India’s Life Insurance Corporation (LIC) has launched Bachat Plus, a non-linked, participating individual life assuranOptionings plan. The applicants may either pay the premium in a lump sum (single premium) or avail of the 5-year limited premium paying option. The applicants may either pay the tip in a lump sum (single premium) or avail of the 5-year little bonus paying Option.
With the taxpayers searching for options to save tax, this close-ended plan – available for sale for a maximum period of 180 days – would not only provide the tax-saving option u/s 80C. Still, it would also provide an ideal opportunity for people availing of the single premium option to avail of the LTC Scheme benefits.
Premium Payment Options
There are two options, each under single and limited premium plans. Under the single premium plan, Option A provides a Sum Assured on Death of 10 times the tabular premium for the chosen Basic Sum assured. OptioOptionovides a Sum Assured on Death of 1.25 times the tabular premium.
Death Benefits
On the other hand, Option 1 provides a Sum Assured on Death of 10 times the tabular premium for the chosen Basic Sum Assured under the limited premium plan. Option 2 provides a Sum Assured on Death of 7 times the tabular premium.
Survival Benefits
The survival benefit will be the Guaranteed Sum Assured on Maturity, i.e., the Basic Sum Assured. As it’s a participating plan, Loyalty Addition may also be there, provided the policy has completed five years and all the premiums are paid.
Age of Entry
The minimum entry age under the single premium plan is 90 days (completed) for Option A and Option B. In contrast, Option A’s maximum access period is 44 years (nearer birthday), and Option B’s 70 years (closer birthday).
Under the limited premium plan, the minimum entry age is 90 days (completed) for Option 1 and 40 years (nearer birthday) for Option 2. In contrast, the maximum access period is 60 years (closer birthday) for Option 1 and 60 years (nearer birthday) for Option 2.
Age at Maturity
The minimum age at maturity will be 18 years. Under the single premium plan, the maximum age at maturity will be 65 years (nearer birthday) for Option A and 80 years (closer birthday) for Option B. Under the limited premium option, the maximum age at maturity will be 75 years (nearer birthday) for Option 1 and 80 years (closer birthday) for Option 2.
Policy Term
The minimum policy term that may be opted for is ten years and a maximum of 25 years under all the options, except for the age range of 41 years to 44 years under the single premium Option A, where the policy term may be availed between 10 years and 16 years.
Maturity & Life Covera
While the rate of return on maturity is not very significant, the main benefit is the life cover of up to 10 times the premium paid, which would remain intact for the entire policy term without any chance of getting lapsed.
Tax Benefits
Moreover, by availing of the single premium option, people up to 44 years of age may help ofromeither the 80C or the LTC Scheme benefit.
