LIC Launched “Micro Insurance Plans - LIC's Bhagya Lakshmi” can this will fulfil desires of Peoples under poverty area?

Life insurance Corporation of India has launched Bhagya Lakshmi jeevan bima under micro insurance category on 29th December 2014 to complete the liability of social and rural sector defined by Insurance Regulatory and Development Authority of India. This is the non-par limited payment premium plan with guaranteed return of 110% of the amount of premiums paid.

A Customer will able to receive at the time of maturity of the plan 110% of the premiums paid excluding extra premium etc and in the case of unfortunate death customer nominee will able to receive Sum Assured.

Conditions under the plan: - Minimum sum assured under the plan is Rs. 20000/-and maximum sum assured is Rs. 50000/-. The sum assured shall be in multiple of Rs. 1000/-. Having age 18 to 55 can take this policy. Minimum premium paying term is 5 years and maximum premium paying term is 13 years. Maximum maturity age permitted under the plan is 65 years. Premium can be paid by yearly, half yearly, quarterly, monthly and through salary deduction. The grace period is allowed maximum 60 days under the plan for all premiums paying terms. The tabular premium rates are as under:-

AGE In years	TERM (PPT) in years
	7(5)	10(8)	15(13)
20	127.45	64.35	37.20
30	129.30	65.80	38.55
40	138.30	72.80	44.25
50	164.10	91.40	57.15
55	179.90	103.05	-

Sum Assured Rebates:-

Yearly mode                                  -          2% of Tabular Premium
Half-yearly mode                           -          1% of Tabular premium

Surrender Value:

The policy can be surrendered at any time during the policy term provided premiums have been paid for at least two consecutive years.

Loan: Loan is not available under the plan.

Taxes: Taxes including service tax, if any, shall be as per the Tax laws and the rate of tax shall be as applicable from time to time.

Example: - The following is the example of the plan.

Age	20
Policy Term	7
Premium Paying Term	5
Sum Assured	50000
Yearly Premium	6248

Policy Years	Premium Paid
1	-6248
2	-6248
3	-6248
4	-6248
5	-6248
6	0
7	0
Total Return	34364
Return%	2%

Conclusion: - It is displaying very wrong image of the LIC of India, as no micro insurance category persons can efforts premium payment like 6000/- per year for the sum assured of Rs. 50000/- . On the very high cost they are getting only sum assured of Rs. 50000/- and if they survive on the maturity just only two percent return they are getting. This cannot real example of micro insurance category. On spending more than 6000/- you can buy better life insurance policy from life insurers.

As insurer just wanted to fulfill the obligation of Authority, so they never care about the people who are living under poverty are in India. All life insurers know very well the category of micro insurance not profitable for them so, they just fulfilling the obligations. For this reason, micro insurance category peoples are not getting insurance on the cost that they deserves. Can Insurance Regulatory and Development Authority of India will think about it.