Understanding LIC Bima Ratna (Plan 864 / 964): The Premium Guaranteed Savings Framework
LIC Bima Ratna (Plan 864) is a premium, non-linked, non-participating, individual life insurance savings plan introduced by the Life Insurance Corporation of India. Unlike traditional participating insurance plans whose returns depend on annual dividend declarations, Plan 864 stands out by offering completely Guaranteed Additions (GA) that are contractually defined. This provides savers with absolute clarity and precision in predicting their long-term wealth accumulation. It combines solid risk protection with structured periodic payouts in the form of survival money-back benefits and a final maturity corpus, making it an excellent financial instrument for securing key milestones like higher education, marriages, or retirement.
Please note that as per recent regulatory updates, LIC Bima Ratna (Plan 864) has been officially withdrawn for new policy sales starting January 1, 2025. However, millions of existing policyholders continue to pay premiums and receive contractual benefits under this plan. This premium online calculator is specifically maintained to service these existing savers, enabling them to simulate premium schedules, project Guaranteed Additions, evaluate survival payouts, and plan for their final tax-exempt maturity corpuses.
Rigid Policy Terms & Limited Premium Paying Term (PPT) Configurations
LIC Bima Ratna operates under a limited premium paying term structure where the proposer is only required to pay premiums for a specified duration, while the policy coverage and guaranteed compounding continue for the full policy term. The plan offers three rigid term-to-PPT configurations:
- Policy Term 15 Years: Premium Paying Term is strictly 11 Years. The eligible child entry age ranges from 5 years completed to a maximum of 55 years.
- Policy Term 20 Years: Premium Paying Term is strictly 16 Years. The eligible child entry age ranges from 5 years completed to a maximum of 50 years.
- Policy Term 25 Years: Premium Paying Term is strictly 21 Years. The eligible entry age starts from a tiny 0 years (90 days completed) up to a maximum of 45 years.
This limited premium feature offers extreme financial security. Once the PPT finishes, no further premium payments are required, yet the policy continues to accumulate Guaranteed Additions and provides comprehensive life coverage until the end of the term.
Eligibility & Specification Comparisons
To help policyholders quickly evaluate their specific plan eligibility parameters, the following structural matrix details the entry ages, limited PPT options, and sum assured criteria:
| Policy Term (PT) | Premium Paying Term (PPT) | Minimum Entry Age | Maximum Entry Age | Minimum Sum Assured |
|---|---|---|---|---|
| 15 Years | 11 Years | 5 Years (Completed) | 55 Years | ₹5,00,000 |
| 20 Years | 16 Years | 5 Years (Completed) | 50 Years | ₹5,00,000 |
| 25 Years | 21 Years | 0 Years (90 Days) | 45 Years | ₹5,00,000 |
The Actuarial Math: Guaranteed Additions & Survival Money-Back Payouts
Unlike traditional insurance models where returns are uncertain, Plan 864 operates on two highly predictable wealth-building mechanisms:
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Guaranteed Additions (GA) Scale: These additions build up at the end of each policy year, scaling up the longer the policy is kept in force. The rates are fixed per ₹1,000 of Basic Sum Assured:
- Policy Years 1 to 5: ₹50 per ₹1,000 Sum Assured p.a. (e.g., ₹25,000 annually on a ₹5 Lakh policy).
- Policy Years 6 to 10: ₹55 per ₹1,000 Sum Assured p.a. (e.g., ₹27,500 annually on a ₹5 Lakh policy).
- Policy Years 11 to 25: ₹60 per ₹1,000 Sum Assured p.a. (e.g., ₹30,000 annually on a ₹5 Lakh policy).
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Survival Benefits (Money-Back Schedule): Rather than locking up all capital until maturity, Bima Ratna provides liquidity by paying out 25% of the Basic Sum Assured at the end of each of the last two years of the policy term:
- Under PT 15: 25% SA at the end of Year 13 and Year 14.
- Under PT 20: 25% SA at the end of Year 18 and Year 19.
- Under PT 25: 25% SA at the end of Year 23 and Year 24.
Maturity & Death Benefit Actuarial Formulations
The payouts under LIC Bima Ratna are structured to reward persistence and provide robust protection:
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Final Maturity Benefit: Payable if the policyholder survives the complete policy term. The maturity value is computed as:
Maturity Payout = 50% of Basic Sum Assured + Accumulated Guaranteed Additions -
Guaranteed Death Benefit: Payable to the nominee immediately in case of the policyholder's demise during the term. The benefit is calculated as:
Death Benefit = Sum Assured on Death + Accumulated Guaranteed Additions
*Sum Assured on Death is contractually defined as the higher of 125% of the Basic Sum Assured or 7 times the annualized premium. Furthermore, the death benefit will never be less than 105% of the total premiums paid to date.
