LIC Bima Bachat Money Back Plan is one of the very popular LIC policies in India. This is a single premium paid money back plan. As the name suggests there is a component attached as money back with which a policy subscriber can get some amount back in every after few year. You can check out the current LIC money back plan review.
This is the main point or feature of this policy with which LIC agents generally try to sell this policy. Other than that LIC Bima Bachat plan has other typical benefits as well. This a non-unit linked plan which is a mixture of insurance and investment plan. Here we will list out the main features of this policy below and also try to analyse the how much return one can really get from this policy.
Features of LIC Bima Bachat Money Back Policy
Here are the few key benefits of this policy –
1) This is a single premium paid policy, so just pay once and enjoy the policy benefits.
2) In every after 3 years subscriber will get 15% of the sum assured value return as per money back policy terms. This attracts people very much.
3) Policy term is not like other policies, its 9 years, 12 years and 15 years.
4) On maturity insurer will get the sum assured and the loyalty addition. You can assume an amount approximately Rs. 35 for every premium payment of 1000.
5) Like other policies on death of the insurer nominee will get the sum assured with the accrued bonus amount.
6) Insurer can also enjoy a rebate on premium based on premium paid amount. If the sum assured value is between Rs 50,000- Rs.1lakh then he/she can get a rebate of 5% on premium amount. If it is between Rs. 1 lakh – Rs.2 lakh then he/she can get a rebate of 7% on premium amount. And for premium more than Rs 2 lakh insurer can get 8% off on premium paid.
7) You can also avail a loan on this policy.
8) There is a fixed surrender value assured in this policy. Policy holder can surrender this policy after completion of 1 year only and at that time insurer can get 90% of premium aid back as surrender value.
9) Premium paid in this policy can be claimed under section 80C for income tax rebate and also the maturity benefits are exempted under section 10 D.
LIC Bima Bachat Money Back Policy Return calculation
Here we will take an example of a man/women with below details
Age = 30 years
Policy Sum Assured = Rs 1,00,000
Policy Term = 15 years
Single Premium applicable = Rs 74,976
So as per the money back plan in every 3 year insurer will get Rs 74,976 x 0.15 = 11,246 back. So in 15 year he/she might get 11,246 x 4 = 44,985 (skipped the last year as the policy will be mature).
On maturity the loyalty addition amount will be (approx) = 74,976 x 35/1000 = Rs 26,238
So after 15 years insurer will get = 74,976 + 44,985 + 26,238 = Rs 1,46,199.00/-
So after 15 years seems like the invested amount is just get doubled only which does not look like a good investment at all. Even with NSC for 10 years you can more than double the invested amount. Besides this considering the premium amount, life insurance amount Rs 1 lakh is nothing as per our current life expenditure. You can always choose a pure term plan where you might get an insurance upto 1 crore with a very less premium. Then invest the rest amount in any other fixed return plan to get maximum benefit.
Note: This calculation may not be 100% correct. I have just used it to illustrate the policy return, in case anything need to correct please share your comment so that I can fix the same.