LIC’s structured, non-linked, non-participating endowment plan Bima Jyoti combines insurance with savings. It favors low-risk, assured profiteers. Policyholders’ financial planning requirements are met by this full plan description, features, and comparison to other whole-life insurance choices.
Overview of LIC Bima Jyoti
With LIC Bima Jyoti (Plan 860), returns are guaranteed. It’s an endowment plan that not only offers life cover but also assures a maturity benefit to the policyholder on survival. Long-term investors stand to gain from the guaranteed additions that accrue under the plan. Policies offer you the facility of paying premiums over shorter terms. For a 15-year policy, the usual premium-paying term is 10 years, which means reduced outgo with retention of cover.
Guaranteed Additions, Maturity Benefits
The guaranteed INR 50 per INR 1,000 base amount covered increases at the conclusion of each insurance year, making LIC Bima Jyoti appealing. These assured upgrades greatly increase the maturity advantage and ensure policyholders know their returns.
Death Benefit and Insurance Coverage
If the policyholder dies within the period, LIC Bima Jyoti pays the beneficiaries the insured money and any promised increases. It protects the policyholder’s family financially in adverse times. The death benefit is usually 125% of the base amount guaranteed or 7 times the yearly premium for appropriate coverage.
Whole Life Plans vs. LIC Bima Jyoti
LIC Life Insurance Jeevan Umang & Jeevan Anand ensures financial stability; on the other hand, LIC Bima Jyoti is a single-premium policy with profits for a fixed time. LIC Bima Jyoti provides some regular returns in terms of its structured endowment but not at par with whole life policies wherein there is a complete endowment with a lump sum amount at the end of the specified term and the security for the policy period.
Whole Life policies Mature at any time and are thus more expensive than LIC Bima Jyoti endowment policies. The Bima Jyoti plan with the limited premium payment option provides a handle, if some do not have whole life insurance, on their cash.
Financial Planning and Tax Benefits
Life insurance plans like LIC Bima Jyoti give Income Tax Act tax advantages, making them tax-efficient investments. Section 80C deducts premiums up to INR 1.5 lakh. The maturity and death benefits are tax-free under Section 10(10D), helping financially. The strategy optimizes savings, insurance, and taxes.