Bima Nivesh-a single premium policy is one of the shortest plans from Life Insurance Corporation of India (LIC). This policy is currently offered for 5 years and 10 years tenure and provides with tax-free returns.

The minimum sum assured for the policy is Rs 25,000 whereas the maximum amount is Rs 500,000. The minimum age eligibility for the policy is 35 years. The age of the policyholder should not exceed 75 years on maturity. Though the proposer has to sign a declaration of good health, the medical examination is not a must.

Advantage over other LIC schemes-

• If a Bima Nivesh policy of Rs 25000 is surrendered after 3 years, the policyholder gets back Rs 30,648, though the amount invested was only Rs 24,100. As compared to this, in case of other policies, you get an amount not more than a single premium even if you surrender after 3 years.
• This is the only scheme that offers discount on the premium payable, though the life cover and other benefits of this policy are calculated on the sum assured.

  Pros

  • It is one of the shortest plans from LIC offering interest-free returns.
  • The returns are very lucrative as they are exempted from tax under section 10 D.
  • The returns start from over 9% and can go beyond 10% depending on the amount and tenure.
  • The policy can be easily liquidated.
  • It is a good investment option, as a rebate is given even on the premium payable.
  • A tax rebate of 20% is allowed up to a maximum investment of Rs 60,000 under section 88.
  • LIC may pay loyalty addition and guaranteed addition apart from the sum assured, if the policyholder survives till maturity.

  Cons

  • It is restricted to individuals in the 35 -70 years age bracket.
  • To enjoy the income tax rebate, the minimum lock-in period of the policy is two years.
  • There is no loan facility on this policy from LIC. However it can be pledged with other financial institutions for a loan.

  Though there are several other investment options with similar tenure, Bima Nivesh is still preferable because of the premature encashment facility and tax benefits. Needless to say, the policy has a life cover so the nominee gets the assured sum along with the accrued bonus on the death of the policyholder.

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