The world we live in is rather unpredictable and is constantly being ravaged by several natural and manmade disasters. When living under such threats, individuals relying only on their salaries and small savings isn’t beneficial for them at all. This is where a life insurance policy like the Bima Diamond comes into play.
Coming from LIfe Insurance Corporation of India, one of the country’s most oldest and most prestigious insurance companies in India, this Bima Diamond Life Insurance Plan is a non-linked plan which offers the combined benefit of savings as well as protection, while also providing financial coverage to the life insured’s beneficiaries in case the he/she sees an untimely death.
Eligibility Conditions for LIC Bima Diamond Life Insurance Plan:
Below is the eligibility criteria one needs to meet to apply for LIC Bima Diamond Insurance plan:
|Minimum Entry Age||14 years|
|Maximum Entry Age||50 years for a 16-year policy term 45 years for a 20-year policy term 41 years for a 24-year policy term|
|Maximum Maturity Age||66 years for a 16-year policy term 65 years for 20 and 24-year policy terms|
Policy Terms and Sum Assured under LIC Bima Diamond Plan:
|Policy Term||16, 20, and 24 years|
|Premium Payment Term||10 years for a 16-year policy term 12 years for a 20-year policy term 15 years for a 24-year policy term|
|Premium Payment Frequency||Monthly, Quarterly, Half-yearly, and Yearly (Payments can only be made on ECS and SSS modes only)|
Note: The Life Insurance Corporation Bima Diamond Plan also offers extended cover periods for its policyholders. The maximum extension available is exactly half of the actual policy term as chosen by the policyholder. The extension periods are 8, 10, and 12 years respectively for 16, 20, and 24 year policy terms. The extension period comes into effect after the elapsing of the initial policy term.
Key features of Life Insurance Corporation Bima Diamond Insurance Plan:
The Bima Diamond plan by Life Insurance Corporation comes with plenty of key features and benefits for the policyholder’s perusal. Here are some of them listed out for you:
|Minimum Sum Assured||Rs.1,00,000|
|Maximum Sum Assured||Rs.5,00,000|
|Tax Benefit||Available based on Section 80C and 80CCC of the Income Tax Act, 1961|
|Loan Facility||Available after premium payment for the first 3 years|
|Grace Period||15 days for monthly payment frequency and 1 month for quarterly, half-yearly, and yearly frequencies|
|Free Look Period||15 days from the date of receipt of the policy|
|Policy Revival||Available. Should be done within 2 years from the date of first unpaid premium|
|Auto-cover period||6 months from the date of First Unpaid Premium (FUP) if premiums are paid for three full years 2 years from the date of First Unpaid Premium (FUP) if premiums are paid for five full years|
Benefits available under Life Insurance Corporation Bima Diamond Plan:
The Bima Diamond life insurance plan comes with plenty of benefits. Here’s all the benefits explained for you.
- Death Benefit:
Death benefit is the benefit paid to the beneficiaries in case the policyholder dies during the policy tenure.
- If death occurs within the first five policy years the actual Sum Assured on Death will be paid to the nominee.
- If death occurs before maturity date but after five policy years, Sum Assured on Death along with any applicable Loyalty Addition will be paid to the nominee. In this case, the payable death benefit will not exceed more than 105% of all the premiums paid as of the death date of the person assured. Also, the premium, as specified above, will not include any additional amount charged during the underwriting process, rider premiums, or the applicable taxes.
- If death occurs during extended period of the policy, a total amount equal to about 50% of the Basic Sum Assured will be paid.
- Maturity Benefit:
The Bima Diamond policy offers a maturity benefit if the person assured survives till the maturity date of the policy. Upon maturity, the person assured will receive the Sum Assured on Maturity along with any applicable Loyalty Additions.
In this policy’s case, the Sum Assured on Maturity is 55% of the Basic Sum Assured in the policy for a 16-year policy term, and 40% of the Basic Sum Assured for 20 and 24-year policy terms.
- Survival Benefit:
The Bima Diamond also offers a survival benefit if the person assured survives for certain duration as specified in the policy document. In such a case, a fixed percentage of the Basic Sum Assured will be paid. Below is a table that lists out the survival benefit payment schedule for different timelines.
|Policy Term||4th year||8th year||12th year||16th year||20th year|
- Riders available for Bima Diamond policy:
The Bima Diamond policy by Life Insurance Corporation of India comes with two rider options for the policyholder. They are:
- LIC Accidental Death and Disability Benefit Rider: If a policyholder opts for this rider, they will be paid an additional amount that is equal to the Accidental Benefit Sum Assured to the nominees when the person assured dies due to an accident. If the person assured suffers an accidental permanent disability within 180 days from the occurrence of the accident, an amount equal to Accidental Benefit Sum Assured will be payable in regular monthly installments over a period of 10 years. Also, if an accident occurs any payable future premiums will be waived the accidental benefit rider while premiums for the basic sum assured will also be waived. This rider can either be taken during the inception of the policy or before the premium payment term is over.