Value-Adding Riders & Discounts
To enhance policy yields and protection, Plan 864 incorporates valuable pricing advantages:
- High Sum Assured Rebates: LIC incentivizes larger investments by offering premium discounts (rebates) per ₹1,000 Sum Assured. For Sum Assured levels of ₹10 Lakhs up to ₹24.75 Lakhs, a discount of ₹0.50 is applied. Slabs of ₹25 Lakhs to ₹49.75 Lakhs get a ₹0.75 discount, and policies of ₹50 Lakhs and above receive a maximum discount of ₹1.00.
- Frequency Discounts: Opting for Yearly premium modes secures a 2% tabular premium discount, while Half-Yearly modes receive a 1% discount.
- Premium Waiver Benefit (PWB) Rider: Highly recommended when purchasing the policy for a child. Attaching this rider (modeled as a 3% premium surcharge) ensures that in the event of the proposer's death, all future premium requirements are waived entirely, ensuring the child's financial goals remain fully funded.
Dual Tax Optimization Benefits
LIC Bima Ratna enjoys premier tax benefits under the Indian Income Tax Act:
- Section 80C Deductions: The annual premium paid qualifies for an income tax deduction up to ₹1,50,000 p.a.
- Section 10(10D) Tax Exemption: Unlike taxable financial instruments like fixed deposits, both the periodic survival money-back benefits and the final maturity payouts are 100% tax-free, making the net yield highly competitive.
Bima Calculator - LIC Premium Tool Map
BimaCalculator hosts a comprehensive suite of actuarial tools to help you simulate across different LIC products. The following table showcases where you can find other premium calculators:
| LIC Savings Product | Product Type | Online Calculator URL Path |
|---|---|---|
| LIC Jeevan Labh | Limited Pay Participating Endowment | /lic/lic-jeevan-labh-calculator |
| LIC Jeevan Tarun | Participating Child Money-Back Plan | /lic/lic-jeevan-tarun-calculator |
| LIC ULIP / Nivesh Plus | Market-Linked Single/Regular Premium | /lic/lic-ulip-calculator |
| LIC Money Back 20/25 | Participating Periodic Money Back | /lic/lic-money-back-calculator |
LIC Bima Ratna Plan 864 - Frequently Asked Questions
Q1: What is LIC Bima Ratna Plan 864 and is it still available for new purchase?
LIC Bima Ratna (Plan 864) is a limited premium paying, non-linked, non-participating, individual life insurance savings plan designed for high-value protection and guaranteed growth. Note that the plan was officially withdrawn by LIC for new entries starting January 1, 2025. However, the calculator remains fully operational to service existing policyholders who purchased the plan prior to this date, helping them simulate their ongoing premium schedules, Guaranteed Additions, and upcoming survival payouts.
Q2: How does the Guaranteed Additions (GA) feature work under LIC Bima Ratna?
Unlike participating plans that declare variable bonuses based on annual valuation profits, LIC Bima Ratna offers completely Guaranteed Additions (GA). These additions are fixed contractually and accrue at the end of each policy year based on the following scale: ₹50 per ₹1,00,0 Sum Assured from years 1 to 5; ₹55 per ₹1,000 Sum Assured from years 6 to 10; and ₹60 per ₹1,000 Sum Assured from year 11 onwards until maturity.
Q3: What is the Survival Money-Back benefit schedule under Bima Ratna?
LIC Bima Ratna provides highly lucrative survival payouts equal to 25% of the Basic Sum Assured at the end of each of the last two years of the policy term. Specifically: for a 15-year term, payouts are received at the end of years 13 and 14; for a 20-year term, payouts are received at the end of years 18 and 19; and for a 25-year term, payouts are received at the end of years 23 and 24. The remaining 50% of the Sum Assured is paid at maturity.
Q4: What are the entry age limits and PPT options for Bima Ratna?
The plan operates on three fixed Policy Term to Premium Paying Term (PPT) structures: 15 Years Policy Term (PPT 11 Years) with entry ages between 5 and 55 years; 20 Years Policy Term (PPT 16 Years) with entry ages between 5 and 50 years; and 25 Years Policy Term (PPT 21 Years) with entry ages between 0 (90 days completed) and 45 years.
Q5: Are the returns and benefits from LIC Bima Ratna tax-exempt?
Yes. The maturity payout, including the survival money-back benefits and the accrued Guaranteed Additions, is 100% tax-free under Section 10(10D) of the Income Tax Act, provided the annual premium is less than 10% of the Sum Assured. Additionally, premiums paid are eligible for deduction under Section 80C up to ₹1.5 Lakhs per year.
Q6: What does the Proposer Premium Waiver Benefit (PWB) Rider do?
The proposer Premium Waiver Benefit (PWB) Rider can be attached to the policy by paying a small surcharge (modeled as a 3% premium loading). In the unfortunate event of the proposer's (parent/proposer) death during the premium paying term, all future premiums are waived by LIC. The policy remains fully active, Guaranteed Additions continue to accumulate, and survival and maturity benefits are paid to the nominee exactly as scheduled.