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Review: LIC Bima Bachat

By   /   June 20, 2013  /   7 Comments

Review LIC Bima Bachat

It’s an Investment + Insurance product offered by LIC. Here you pay a single premium & you will get periodic cash outflow. Here I will explain you why not to buy this product & how Investment in PPF + Online Term Insurance can beat the returns from Bima Bachat.

Policy Term:

9/12/15 years

Let’s have a look at the illustration provided on LIC Website:

Let us take the example of a policy holder who is 35 years old and takes a policy for the term of 9 years for an insurance of Rs 1,00,000/-.He pays a single premium of Rs 67058/- For full LIC Bima Bachat Policy have a look at LIC Website: Click Here.

 

Death Benefits:

End of year Total premiums paid till end of year Benefit on death during the year
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1
to
9
67058 100000 0 0 100000 100000

 

 

 

 

 

 

Survival Benefits:

End of year Total premiums paid Benefit payable on survival at the end of specified year
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
3 67058 15000 0 0 15000 15000
6 67058 15000 0 0 15000 15000
9 67058 67058 0 24300 67058 91358

 

 

 

 

 

 

Important Points:

Point 1.

Here guaranteed rate of return comes out to be 5%. (This return is based on the assumption that amount received at the end of 3rd & 6th year is reinvested).

Note: How about investing the amount in Public Provident Fund where Guaranteed returns are 8.7%

 

Point 2.

Non guaranteed rate of return (Maximum return) comes out to be 8%. (This return is based on the assumption that amount received at the end of 3rd & 6th year is reinvested)

Note: Why to go for Non Guaranteed 8% rate of return when you can get guaranteed 8.7% rate of interest from Public Provident Fund.

 

Recommendations:

If you are among those who want a guaranteed return + insurance, instead of going for LIC Bima Bachat, Invest in Public Provident Fund + On line Term Insurance.

 

If somehow your agent is still able to convince you to invest in this plan, please feel free to drop a comment or write to me at financialkundali@gmail.com & all for your good I will make sure that you do not invest in it.

 

www.financialkundali.com

www.financialkundali.com

 

Recommended Articles:

1. Public Provident Fund

2. Financial Kundali For You

 

 

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About the author

Hi My name is Hari Om Tripathi. I am an engineer by chance & a Personal Financial Planner by choice. Currently residing in Kanpur & writing full time for Financial Kundali. In case you have any query about Personal Financial Planning such a buying a MF or ULIP, going for a life insurance plan or a term plan, to surrender your policy or not or any other questions related to your Personal Financial Planning, write to me at financialkundali@gmail.com

7 Comments

  1. Vidit says:

    I invested in this plan 1 year ago. Please suggest what to do. My term is 15 years.

    • Vidit, though it’s a tough decision but i would recommend tou to surrender this policy after completion of 1 year. The guaranteed surrender value is available only after completion of at least one policy year. This value is equal to 90% of the single premium paid (excluding extra premium).

  2. Gaurav Malik says:

    How come assured return is 5 percent. My agent told me that it is 12 percent.

  3. Sneha says:

    PPF interest rate is fixed or variable.

  4. Danish says:

    I purchased this plan 3 years back. will be getting the 1st 15k soon. what should i do. should i exit this policy after taking the 15k amount. Please reply fast.

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