LIC Bima Shree Policy vs Jeevan Shiromani Plan

• Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
• Claim up to Rs. 1,50,000 deduction under section 80C**
• Choose between annual and monthly premium payment options

Life Insurance Corporation of India, also known as LIC, offers a range of life insurance products with varied benefits and features. The diverse product suite helps the company to cater to the coverage needs of its large customer base. In this article, we will review the key features of LIC’s Bima Shree Plan and LIC’s Jeevan Shiromani Plan. Read on to know which money-back insurance policy you should opt for.

LIC’s Bima Shree Plan

LIC’s Bima Shree Plan is a with-profit, limited premium payment, non-linked, money-back life insurance policy. The policy serves as a savings-cum-protection instrument. The Bima Shree plan is specially catered towards high net-worth individuals (HNIs). In the event of the policyholder’s death during the policy term, this policy will provide financial support to the concerned individual’s beneficiaries. In addition to offering a maturity benefit at the completion of the policy term, the Bima Shree Plan offers periodic payouts in the form of survival benefits. Thus, this policy can help policy buyers plan for future milestones in their lives with ease.

Features of the LIC’s Bima Shree Plan

• Death Benefit: If the policyholder succumbs to an untimely death during the first five policy years, the death sum assured and accrued guaranteed additions will be paid. If the individual passes away after 5 years, the death sum assured, loyalty additions, and accrued guaranteed additions will be paid as the death benefit.
• Survival Benefits: Based on the policy term that one has opted for, survival benefits, which amount to a percentage of the basic sum assured, will be paid on certain pre-specified policy years.
• Maturity Benefit: At the completion of the policy term, the maturity sum assured, loyalty additions, and accrued guaranteed additions will be paid to the policyholder.
• Riders: Individuals purchasing this policy can also opt for riders offered by LIC. The riders that can be purchased with this policy include LIC’s Accidental Death and Disability Benefit Rider, LIC’s Accident Benefit Rider, LIC’s New Term Assurance Rider, LIC’s New Critical Illness Benefit Rider, and LIC’S Premium Waiver Benefit Rider.
• Eligibility: In order to purchase this policy, the minimum age of the life assured should be 8 years. The maximum age at entry ranges between 45 years and 55 years, based on the policy term opted for. The maximum age that a policyholder can be at maturity is 69 years.
• Policy Term: Policy buyers can opt for a policy term of 14 years, 16 years, 18 years, or 20 years.
• Sum Assured: To purchase this policy, one must opt for a minimum sum assured of Rs.10 lakh.
• Loan against Policy: Once the policy has acquired a surrender value, the policyholder can avail a loan against the policy. For in-force policies, a maximum of 90% of the surrender value of the policy can be availed as a loan, while 80% of the surrender value can be availed as a loan for paid-up insurance plans.
• Income Tax: Policyholders can claim tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961 once they purchase this policy.

LIC’s Jeevan Shiromani Plan

LIC’s Jeevan Shiromani Plan is a with-profit, non-linked, limited premium payment, money-back life insurance policy that serves as a savings instrument, in addition to offering protection benefits to the policyholder. This policy is designed by LIC to cater to the needs of high net-worth individuals specifically. A unique benefit of this policy is that it comes with an inbuilt critical illness benefit. Thus, if the policyholder happens to be diagnosed with any critical illness that is specified in the policy brochure, the insurer will offer a certain payout to the policyholder. The policy offers financial protection to the policyholder’s dependents in case of an untimely eventuality. In addition, the Jeevan Shiromani Plan also offers regular payouts in the form of survival benefits and a maturity benefit at the completion of the policy term.

Features of LIC’s Jeevan Shiromani Plan

• Death Benefit: If the life assured passes away within 5 years of purchasing the policy, the insurer will pay the death sum assured along with the accrued guaranteed additions to the nominee. If the concerned individual passes away after the first five policy years, the insurer will pay the death sum assured, loyalty additions, and accrued guaranteed additions to the nominee.
• Survival Benefit: The insurer will pay survival benefits to the policyholder during the policy term. The amount that will be paid as the survival benefit will vary based on the policy term and the sum assured that was opted for.
• Maturity Benefit: The insurer will pay the maturity sum assured, loyalty additions, and accrued guaranteed additions to the policyholder at the end of the policy tenure.
• Inbuilt Critical Illness Benefit: If the individual is diagnosed with any pre-specified critical illnesses, a lump sum benefit, which will amount to 10% of the basic sum assured, will be paid to the concerned individual.
• Riders: Policy buyers can customise the coverage of the Jeevan Shiromani Plan by opting for riders offered by LIC. The individual can opt for a maximum of three riders.
• Eligibility: To purchase the Jeevan Shiromani Plan, the policy buyer has to be at least 18 years. The maximum age at entry will vary based on the policy term selected.
• Sum Assured: Policy buyers purchasing this policy must opt for a minimum sum assured of Rs.1 crore.
• Policy Term: Individuals who are purchasing this policy can choose a tenure of 14 years, 16 years, 18 years, or 20 years.
• Policy Loan: Policyholders can avail a loan against this policy if their policy has acquired a surrender value.
• Income Tax: Individuals can claim tax benefits under Section 80C and Section 10(10D) of the Income Tax Act for premiums paid and benefits received, respectively.

Which Should You Choose?

LIC’s Bima Shree Plan and Jeevan Shiromani Plan are both money-back life insurance products. These plans are ideal for individuals who wish to opt for a high sum assured. The benefits offered by these policies also allow policyholders to plan for significant events in their lives. Further, both policies also give policyholders the option to avail a loan against the policy, thus helping them pay for any immediate financial expenses that might arise.

The key difference between both plans is that LIC’s Jeevan Shiromani Plan comes with an inbuilt critical illness benefit, which provides an additional payout in case the concerned individual was to be diagnosed with a critical illness.

Given that both policies offer attractive features and benefits, you, as a prospective policy buyer, should purchase a policy after assessing your needs, the needs of your dependents, liabilities, investments/savings, and premium payment ability. Make sure to also familiarise yourself with the terms and conditions of both policies in order to make an informed decision.