LIC Bima Jyoti – Why should you buy it?

Features and Benefits of LIC Bima Jyoti

LIC launches new plan Bima Jyoti – Plan No 860

LIC Bima Jyoti is a non-linked, non-participating limited premium paying endowment plan.

Bima Jyoti plan can be explained in layman terms as follows, so that you can understand the plan better. Non-linked simply means the returns are NOT market linked, which means you get fixed returns. Secondly, the bonus rates are guaranteed at the beginning of the policy term and do not depend on the performance of LIC. In Bima Jyoti policy, the premium payment term is not for the full policy period hence the policyholder gets an absence from premium payment for a few years. Endowment plans offer full lumpsum payment at the end of policy term.

LIC Bima Jyoti as a new age Insurance Plan

Bima Jyoti is introduced by LIC to be at par with other similar insurance products offered in the market by private insurance companies. Often it is seen that there is rampant misleading information about LIC plans or returns in the market by private insurance companies. To overcome this gap, LIC has launched Bima Jyoti plan.

Bima Jyoti has Guaranteed addition at the rate of Rs.50 for every Rs.1000 sum assured. Hence there can be no misselling or misleading information. This is equal to 5% of interest rates offered by banks. Bank rates are coming down every financial year, therefore this plan is a relief for many investors. LIC Bima Jyoti offers a fixed rate of return for the next 20 years. In  a growing economy like India, the bank interest rates are bound to come down in the next few years. Bima Jyoti can help you keep afloat with the inflation.

Many bloggers suggest 5% interest rate is not good return on investment option, but I would like to differ. As a policy buyer these points will help you make a inforrmed decision.

The premium paid towards the policy are eligible for tax saving (income tax Sec.80c) for all the premium paying term.

The maturity returns from LIC Bima Jyoti are tax free (Income tax sec.10(10D).

You have insurance cover (normal and accidental) for the whole policy term. I agree this insurance in no match to your term cover, but we all know something is always better than nothing.

Maturity amount for the plan is calculated at the time of policy purchase, hence there is no ambiguity over the profit from this plan.

Now let us look at an example to help you understand the plan better.

LIC Bima Jyoti Illustration sample

Mr.Amar aged 25 buys LIC Bima Jyoti for 10 Lakhs Sum Assured for a premium paying term of 15 years with policy term 20 years.

• Yearly premium: Rs.78549 /-
• Normal Life cover: 10 Lakhs
• Accidental Life Cover: 10 Lakhs
• Total Approximate Premium paid: Rs.12,06,508/-
• Approximate Tax Saved for 15 years (assuming 30% slab) : Rs.3,69,375/-
• Total Tax free Guaranteed returns: Rs. 20,00,000/-
• Total profit from this Plan: 11,62,867 (Tax Free)

PS: Don’t forget the life cover of Rs.20 Lakhs for 20 years.