Should You Choose LIC's Bhagya Lakshmi Plan, A Popular Micro Insurance Product

About LIC's Bhagya Lakshmi Plan

LIC is the public insurer Corporation of India, which is offering the Bhagya Lakshmi Plan. It is a non-linked, non-participating, micro-insurance policy. Micro-insurance is known as insurances that offer "coverage to low-income households or to individuals who have little savings".

Policy Returns and Benefits

LIC Bhagya Lakshmi, the limited premium paying term plan offers a return of 110% of the total amount of premiums payable on maturity, on Life Assured surviving to the end of the policy term. The premium referred above shall not include any taxes and extra premium if any. On the policy holder's death before maturity, 'Sum Assured on Death' will be paid; where 'Sum Assured on Death' is defined as the highest of 7 times of annualized premium or 105% of total premiums paid up to the date of death or Sum Assured. The premiums, however, will not include any taxes.

 

Eligibility Criteria

For the LIC Bhagya Lakshmi plan, the minimum entry age is 18 years, while the maximum entry age is 42 years for Premium Paying Term 5 years, and the maximum entry age is 55 years for Premium Paying Term 6 to 13 years, which is subject to Maximum Maturity Age of 65 years. The maximum maturity age for the LIC Bhagya Lakshmi plan is 65 years, which will depend on the Premium Paying Term.

Sum Assured and Premium Paying Term

The Minimum Sum Assured is Rs. 20,000, and the Maximum Sum Assured is Rs. 50,000. The Sum Assured is calculated in multiples of Rs. 1,000. The Minimum Premium Paying Term for the policy is 5 years, while the Maximum Premium Paying Term is 13 years. The Policy Term is counted as Premium Paying Term + 2 years. According to the policy term, "Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly mode during the premium paying term of the policy".

Grace period

Additionally, a grace period of 30 days will be allowed for payment of monthly premiums and 60 days for other modes of premium payments from the date of the first unpaid premium. LIC informs, "If less than one year's premiums have been paid and any subsequent premium be not duly paid, all the benefits under the policy shall cease after the expiry of grace period from the date of first unpaid premium and nothing shall be payable."