LIC of India launches Bachat Plus, may be taken to avail LTC Scheme benefit

by Jeremy


The applicants may either pay the premium in lump sum (single premium) or may avail the 5-year limited premium paying option.

The Life Insurance Corporation (LIC) of India has launched Bachat Plus, a non-linked, participating, individual life assurance savings plan. The applicants may either pay the premium in lump sum (single premium) or may avail the 5-year limited premium paying option.

With the taxpayers searching for options to save tax, this close ended plan – available for sale for a maximum period of 180 days – would not only provide the tax-saving option u/s 80C, but would also provide an ideal opportunity for people availing the single premium option to avail the LTC Scheme benefits.

Premium Payment Options

There are two options each under the single premium and limited premium plans. Under the single premium plan, Option A provides a Sum Assured on Death of 10 times the tabular premium for the chosen Basic Sum Assured, while Option B provides a Sum Assured on Death of 1.25 times the tabular premium.

Death Benefits

On the other hand under the limited premium plan, Option 1 provides a Sum Assured on Death of 10 times the tabular premium for the chosen Basic Sum Assured, while Option 2 provides a Sum Assured on Death of 7 times the tabular premium.

Survival Benefits

The survival benefit will be the Guaranteed Sum Assured on Maturity, i.e. the Basic Sum Assured. As it’s a participating plan, Loyalty Addition may also be there, provided the policy has completed 5 years and all the premiums are paid.

Age of Entry

The minimum age of entry under the single premium plan is 90 days (completed) for both Option A and Option B, while the maximum age of entry is 44 years (nearer birthday) for Option A and 70 years (nearer birthday) for Option B.

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Under the limited premium plan, the minimum age of entry is 90 days (completed) for Option 1 and 40 years (nearer birthday) for Option 2, while the maximum age of entry is 60 years (nearer birthday) for Option 1 and 60 years (nearer birthday) for Option 2.

Age at Maturity

The minimum age at maturity will be 18 years, while under the single premium plan, the maximum age at maturity will be 65 years (nearer birthday) for Option A and 80 years (nearer birthday) for Option B. Under the limited premium option, the maximum age at maturity will be 75 years (nearer birthday) for Option 1 and 80 years (nearer birthday) for Option 2.

Policy Term

The minimum policy term may be opt for is 10 years and maximum 25 years under all the options, except for the age range of 41 years to 44 years under the single premium Option A, where the policy term may be availed is between 10 years and 16 years.

Maturity & Life Covera

While the rate of return on maturity is not very significant, the main benefit is the life cover up to 10 times the premium paid, which would remain intact for the full policy term without any chance of getting lapsed.

Tax Benefits

Moreover, by availing the single premium option, people up to 44 years of age may avail either the 80C benefit or the LTC Scheme benefit.

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