LIC Bima Account I
Plan No. 805 | UIN: 512N263V01
LIC Bima Account I Plan 805 is a non-linked, without-profit insurance savings plan that was introduced by the Life Insurance Corporation of India (LIC) on February 2, 2011. It offers policyholders a combination of insurance cover and a savings plan with guaranteed returns and additional potential returns. However, this plan was withdrawn from sale on November 24, 2013, making it a discontinued product now.
Introduction to LIC Bima Account I Plan 805
LIC Bima Account I was designed as a straightforward savings and insurance plan with no requirement for medical examinations, making it accessible and easy to purchase. It is a non-linked plan, meaning the returns are not affected by market fluctuations.
The premiums paid by the insured, after deductions for charges, are credited to a separate Policyholder’s Account. This account accrues guaranteed interest of 6% per annum throughout the policy term, with possibilities of additional bonus interest depending on the plan’s overall experience.
Key characteristics of this plan include simplicity, liquidity with loan facilities, guaranteed minimum returns, transparent charges, and risk cover. The policy term ranges from 5 to 7 years.
Launch and Withdrawal Dates
- Launch Date: 2nd February 2011
- Withdrawal Date: 24th November 2013
LIC discontinued the sale of this plan after almost three years, and no new policies under this plan have been accepted since the withdrawal date. However, in-force policies will continue under the terms agreed at inception until maturity or claim.
Eligibility and Premium Payment Modes
- Entry Age: 11 years minimum to 50 years maximum
- Policy Term: 5 to 7 years
- Premium Payment Terms: Yearly, half-yearly, quarterly, or monthly modes (monthly only via Electronic Clearing System—ECS)
- Sum Assured: Generally 10 to 20 times the annual premium, depending on age and other factors
The plan allowed the payment of regular premiums along with optional top-up premiums that do not increase risk cover but enhance the policyholder’s account balance and returns.
Benefits of LIC Bima Account I Plan 805
Maturity Benefit
At the end of the policy term, if the policyholder survives, the balance in the Policyholder’s Account, which includes premiums paid minus charges plus accumulated interest and any additional declared returns, is paid out as the maturity amount.
Death Benefit
In the unfortunate event of the policyholder’s death during the policy term, the nominee receives the sum assured plus the balance in the Policyholder’s Account. This ensures financial protection to the family.
Guaranteed Interest
The plan guarantees a minimum interest rate of 6% per year on the Policyholder’s Account. This interest is compounded annually and credited monthly, ensuring steady accumulation. In case the policy becomes paid-up (premiums stopped but policy continued), the guaranteed interest is 5% per annum for the remainder of the term.
An additional interest rate may also be declared by LIC depending on the plan’s financial performance, providing an opportunity for higher returns.
Loan Facility
A loan facility becomes available after the policy completes its first anniversary. The loan amount can be up to 60% of the current balance in the Policyholder’s Account, providing liquidity when needed without surrendering the policy.
Top-up Premiums
Policyholders can make additional payments over and above the regular premiums through ‘Top-up Premiums.’ These top-up amounts are credited to a separate top-up premium account with minimal charges and also earn interest. However, these do not increase the insurance cover.
Other Features
- No Medical Examination: No health check-ups were required, making the plan easy to purchase.
- Transparent Charges: Deductions including expense charges, mortality charges, service tax, and alteration charges are debited monthly from the regular premium account.
- Compulsory Termination: The policy is compulsorily terminated if premiums are paid for less than two years and the policy is not revived within the revival period.
- Paid-Up Option: The policy can become paid-up if premiums are stopped after at least two years, continuing with reduced benefits.
Understanding LIC Bima Account I Plan 805 Calculator
The calculator for LIC Bima Account I Plan estimates the premiums payable, account balance accrual, maturity proceeds, and loan eligibility based on inputs such as policyholder age, sum assured, premium amount, policy term, and payment frequency.
How the Calculator Works
- Premium Input: The calculator takes the annual (or other mode) premium amount.
- Charges Deduction: It deducts charges from this premium to credit the net amount to the Policyholder’s Account.
- Interest Accumulation: Applies the guaranteed 6% annual compounded interest on the account balance, credited monthly.
