Quarterly
- Monthly
However, for quarterly or monthly payment mode, the minimum sum assured should be ₹2 lakh. And for sum assured less than ₹2 lakh, only yearly and half-yearly payment options are available.
Why Choose LIC Micro Bachat Plan 751?
The Micro Bachat Plan stands out due to its simplicity, affordability, and wide range of benefits. It is particularly beneficial for individuals with low incomes or those unable to undergo medical tests. Key reasons to choose this plan include:
- Affordability: The low premium ensures that insurance remains accessible to all.
- Comprehensive Coverage: From auto cover benefits to loyalty additions, this plan provides robust protection.
- Flexibility: Policyholders can choose from multiple premium payment modes and policy terms.
- GST Exemption: The absence of GST on premiums makes it more economical compared to other plans.
Limitations and Exclusions
While the Micro Bachat Plan is highly beneficial, there are certain limitations:
- Limited Coverage: The maximum sum assured is restricted to ₹2 lakh.
- Exclusions During Auto Cover: Suicide or additional riders are not covered during the auto cover period.
- Non-Guaranteed Loyalty Additions: The loyalty addition is subject to LIC’s financial performance and cannot be guaranteed.
Who Should Consider the LIC Micro Bachat Plan 751?
The Micro Bachat Plan is ideal for:
- Low-income individuals looking for affordable insurance options.
- People who prefer plans without mandatory medical examinations.
- Those seeking GST-free insurance solutions.
Conclusion
The LIC Micro Bachat Plan 751 is a thoughtful initiative designed to cater to low-income individuals who seek a blend of savings and insurance coverage. With its GST exemption, auto cover benefit, and affordable premiums, it is an excellent option for individuals looking to secure their future without straining their finances. However, prospective policyholders should assess their financial goals and consider the plan’s limitations before making a decision.
FAQs
What is the minimum sum assured under the LIC Micro Bachat Plan?
The minimum sum assured is ₹1 lakh.
Is a medical test required to purchase this plan?
No, the plan does not require any medical tests.
Are GST charges applicable on premiums?
No, premiums under this plan are GST-free.
What is the auto cover benefit?
The auto cover benefit ensures continued insurance coverage for up to 6 months (after 3 years of premium payment) or 2 years (after 5 years of premium payment), even if premiums are unpaid.
Can I take a loan against the policy?
Yes, you can avail of a loan after completing one policy year.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please refer to the official LIC policy documents for detailed terms and conditions. Policy benefits, loyalty additions, and exclusions are subject to LIC’s regulations and performance. Individuals are advised to assess their financial needs and consult with a licensed advisor before purchasing this plan.