LIC New Bima Shree Insurance Plan No 848 – Should you invest?

LIC New Bima Shree Insurance Plan No 848 – Should you investLIC New Bima Shree Insurance Plan No 848 – Should you invest?


LIC has launched its new money back plan, LIC Bima Shree Insurance Plan No. 848 on 16th March, 2018. LIC Bima Shree is a non-linked, with profits, limited premium payment money back insurance plan. LIC Bimas Shree Plan is replica of Jeevan Shiromani except for few changes, hence we can term this as “Mini Shiromani”. LIC keep playing with different names with few changes to attract investors. LIC agents are putting tag line for this plan as “an exclusive solution for elite people”. What are the features of LIC Bima Shree Insurance Plan No. 848? How much money, one would get on pre-defined intervals from LIC Bima Shree Insurance Plan? Should you invest in LIC Bima Shree Insurance Plan No. 848?

Also Read: LIC's new Jeevan Shiromani Insurance Plan – Should you opt?

Features of LIC Bima Shree Insurance Plan No. 848


This money back plan from LIC comes with some exciting features.

1) This is non-linked insurance plan and with profits.

2) This insurance plan is limited premium payment plan. However the risk coverage would be there for the entire policy term.

3) This money back plan would become paid-up insurance plan immediately after completion of 2 year. In all other LIC plans, the plan becomes paid-up only after 3 years.

4) Guaranteed additions of Rs 50 for every Rs 1,000 sum assured for first 5 years and Rs 55 for every Rs 1,000 sum assured from 6th year onwards.

5) Loyalty additions after 5 years onwards.

6) There are 5 optional riders available in this plan.

7) There are options to defer survival benefits and defer death benefits by nominee.

8) One can surrender this insurance plan after 2 years.

9) Loans available on this insurance plan after 2 years.

10) Income Tax Benefits available u/s 80C of income tax act.

11) This plan unique no. is UIN: 512N316V01

Who is eligible to take LIC Bima Shree Insurance Plan No. 848?


Here is the eligibility criterion of this insurance plan.

1) Minimum age of entry is 18 years.

2) Maximum age of entry is 55 years. However the maximum age of maturity should be 69 years. Hence maximum age of entry would also depend on tenure of the plan.

3) Minimum Sum Assured is Rs 10 Lakhs. Means this is for High Middle class to High Networth Individuals (HNIs).

4) Maximum Sum Assured – No limit

5) Policy available for tenure of 14 years, 16 years, 18 years and 20 years.

6) Premium Payment Term is 4 years less than the policy term. Means if you are opting for 20 years plan, you need to pay premiums only for 16 years, however risk coverage would be there for full term of 20 years.

7) Date of commencement of risk is immediate from policy date.

What is Sum Assured on Death in this Insurance Plan?


Sum Assured on Death is highest of the following:

a) 10 times of your annualized premiums

b) 125% of basic sum assured

c) Sum Assured on Maturity.

What is Guaranteed Additions under this plan?


1) First 5 years of the plan – Accrued Guaranteed Additions would be Rs 50 per every Rs 1,000 sum assured.

2) 6th year onwards – accrued Guaranteed Additions would be Rs 55 per every Rs 1,000 sum assured.

Benefits available under LIC Bima Shree Insurance Plan No. 848


There are several benefits available under LIC Bima Shree Insurance Plan No. 848.

1) Death Benefits


a) If death occurs within 5 years from the policy date, Sum Assured on Death + Accrued Guaranteed additions of Rs 50 for every Rs 1,000 sum assured would be paid to the nominee.

b) If death occurs after 5 years from the policy date, Sum Assured on Death + Accrued Guaranteed additions of Rs 50 for every Rs 1,000 sum assured for first 5 years + Guaranteed additions of Rs 55 for every Rs 1,000 sum assured from 6th year would be paid to the nominee.

Also Read: SBI Life Launches Poorna Suraksha Insurance Plan – Should you consider this plan?

2) Survival Benefits


Survival benefits would be paid as follows:

a) For 14 years policy – 30% of basic sum assured would be paid on 10th and 12th year of the policy.

b) For 16 years policy – 35% of basic sum assured would be paid on 12th and 14th year of the policy.

c) For 18 years policy – 40% of basic sum assured would be paid on 14th and 16th year of the policy.

d) For 20 years policy – 45% of basic sum assured would be paid on 16th and 18th year of the policy.