- LIC New Term Assurance Rider: If a policyholder opts for this rider, the nominees will be paid an additional amount about the same as the Term Assurance Rider Sum Assured when the person assured succumbs to death. The sum assured is only payable if it is functional at the time of the person assured’s death. This policy, again, can be included to the main policy at the time of inception.
- Free Look Period:
The LIC Bima Diamond plan comes with a free look period of 15 days, which a policyholder can use to figure out if they are satisfied with the terms and conditions they have been offered. In case, they don’t like the plan, they can cancel the policy by stating the reason for cancellation. Once the company receives the request, it will cancel the plan and return any premium paid.
Before returning the premium, however, the company will deduct a proportionate risk premium for the duration of the cover along with costs for stamp duty, medical examination, and the like.
- Policy Surrender:
This policy can be surrendered by the policyholder at given point of time. The only prerequisite to this is that premiums must be paid for at least three consecutive years. Once the policy is surrendered, the company will pay an amount that is equal to the guaranteed surrender value or the special surrender value, whichever is higher.
- Policy Loan:
Bima Diamond policyholders are also offered a policy loan facility wherein they can avail a loan by using the sum assured as collateral. The loan is only available if premiums are paid off the first three years of the policy term. Also, the maximum loan available will not exceed the surrender value mentioned under the policy. For inforce policies, the maximum loan available is up to 90% of the surrender value, while the loan amount for paid-up policies can go up to 80% of the surrender value.
- Auto-cover Period:
The Bima Diamond policy also offers cover for a certain duration even if premiums aren’t paid. Here are the coverage details:
- An auto-cover period of 6 months is provided from the date of First Unpaid Premium (FUP), provided that full premiums have been paid for a minimum of three consecutive years and less than five years.
- An auto-cover period of 2 years is provided from the date of First Unpaid Premium (FUP), provided that full premiums have been paid for a minimum period of five consecutive years.
- Grace Period:
A grace period of one month (30 days) is provided for payment of premiums pertaining to quarterly, half-yearly, and yearly modes, while the same remains at 15 for monthly payment mode. The policy lapses in case no premium is paid within the expiry of the grace period.
- Revival Policy:
If the policy lapses due to non-payment of the premium within the grace period, the policy can still be revived under one condition. The condition is a revival request should be sent to the insurance company within 2 consecutive years of first unpaid premium. Also, the company reserves the right to reinstate the original terms, modify the conditions, or outright reject the application for revival.
- Exclusions under LIC Bima Diamond Insurance Policy:
The policy will void in the following two cases:
- If the person assured, irrespective of whether he/she is sane or insane, commits suicide within the first 12 months of the inception of the policy, no claim from the nominees will be entertained. In such a case, the company is only liable to pay a maximum of 80% of the premiums paid. This is exclusive of any extra amount charged due to underwriting charges or rider premiums.
- If the person assured, irrespective of whether he/she sane or insane, commits suicide within 12 months of policy revival, an amount that is higher of 80% of the premiums paid or the surrender value is payable. This again doesn’t take into account any extra amount charged by the underwriter for any reasons.
- Rebates in LIC Bima Diamond Insurance Policy:
The Bima Diamond policy offers rebates for those who opt for higher mode and high-risk cover policy.
Rebate on mode:
|Monthly and quarterly mode||Nil|
|Half-yearly mode||1% tabular premium|
|Yearly mode||2% tabular premium|
Rebate on higher sum assured:
|Basic Sum Assured||Rebate per Rs.1000 Basic S|
|Rs.1,00,000 to Rs.1,80,000||Nil|
|Rs.2,00,000 to Rs.4,80,000||2.50|
How to apply for a claim under LIC Bima Diamond Plan?
Applying for a BIMA Diamond plan claim is rather simple. To begin with, the claimant needs to submit the following documents to the insurance company. These documents include:
- Original policy document
- Claim forms
- NEFT details for quick money transfer to the bank account
- Proof of death of the person insured/proof of title
- Medical documents for any treatment taken by the person assured before death
In the case of accidental death, following documents need to be submitted by the claimant:
- Certified FIR copy
- Certified police report
- Postmortem report which lists the cause of death
- Newspaper cuttings, if the accident is reported
- Copy of the person insured’s driving license if he/she was driving at the time of accident
- Sub-divisional magistrate’s final verdict on the cause of death
- If no police report is filed, statements of eyewitnesses or hospital reports
- Hospital treatment report
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GST of 18% is applicable on life insurance effective from the 1st of July, 2017