LIC’s BIMA BACHAT ( Table No.
175 )
Benefit Illustration
Introduction
Insurance Regulatory & Development Authority (IRDA) requires all life insurance
companies operating in India to provide official illustrations to their customers. The
illustrations are based on the investment rates of return set by the Life Insurance Council
(constituted under Section 64C(a) of the Insurance Act 1938) and is not intended to
reflect the actual investment returns achieved or may be achieved in future by Life
Insurance Corporation of India (LICI).
For the year 2005-06 the two rates of investment return declared by the Life Insurance
Council are upto 6% and upto 10% per annum.
Product Summary
It is a single premium money back type plan where Premium is paid in a lump sum at the
outset of the policy. The premium so paid shall be paid back to the policyholder along
with Loyalty Additions, if any, on the date of maturity. In addition, the survival benefit
instalments are payable on survival of the policyholder till the specified durations. The
plan also provides for the payment of Sum Assured in case of death during the term of
the policy irrespective of whether or not any survival benefits have been paid earlier. No
rider benefits shall be available.
Premiums :
Premium under the plan is payable in one lump sum (Single Premium) at the start of the
policy.
Bonuses :
This is a participating plan and the policy shall participate in the profits of the
Corporation’s with-profits assurance business. The policy shall, however not be eligible
for reversionary bonuses and shall participate to a share of profits in the form of Loyalty
Addition (one time) only payable on maturity. On the Life Assured surviving the
stipulated date of maturity, the policy may be eligible for payment of Loyalty Addition, if
any, depending upon the experience of the Corporation at such rate and on such terms as
may be declared by the Corporation.
Death Benefit : Payment of an amount equal to Sum Assured on death of the Life
Assured during the term of the policy.
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Survival Benefits : Payable as given below in case of Life Assured surviving to the end
of the specified durations:
For policy term 9 years : 15% of the Sum Assured at the end of each 3rd & 6th policy
year
For policy term 12 years : 15% of the Sum Assured at the end of each 3rd, 6th & 9th
policy year
For policy term 15 years : 15% of the Sum Assured at the end of each 3rd, 6th, 9th & 12th
policy year
Maturity Benefit : Payment of Single Premium (excluding extra premium, if any) along
with Loyalty Additions, if any, in case of Life Assured surviving to the end of the term of
the policy.
Surrender Value: Buying a life insurance contract is a long-term commitment.
However, surrender value is available under the plan on earlier termination of the
contract.
The Guaranteed Surrender Value shall be available after completion of atleast one policy
year. The Guaranteed Surrender Value is equal to 90 per cent of the Single Premium paid
excluding extra premium, if any, and the amount of survival benefits, if any paid earlier.
Corporation’s policy on surrenders :
In practice, the Corporation will pay a Special Surrender Value – which is either equal to
or more than Guaranteed Surrender Value. The benefit payable on surrender reflects the
discounted value of the claim amount that would be payable on death or at maturity. This
value will depend on the policy duration at the date of surrender. In some circumstances,
in case of early termination of the policy, the surrender value payable may be less than
the premium paid.
The Corporation reviews the surrender value payable under its plans from time to time
depending on the economic environment, experience and other factors.
Note : The above is the product summary giving the key features of the plan. This is for
illustrative purpose only. This does not represent a contract and for details please refer
to your policy document.
BENEFIT ILLUSTRATION :
Statutory warning :
“Some benefits are guaranteed and some benefits are variable with returns based on
the future performance of your Insurer carrying on life insurance business. If your
policy offers guaranteed returns then these will be clearly marked “guaranteed” in the
illustration table on this page. If your policy offers variable returns then the
illustrations on this page will show two different rates of assumed future investment
returns. These assumed rates of return are not guaranteed and they are not the upper
or lower limits of what you might get back, as the value of your policy is dependent on
a number of factors including future investment performance.”
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Illustration 1:
Age at entry : 35 years
Policy Term: 9 years
Mode of premium payment : Single
Sum Assured: Rs.1,00,000/-
Single Premium : Rs. 67058 /-
Total Benefit payable on death during the year
premium Guaranteed Variable Total
End of Year paid Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 to 9 67058 100000 0 0 100000 100000
Survival Benefits :
Benefit payable on survival at the end of specified year
Total Variable Total
End of premium Scenario Scenario Scenario Scenario
Year paid Guaranteed 1 2 1 2
3 67058 15000 0 0 15000 15000
6 67058 15000 0 0 15000 15000
9 67058 67058 0 24300 67058 91358
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Illustration 2:
Age at entry : 35 years
Policy Term: 12 years
Mode of premium payment : Single
Sum Assured: Rs.1,00,000/-
Single Premium : Rs. 72145 /-
Total Benefit payable on death during the year
premium Guaranteed Variable Total
End of Year paid Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 to 12 72145 100000 0 0 100000 100000
Survival Benefits :
Benefit payable on survival at the end of specified year
Total Variable Total
End of premium Scenario Scenario Scenario Scenario
Year paid Guaranteed 1 2 1 2
3 72145 15000 0 0 15000 15000
6 72145 15000 0 0 15000 15000
9 72145 15000 0 0 15000 15000
12 72145 72145 0 40800 72145 112945
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Illustration 3:
Age at entry : 35 years
Policy Term: 15 years
Mode of premium payment : Single
Sum Assured: Rs.1,00,000/-
Single Premium : Rs. 75195 /-
Total Benefit payable on death during the year
premium Guaranteed Variable Total
End of Year paid Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 to 15 75195 100000 0 0 100000 100000
Survival Benefits :
Benefit payable on survival at the end of specified year
Total Variable Total
End of premium Scenario Scenario Scenario Scenario
Year paid Guaranteed 1 2 1 2
3 75195 15000 0 0 15000 15000
6 75195 15000 0 0 15000 15000
9 75195 15000 0 0 15000 15000
12 75195 15000 0 0 15000 15000
15 75195 75195 0 60000 75195 135195
Notes :
i) This illustration is applicable to a non-smoker male/female standard (from medical, life
style and occupation point of view) life.
ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated so that they
are consistent with the Projected Investment Rate of Return assumption of 6% p.a.(Scenario 1)
and 10% p.a. (Scenario 2) respectively. In other words, in preparing this benefit illustration, it
is assumed that the Projected Investment Rate of Return that LICI will be able to earn
throughout the term of the policy will be 6% p.a. or 10% p.a., as the case may be. The
Projected Investment Rate of Return is not guaranteed.
iii) The main objective of the illustration is that the client is able to appreciate the features of
the product and the flow of benefits in different circumstances with some level of quantification.
The Maturity Benefit is the amount shown at the end of the policy term
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