The plan offers guaranteed addition at the rate of Rs 50 per 1,000 basic sum assured (or 5 per cent) at the end of each policy year.
Amid the fall in interest rates offered by banks, the Life Insurance Corporation of India (LIC) has launched a non-linked, non-participating, individual savings plan called Bima Jyoti.
The plan offers a combination of protections and savings. While it will provide life cover in case of unfortunate death of the policyholder, it also provides guaranteed lumpsump payment at maturity.
The plan offers guaranteed addition at the rate of Rs 50 per 1,000 basic sum assured (or 5 per cent) at the end of each policy year. The minimum sum assured is Rs 1 lakh, with no upper limit. The plan term can be for 15-20 years, while premium paying term will be 5 years less than the plan term. The minimum entry age for Bima Jyoti is 90 days, while the maximum is 60 years.
The plan can be bought offline through agents or other intermediaries or online from the insurer's website. The premium can be paid yearly, half-yearly, quarterly or on a monthly basis.
At a time when interest rates are declining, the plan's tax free returns along with the life over are expected to get customers' interest.