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Life Insurance Corporation of India (LIC) launched a new plan ‘Micro Bachat’ in February this year. This is the first time it has introduced a micro insurance plan, providing coverage of up to Rs 2 lakh.
It is a regular premium, non-linked, participating endowment plan, offering a combination of protection and savings.
This product is primarily targeted at low-income group individuals and families. For example, to get a cover of Rs 1 lakh, a 35-year-old has to invest Rs 5,220 per annum.
A healthy person in the age group of 18-55 can avail of this policy without undergoing any medical examination. The minimum and maximum sum assured under the policy is between Rs 50,000 to Rs 2 lakh, and the term of the policy is 10-15 years.
The policy can be surrendered after payment of one full year of policy premium. Loyalty additions would be paid if premiums are paid for five full years.
Maturity benefit
In case the life assured survives till maturity and has paid all premiums, he or she would be paid the sum assured along with loyalty additions. Here, the ‘sum assured on maturity’ is equal to the basic sum assured.
If the policy holder dies during the first five years of the policy term, the ‘sum assured on death’ would be paid to the nominee. If the death happens after completion of five years but before maturity, then a ‘sum assured on death’ plus loyalty additions, if any, would be paid.
Optional cover
The policy holder can buy optional riders such as the Accidental Death and Disability Benefit by paying an additional premium along with the policy.
Loan facility
If premiums are paid for three years, loan up to 70 per cent of the surrender value can be availed of for policies that are in force.
Auto cover
Another key feature of this policy is auto cover. If the policy holder could not pay the premium regularly after completion of three years, LIC offers an auto cover period of six months, before which the unpaid premium has to remitted.
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