LIC Micro Bachat Plan 751: Features, Benefits and example

LIC Micro Bachat Plan 751 – Life Insurance Corporation of India (LIC) has always been at the forefront of providing innovative insurance plans tailored to the needs of diverse income groups. With its Micro Bachat Plan, LIC has introduced a revolutionary product catering specifically to individuals with modest financial means. Officially launched in November, this plan stands out due to its affordability, unique benefits, and features designed to provide financial security to the economically disadvantaged.

In this article, we will delve into the Micro Bachat Plan 751, highlighting its features, benefits, eligibility criteria, and other essential details to help you or your clients make informed decisions.

Also see: LIC Saral Pension Plan: Annuity Option Explained

Why the Micro Bachat Plan is Called the “Plan for the Poor”

The Micro Bachat Plan is known as a “Plan for the poor” because its premium structure is incredibly low, ensuring accessibility even for the lowest income groups. Unlike other plans where the premium can become a financial burden, this plan emphasizes on affordability without compromising on risk coverage or benefits.

Key Highlights of the Plan:

• No GST Charged: Unlike other LIC plans that levy a Goods and Services Tax (GST) of 4.5% on the premium, this plan exempts policyholders from GST. This exemption significantly reduces the overall premium amount, making the plan economical.
• Wide Age Eligibility: Individuals aged between 18 and 55 years can avail of this plan. Notably, it allows older individuals (up to 55 years) to participate, unlike many other plans which have a maximum entry age of 50 years.
• Auto Cover Feature: A Lifeline During Financial Hardships
• Flexible Policy Term: The policyholder can choose a term of either 10 or 15 years, allowing for flexibility based on their financial goals and requirements.

Also see: LIC Upcoming 4 New Plan

Auto Cover Feature of LIC Micro Bachat Plan

The Auto Cover feature of LIC Micro Bachat Plan 751 offers a safety net for policyholders during times of financial hardship when premium payments might not be possible. This benefit ensures that the policyholder’s family continues to receive risk coverage even if the policyholder fails to pay the premiums within the grace period.

Two-Tiered Auto Cover:

1. For Policies Between 3 to 5 Years Old:

• If the policy has completed at least three years but is less than five years old, the Auto Cover feature provides a risk cover for six months.
• This means that even if no premiums are paid for six months, the policyholder’s family will still receive the sum assured in case of any untoward incident.

2. For Policies Over 5 Years Old:

• Policies that have completed more than five years enjoy an extended Auto Cover period of two years.
• In this scenario, even if premiums are unpaid for up to two years, the nominee is entitled to receive the risk cover amount in the event of the policyholder’s demise.

This feature ensures continuous protection, giving policyholders peace of mind during periods of financial instability.

Also see: LIC New Money Back Plan 720

Eligibility Details for LIC Micro Bachat Plan 751

The LIC Micro Bachat Plan 751, designed to benefit low-income individuals, has straightforward and inclusive eligibility criteria. Below are the details:

1. Entry Age:

• Minimum: 18 years
• Maximum: 55 years

2. Policy Term:

• Options: 10 or 15 years
• Customers can choose a term based on their financial goals and the period they wish to save.

3. Sum Assured:

• Minimum: ₹1,00,000
• Maximum: ₹2,00,000

4. Premium Payment:

• For a 10-year term, premiums need to be paid for 10 years.
• For a 15-year term, premiums are paid for 15 years.

Also see: LIC Jeevan Tarun Plan 734

Sum Assured in LIC Micro Bachat Plan

The Sum Assured under LIC Micro Bachat Plan 751 is the guaranteed amount provided to the policyholder or their nominee under specific circumstances like maturity or death. Here’s what you need to know:

1. Range of Sum Assured:

• The minimum insurance amount one can opt for is ₹1 lakh.
• The maximum insurance amount allowed is ₹2 lakh.

2. Affordable Premiums:

• Opting for a sum assured does not mean paying the entire amount upfront. Instead, the policyholder contributes through small and manageable installments over the policy term.

3. Customization:

The sum assured can be chosen based on the policyholder’s financial goals and affordability, making the plan flexible and inclusive.

Also see: LIC Revised Jeevan Amar Plan 955

Loan and Surrender Options:

Policyholders can avail of loans or surrender their policies if required:

• Loan: Loans can be taken after the completion of one policy year, offering a financial lifeline in emergencies.
• Surrender: Policyholders can surrender their policy, retrieving their invested amount after applicable deductions.

Additional Rider Benefits in LIC Micro Bachat Plan.

