LIC Micro Bachat Insurance Plan No 851 – Review

LIC Micro Bachat Insurance

LIC Micro Bachat Insurance Plan 851 is a first insurance policy launched by LIC in 2019. It is a regular premium, Non- linked, Participating Endowment Micro Insurance Plan, which offers a combination of protection and savings. This plan provides financial assistance for the family in case of unfortunate death of the policyholder during the policy term and a lump sum amount at the time of maturity for the surviving policyholder. The plan also takes care of liquidity needs via loan facility.

After a long time, LIC has introduced microinsurance plan. Microinsurance plan offers coverage to low-income individuals who have small savings. LIC Micro Bachat Insurance Plan provides coverage up to 2 Lakh. The minimum basic sum assured by this plan is Rs.50000.

Here is complete information about LIC Micro Bachat Insurance Plan 851 including key features, eligibility, benefits, and premium.  At the end, we will review this plan and try to figure LIC Micro Bachat is worth for Investment?

Also Read – Top 5 Best LIC Policy for 2018 -19

LIC Micro Bachat Insurance Plan No. 851 

Key Features 

Key features of LIC Micro Bachat Plan is given below.

  • It is a regular premium, non-linked, participating endowment microinsurance plan.
  • Any healthy individual with an age group of 18 to 55 years can purchase this plan.
  • No medical examination is required for buying this policy.
  • This insurance plan offers risk coverage and savings.
  • The tenure of this policy is between 10 to 15 Years.
  • A Loan can be availed during the policy term after three policy years.
  • Optional accidental and disability riders available with this plan.
  • Sum assured from Rs.50000 to 2 Lakh.
  • Income tax benefits under section 80 C is available for the premium payment.
  • The amount received during maturity is tax-free.
  • One can purchase multiple LIC Micro Bachat Policies but total coverage cannot exceed 2 Lakh.

Who is eligible to take LIC Micro Bachat Insurance Plan No. 851?

The eligibility criterion for this insurance plan is given below.  

  1. Minimum Basic Sum Assured – Rs. 50,000
  2. Maximum Basic Sum Assured per life – Rs. 200,000
  3. The Basic Sum Assured shall be available in multiples of Rs.5,000/-
  4. Minimum Age at entry – 18 years (completed)
  5. Maximum Age at entry – 55 years (nearer birthday)
  6. Policy Term – 10 to 15 years
  7. Premium Paying Term – Same as Policy Term
  8. Maximum Age at Maturity – 70 years (nearer birthday)
  9. Risk Commencement – Immediate 

Benefits available under LIC Micro Bachat Insurance Plan No. 851

Maturity Benefits

On the life assured surviving to the end of the policy term, provided all due premiums have been paid, “Sum Assured on Maturity” along with Loyalty Addition, if any, shall be payable. Where “Sum Assured on Maturity” is equal to Basic Sum Assured.

Death benefits

On the death of the Life Assured during the policy term provided all due premiums have been paid:

  1. On death during the first five years: “Sum Assured on Death” shall be payable.
  2. On death after completion of five policy years but before the date of maturity: “Sum Assured on Death” and Loyalty Addition, if any, shall be payable.

Where “Sum Assured on Death” is defined as the highest of either 10 times of annualised premium or Sum Assured on Maturity or Absolute amount assured to be paid on death.

Premium Table LIC Micro Bachat Insurance Plan No. 851 & Benefit Example

The premium table of LIC Micro Bachat Plan 851 is given below. The premium amount will depend on your age, policy term and sum assured. The premium rates given in the table below are per Rs.1000 basic sum assured. The premium rates is exclusive of applicable taxes.

LIC Micro Bachat Premium Table

Example 1 – If a 25 years person is taking 15 years plan. He/she needs to pay Rs.51.60 for every Rs.1000 sum assured. Suppose insurance plan of 2 Lakh is purchased, the yearly premium amount would be Rs.10320 + GST.

Example 2 – If a 45 years person is taking a 10 years plan. He/she needs to pay Rs.87.60 for every Rs.1000 sum assured. If insurance coverage is of 1 Lakh, the yearly premium amount would be Rs.8760 +GST.

Benefit Example

Let’s try to understand this plan with benefit example given on the LIC website. As per illustration given on the LIC site, suppose someone opt for micro bachat plan at the age of 35 years with policy term of 15 years with 1 Lakh coverage. The premium amount in this case would be Rs.5116 Yearly.

LIC Micro Bachat Example

Scenario 1 – Suppose in above case, policy holder dies during first five years of policy term. His nominee would get basic sum assured 1 Lakh.

Scenario 2 – If policy holder dies after 10 years of policy term. His nominee would get sum assured along with loyalty addition. In above case it would be 1 Lakh + Rs.6500 (Loyalty Addition).

Scenario 3 – If policy holder survive during policy years. At the time of maturity policy holder will get sum assured along with loyalty addition. In above case it would be 1 Lakh + Rs. 11500 (Loyalty Addition).

LIC Micro Bachat Insurance Plan No 851 Review

On evaluating LIC Micro Bachat Insurance Plan 851 based on various factors I can make out following points.

  • LIC Micro Bachat Plan is Micro Insurance Plan. This means it is mainly launched for low-income group. However, to purchase insurance coverage of 1 Lakh at the age of 25 years one need to pay annual premium of Rs.5000. This means it is costly plan and common man may not be able to afford it.
  • One should not club insurance and investment together. Still if you purchase this policy and survive till maturity you are likely to get return in the range of 4 to 5%.
  • Under this plan, loyalty addition is not payable in the first five policy years. So, if policy holder dies within 5 years from the commencement only basic sum assured is payable.
  • Optional rider is positive part of this policy. However, additional rider always comes additional premium.

Please note that the maximum sum assured under LIC Micro Bachat Insurance policy is Rs. 2 Lakh. This sum assured is not enough. The value of 2 Lakh after 15 years (policy term) will be very less. The Premium paid for this policy is very high compared to typical term plan. In this value, you can get an insurance cover of Rs.50 Lakh or above.

If you are looking for risk cover Pradhan Mantri Jeevan Jyoti Bima Yojana offers risk cover of Rs.2 Lakh at an annual premium of Rs.330, which is much cheaper than this policy.

I hope I have done my job with a sense of your satisfaction, now it is up to you to either invest in LIC Micro Bachat Plan or not. As per me one should avoid this plan.

For more information you can visit LIC website.

Article by Raviraj

Raviraj is the man behind moneyexcel.com. He is graduate in finance, engaged in blogging since 6 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

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