LIC’s new plans 2014-New Bima Bachat (No.816)

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• Hi Basavaraj,

  I read your blog post and its quite interesting.

  I want your help to invest around of money for my little kid in any one of the good options(LIC, NSC. POST kishan vikas patra etc...) for at around 10 years.

  Can you please help me to find out the better options with max return and tax benefits, you can please also suggest plan without tax benefits.

  Waiting for your response.

  Thanks,
  Chandresh

  • Chandresh-Stay away from the products you listed for 10 years long term goal.

• I invested in a few Bima Nivesh policies. One of them matured in March 2015. Single premium was 491038, sum assured was 500000, maturity amount was 673141. LIC deducted a 2% tax on the final proceeds and I am told that I will be taxed for the entire proceeds. So the tax at 30% slab comes to 201942. If I deduct the tax from the final proceeds, I really got back Rs.472199 after 5 years on a premium of Rs.491038. I made overall a loss of Rs. 18839. Is this right? Not sure why I finally ended up like this. Can you explain.

  Does Bima Bachat also falls under the same tax treatment?

  • Raguraman-Please read my earlier post about taxatin of life insurance "Tax Benefits of Life Insurance".

• sir, is it lic new bhima bhachat plan A single premium full amoun is eligeble for income tax saving und 80C

  • Srinivas-Yes.

• Can you tell me what is the IT rebate (available for AY14-15) for a single premium paid under Bima Bachat,Jeevan Shagun policy of LIC, invested after 2014 Sept ?.
  Thanks

  • Bhavsar-Sec.80C.

• Does bima-bachat-816 provides Tax rebate under 80c? Full amount of single premium or Partly?

  • Bhavsar-Yes full amount.

• Dear Basavraj,

  This is regarding my LIC Jeevan saral Policy.

  Sum Assured: Rs. 5 Lacs
  Premium for Annum : 24500/-
  Policy Term : 26 Years

  I have completed three years for above policy. From past 7-10 years I have invested so much in LIC and other private insurance and now I come to know, all traditional plans not give good returns and decided to surrender above policy. In three years premium paid amount is Rs. 73,500/- If now I surrendered the policy, I will get approximately Rs. 44,000/- I feel if I invest 23 more years I will be in huge loss. To get loyalty additions in Jeevan Saral we have to invest at least for 10 years. Again paying for another 7 years premium is good or now only I can surrender this policy ??
  Please advice.

  Regards,
  PRADEEP

  • Pradeep-Better to come out early once it completes 5 years.

• I wish to invest some money, about 50,000,for my son. I am not sure of every year investment in future, so one time investment. I also do not want along lock-in period. Please tell:
  1. Is NSC a better choice than New Beema Bachat Plan ?( If I am ready for 9 yr Beema Bacat Plan).
  2. Do I get tax rebate on - money invested as well as the amount I receive from NSC and New Beema Bachat Plan ?
  My son is eligible for both.
  Regards
  Triveni

  • Triveni-What will be tenure of this investment? Whether you are looking for investment and tax saving or only investment?

• what is your view on table 816 09 01.. I am planning to take one.. What are the benefits of the policy..

  • Alok-What is special about this plan? Single plan and expect around 6% return.

• i am a widow of 47 years of age. i have 2 sons age 19 and 21 yrs. i want to secure the future of my children in case i die early. my income is approx 6 lakh p.a. should i go for LIC or any other private insurance company so that my money is safe.i also want to know should i go for term plan or endowment plan?
  kindly advise.

  • Rachna-Please stay away from any endowment plans. First you need to buy online term insurance to the tune of around 15-20 times of your yearly income (better to include current values of future education cost of both kids). Then invest or choose a product based on time horizon and risk appetite.

• Please compare LIC Bhima Bachat and Jeevan shagun and suggest the best

  • Chandra-I feel Jeevan Shagun better.