Riders are optional benefits that enhance the protection offered by your base insurance plan. In the case of LIC Micro Bachat Plan 751, these riders can significantly boost the financial security provided to the nominee in the event of an untoward incident. Here’s how they work:

What is a Rider?

A rider is an extra layer of coverage that adds to the sum assured. For example, if you have a base sum assured of ₹1 lakh and add a rider worth ₹1 lakh, the total amount paid to the nominee in case of a claim would be ₹2 lakh.

Maximum Rider Coverage:

You can opt for rider coverage up to three times the base sum assured. For instance:

• If the base sum assured is ₹1 lakh and you opt for a rider worth ₹3 lakh, the nominee will receive ₹4 lakh (₹1 lakh base amount + ₹3 lakh rider amount) in case of an untimely death due to an accident.

Accidental Rider Example:

In the event of a policyholder’s death due to an accident, the total payout would include:

• Base Insurance Amount: ₹1 lakh.
• Accidental Rider Amount: ₹3 lakh.
• Total Payout to Nominee: ₹4 lakh.

Example of Additional Rider Benefits

Let’s take the example of Mrs. Sarita Raj, a 31-year-old policyholder. She has opted for LIC Micro Bachat Plan with the following details:

Scenario 1: Sum Assured of ₹1 Lakh

• Policy Term: 15 years
• Annual Premium: ₹5,500
• Half-Yearly Premium: ₹2,778
• Maturity Return After 15 Years: ₹1,15,000

In this case, if an unfortunate incident occurs during the policy term:

• The nominee will receive the basic sum assured of ₹1 lakh.
• If Mrs. Sarita has opted for an additional rider of ₹3 lakh, the nominee will receive the sum assured (₹1 lakh) + rider benefit (₹3 lakh), totaling ₹4 lakh.

Scenario 2: Sum Assured of ₹2 Lakhs

If Mrs. Sarita chooses a sum assured of ₹2 lakhs with an additional rider of ₹3 lakhs:

• The total payout to the nominee in case of her untimely demise will be ₹2 lakh (sum assured) + ₹3 lakh (rider benefit), totaling ₹5 lakh.

Additional Features

1. Flexibility in Premium Payment: Policyholders can choose to pay their premiums annually or semi-annually, offering convenience and adaptability to their financial circumstances.
2. Dual Purpose: Insurance and Bachat: The Micro Bachat Plan not only provides risk coverage but also acts as a Bachat instrument, ensuring a lump sum return at maturity.
3. Affordability: With no GST and low premiums, this plan ensures that even individuals with modest incomes can access life insurance and Bachat opportunities.

Advantages of the Micro Bachat Plan

1. Affordable Premiums: The absence of GST and a low premium structure make this plan highly cost-effective.
2. Extended Risk Coverage: The auto cover feature ensures continued risk protection even if premiums are not paid due to financial constraints.
3. Loan Facility: Policyholders can leverage their policy as collateral to obtain loans, addressing emergency financial needs.
4. Maturity Benefit: At the end of the policy term, policyholders receive a lump sum amount, fulfilling their financial goals such as education, marriage, or other expenses.
5. Flexibility in Policy Term: With options for 10 or 15 years, the plan caters to diverse financial planning horizons.
6. Additional Security with Riders: Riders significantly enhance the financial protection provided by the plan, offering peace of mind to the policyholder’s family.

Limitations of the Plan

While the Micro Bachat Plan offers numerous benefits, it is essential to consider its limitations:

• Lower Sum Assured: The maximum sum assured is ₹2 lakh, which might not suffice for individuals seeking higher coverage.
• Limited Maturity Returns: Compared to other investment-oriented plans, the maturity returns are relatively modest.
• Penalty on Surrender: Early surrender of the policy incurs deductions, reducing the payout amount.

Conclusion

The Micro Bachat Plan 751 is a thoughtfully designed product by LIC, addressing the financial needs of the economically disadvantaged. Its low premium, GST exemption, and unique auto cover feature make it an attractive choice for individuals seeking affordable insurance with added Bachat benefits.

Whether you’re planning for a secure future or advising clients, the Micro Bachat Plan offers a comprehensive solution that balances risk coverage and financial growth. With its focus on inclusivity and affordability, this plan underscores LIC commitment to serving every segment of society.

FAQs for LIC Micro Bachat Plan (Table No. 751)

Disclaimer: The information provided in this article about LIC Micro Bachat Plan (Table No. 751) is for general knowledge purposes only. Readers are advised to consult official LIC documents or a licensed insurance advisor for detailed policy terms and conditions. The benefits and features mentioned may vary based on individual circumstances and specific policy guidelines.