If you observe, the higher the policy term, the higher the basic sum assured %age paid to you as money back.

3) Maturity Benefits


Whatever paid in survival benefits would get deducted from sum assured and balance would be paid on maturity.

a) For 14 years policy – Balance of 40% of basic sum assured + Accrued Guaranteed Additions + Loyalty Addition (if any) would be paid.

b) For 16 years policy – Balance of 30% of basic sum assured + Accrued Guaranteed Additions + Loyalty Addition (if any) would be paid.

c) For 18 years policy – Balance of 20% of basic sum assured + Accrued Guaranteed Additions + Loyalty Addition (if any) would be paid.

d) For 20 years policy – Balance of 10% of basic sum assured + Accrued Guaranteed Additions + Loyalty Addition (if any) would be paid.

4) Five Optional Riders available in this plan


Following are the optional riders available in this plan. Policy holder can choose option (a) or (b) and cannot choose both.

a) Accidental Death and disability benefit rider

b) Accidental Death Benefit Rider.

c) New Term Insurance Rider.

d) Critical Illness Benefits rider.

e) Premium waiver benefit rider

What are the Critical illness Benefits available in LIC Bima Shree Money back Plan?


Critical illness benefits are available which are optional in this plan. Below are the 15 critical illness that are covered as part of the plan.

1) Cancers of specified severity

2) Open chest CABG

3) Myocardial infarction

4) Kidney failure which requires regular dialysis

5) Major organ / bone marrow transplant

6) Heart Stroke resulting in permanent symptoms

7) Permanent paralysis of limbs

8) Multiple sclerosis with persisting symptoms

9) Aortic Surgery

10) Blindness

11) Third degree burns

12) Open heart replacement / surgery for heart valves

13) Benign Brain Tumor

14) Primary pulmonary hypertension

15) Alzheimer’s disease

Benefits under Critical Illness Coverage


If diagnosed with any of the critical illness indicated above, there is 30 days period is given to understand the severity of the critical illness. If survived beyond 30 days, insured would get 10% of Basic Sum Assured. If the insured is not survived within 30 days of diagnosing the critical illness, no benefit is payable under this critical illness coverage. There are several other terms and conditions attached to this coverage.

What is Premium Payment Term under LIC Bima Shree Insurance Plan No. 848?


In simple terms, one need to pay premium for 4 years less compared to the policy tenure.

1) For a 14 year policy, one needs to pay premium for 10 years only.

2) For a 16 year policy, one needs to pay premium for 12 years only.

3) For an 18 year policy, one needs to pay premium for 14 years only.

4) For a 20 year policy, one needs to pay premium for 16 years only.

Are there any Premium Rebates available in this plan?


Yes, below are the premium rebates available in this plan.

1) If the premium is paid half yearly, 1% of tabular premium rebate available in this plan. If the premium is paid yearly, 2% of tabular premium rebate available in this plan.

2) If the basic sum assured considered is between Rs 20 Lakhs to Rs 49 Lakhs, 0.3% of BSA is given as high basic sum assured rebate. If the sum assured is over Rs 50 Lakhs, 0.5% of the BSA is available as high sum assured rebated.

What are the Premiums in this Insurance Plan?


Here is the premium charts indicated by LIC.

Premium chart of LIC New Bima Shree Insurance Plan No 848

LIC Bima Shree Insurance Plan No. 848 explained with an example


Mr. Rahul, aged 30 years has taken this insurance plan for Rs 10 Lakhs Sum Assured and for 20 years tenure. The premium payable is approx. Rs 70,266 per annum.

1) Mr.Rahul unfortunately dies after 4 years. His nominee would get Basic Sum assured + Guaranteed Additions i.e. Rs 10 Lakhs + Rs 2 Lakhs = Rs 12 Lakhs.

2) Mr.Rahul unfortunately dies after 10 years completion. His nominee would get Sum assured + Guaranteed Additions i.e. Rs 10 Lakhs + Rs 2 Lakhs (GA for first 5 years) + Rs 2.75 Lakhs (GA after 5 years)= Rs 14.75 Lakhs.

3) Mr.Rahul survives till the end of the policy. He would get 45% basic sum assured on 16th year and 18 year each + on maturity 10% of basic sum assured and Guaranteed Additions and loyalty additions would be paid.

