LIC micro insurances: All you need to know

The importance of having life insurance known to all of us. It helps you to build a financial corpus with the protection of a life cover. In this pandemic situation, if you are planning to buy a life insurance policy at low premium then the micro insurance plans may be an appropriate option for you. It is a special category of life insurance created by IRDAI. The main objective is to promote insurance coverage among economically vulnerable sections of society. The premiums of these policies are comparatively low.

Popularity

“Micro insurance plans are very popular. Due to high premiums, people from the economically weaker sections of society are often unable to opt for conventional life insurance plans. Micro insurance plans are mainly designed for those low-income groups, so that they can also cover their lives,” said Debasish Dutta, LIC agent belonging to the Million Dollar Roundtable club.

LIC’s micro plans

Life Insurance Corporation of India (LIC), the country’s largest insurer, offers a bunch of life insurance policies for the common people. New Jeevan Mangal and Micro Bachat are among them. Both micro insurance plans were launched on February 01, 2020. Take a look at these policies.

New Jeevan Mangal

LIC’s New Jeevan Mangal plan is a non-linked, non-participating, individual, life protection plan with return of premiums on maturity. You can pay the premiums either in lump sum or regularly over the term of the policy.

This plan has an in-built accident benefit which provides for double risk cover in case of accidental death.

Eligibility

Any individual between 18 years and 55 years is eligible to buy it. The maximum maturity age is 65 years.

Sum assured

The minimum and maximum sum assured is Rs 10,000 and Rs 50,000 respectively.

Policy term and premium

For regular premium the policy term is 10 to 15 years. Premiums can be paid regularly at yearly, half yearly, quarterly or Monthly mode during the policy term.

Alternatively, a single premium policy can also be bought for a term between five and 10 years.

Benefits

In the event of the death of the person insured due to any reason other than accident, a death benefit equivalent to the sum assured will be paid to the nominee of a policyholder. This amount depends on the type of policy and premiums paid.

In the case of accidental death an additional sum equal to sum assured will be paid to the nominee.

Micro Bachat policy

Micro Bachat is a regular premium, non-linked, participating, individual, life assurance plan offered by Life Insurance Corporation of India (LIC). It is a combination of protection and savings.

This plan also has an option of liquidity needs through its loan facility.

Eligibility

Any individual between 18 years and 55 years is eligible to buy it. The maximum maturity age is 70 years.

Sum assured

The minimum and maximum sum assured is Rs 50,000 and Rs 200,000 respectively.

Policy and premium term

The policy term is 10 to 15 years. Premium can be paid yearly, half yearly, quarterly or monthly depending on the policy term.

Premium

If an individual at the age of 20 bought the policy for a 15-year term and chose Rs 2 lakh as the basic assured sum, he or she has to pay Rs 9,904 as yearly premium, which is around only Rs 27 per day.

Benefits

By the time the policy is ready for payment, he would get around Rs 2.30 lakh.

In the event of the death of the person insured within five years of the commencement of the policy, the sum assured will be paid. In case the death is after five years, sum assured and loyalty bonus both will be paid to the survivor(s).