- Additional Returns: Estimates any additional interest that might be credited based on past declarations.
- Loan Calculation: Computes the loan amount possible after the first policy year, up to 60% of the account balance.
- Maturity Calculation: Summarizes the total amount payable at maturity after the policy term.
Importance of the Calculator
Using this tool helps prospective and existing policyholders to:
- …Estimate expected returns from the plan.
- …Plan the premium payments according to affordability.
- …Understand how additional top-up premiums can impact savings.
- …Evaluate loan and liquidity benefits before maturity.
- …Make informed decisions about continuing, surrendering, or reviving the policy.
Many websites offer LIC Bima Account I Plan calculators built on official LIC formulas, ensuring accuracy and reliability.
Charges Involved in LIC Bima Account I Plan 805
The following charges were deducted monthly from the Policyholder’s Regular Premium Account:
- Expense Charge: To cover the administrative expenses of LIC.
- Mortality Charge: For the insurance cover risk.
- Service Tax Charge: Applicable taxes as per government law.
- Alteration Charges: For any change in the policy terms initiated by the policyholder.
These charges affect the net premium amount credited to the Policyholder’s Account, impacting the final maturity amount.
Revival and Surrender
- Revival: Allowed within 12 months from the first unpaid premium date (FUP). During revival, a guaranteed interest of 5% p.a. is credited to the policy.
- Paid-Up: The policy becomes paid-up after two years of premium payment and non-payment thereafter, with reduced benefits but interest credited at 5%.
- Surrender: Policyholders could surrender the policy before maturity and receive the account balance after deductions. However, surrender value might be lower than maturity proceeds.
Using the calculator, one can also estimate the surrender value according to timing and policy conditions.
Comparisons and Considerations
Compared to other LIC plans available during the same period, Bima Account I Plan 805 had the following distinctions:
| Feature | LIC Bima Account I Plan 805 | Traditional Endowment Plans |
|---|---|---|
| Medical Examination | Not required | Usually required |
| Guaranteed Interest Rate | 6% p.a. guaranteed | Varies, often lower with bonuses |
| Policy Term | Short (5 to 7 years) | Longer terms (10, 15, 20 years) |
| Loan Facility | Available after 1 year, up to 60% account balance | Available, but terms vary |
| Additional Top-up Premiums | Allowed without increase in risk cover | Not always allowed |
| Charges Transparency | Clear monthly deductions | Charges embedded in premium calculation |
| Risk Cover | Basic term insurance cover | Often combined with savings and bonuses |
This plan primarily appealed to conservative investors seeking guaranteed returns with insurance cover and liquidity in a short time frame.
How to Use the LIC Bima Account I Plan 805 Calculator
Step-by-step guide for using the calculator:
- Enter Age: Policyholder’s age at entry.
- Select Policy Term: From available terms (5 to 7 years).
- Choose Payment Mode: Yearly, half-yearly, quarterly, or monthly.
- Provide Sum Assured: According to LIC rules, usually 10-20 times the annual premium.
- Input Premium Amount: Annual or mode premium.
- Results: The calculator outputs expected maturity amount, death benefit, loan eligibility, and interest earned.
Frequently Asked Questions
What is LIC Bima Account I Plan 805?
It is a non-linked, without-profit savings and insurance plan by LIC offering guaranteed interest and insurance cover without medical tests.
When was LIC Bima Account I Plan 805 launched?
It was launched on February 2, 2011.
Is LIC Bima Account I Plan 805 available for purchase now?
No, it was withdrawn from sale on November 24, 2013.
What is the minimum and maximum policy term?
The policy term can be from 5 to 7 years.
What is the guaranteed interest rate on this plan?
The guaranteed interest rate is 6% per annum, compounded annually.
Can I get a loan on this policy?
Yes, loans up to 60% of the account balance are available after the first policy year.
Conclusion
LIC Bima Account I Plan 805 was a practical insurance savings plan focused on simplicity, guaranteed returns, and insurance cover without the need for medical exams. With features like guaranteed 6% interest, loan availability, and optional top-ups, it provided flexibility to policyholders.
Although now withdrawn from the market, understanding this plan and its calculator helps policyholders and researchers comprehend LIC’s product innovations and offerings.