Means, Mr. Rahul would get Rs 4.5 Lakhs on 16th year, Rs 4.5 lakhs on 18th year and on maturity Rs 13.75 Lakhs (10% of basic sum assured is Rs 1 Lakh; Guaranteed additions for 20 years – 10.75 Lakhs; Loyalty addition of Rs 200 per Rs 1,000 sum assured is estimated for Rs 2 Lakhs)

Also Read: Affordable & Best Health Insurance Plans for 2018

Should you invest in LIC Bima Shree Insurance Plan No. 848?


Let us see the Pros and Cons in this insurance plan before we conclude.

Pros:  This insurance plan comes with guaranteed additions of 5% for first 5 years and 5.5% for the rest of the term. Loyalty Additions payable on maturity which is approx. Rs 200+ for every Rs 1,000 Sum assured. This insurance plan would become paid-up plan immediately after completion of 2 years (against the regular LIC policies which would become paid up after 3 years). This can be termed as Mini Jeevan Shiromani.

Negative points: This plan is not suitable poor or middle class as the sum assured starts from Rs 10 Lakhs. There are no in-built riders and all 5 riders given are optoina. Means, you need to pay additional premiums if you add such riders. Low Returns from LIC plans.

You can refer more info on the LIC link here.

Conclusion Summary: This can be termed as Mini Jeevan Shiromani plan. Some of the unique features of the insurance plan are good. However one should ask themselves what they are expecting from this insurance plan. LIC insurance plans would provide anywhere between 5% to 6% annualized returns (considering 5.5% guaranteed additions in this plan). Is this what you are expecting? If you don’t believe in equity or mutual funds or stock markets, go ahead and consider this insurance plan. However if you are expecting highest returns than just 6%, there are several high return investment plans like Mutual Funds and Stocks. If you still want to go for low risk options, you can invest in PPF and Bank FD’s which would still offer higher returns.  

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Suresh

LIC New Bima Shree Insurance Plan No 848

The Author

Suresh KP

Suresh KP i.e. me have written 1,800+ articles on this blog. I love doing analysis on various Best Investment Plans like mutual funds, Stocks, IPO's, NCD Bonds, Insurance products. If you like our blog, you can share some of the good articles on your Facebook or Twitter. This would be the BIGGEST gift which you would be giving to us.

5 Comments

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  1. I started BIMA Shree policy 10lahks just 2 months now ,l like to invest in mutual funds LIC broker told if invest in mutual funds we have pay tax above 25 present and no insurance,after reduct the tax it’s not come much different the maturity amount.

  2. Hi Suresh,

    Thank you for your always interesting and informative articles.

    I need your suggestion on my LICs to close any one of those:
    I have Jevan anand, Saral and Chaya LICs.

    I have been in Jeevan Anand from last 8 years, In Saral from last 7 years and Chaya from last 5 years.

    Now I am planing to close any one of those. But, I am unable to decide on this. Could you please suggest me on this:

    1. Jeevan Anand – Sum 6,00,000, Vested Bonus 2,40,600, Premium Paying Term 20 Yrs,
    Policy Term 71 Yrs.

    2. Jeevan Saral – Sum Assured 5,00,000. Premium Paying Term 16 Yrs, Policy Term
    16 Yrs.

    3. Chaya – Sum Assured 4,00,000. Vested Bonus 69,200, Premium Paying Term 18 Yrs,
    Policy Term 18 Yrs.

    Please suggest which one better to close.

    Thank you,
    Karthikeya.

  3. Hi Suresh,

    I am planning to surrender my LIC jeevan anadh plan which i figured like a ULIP plan which does not have good coverage in terms of insurance.

    am paying rs.2k per month for the policy and I would like to go with one term insurance for rs.1cr and route the rest of the amount to some mutual funds.

     

    Do you think this is a better decision? (i have been in Jeevan anadh policy for the last 5+ years)

  4. Hi Suresh,

    As usual great info at a single place.

     My query is will the amount recieved be taxable:

    1. In case the Person dies during tenure (will the family have to pay tax on amount and if yes at which rate Noninee or applied person’s slab)

     

    2. In case the tenure is completed (say 20 yrs) the Tax will be paid at end of year at that time on prevailing tax slab qualification and rates or will it be paid year on year during policy tenure as the interest or benefits are added.

    1. Hi SP Singh, The maturity amount or death benefit received by nominee is exempted u/s 10(d). 

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