InvestorQ : What is LIC Bima Jyoti Policy, and should I invest?
Sam Eswaran made post

What is LIC Bima Jyoti Policy, and should I invest?

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swati Bakhda answered.
2 months ago
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This policy is a new life insurance plan launched by LIC. It is a non-linked, non-participating, limited premium payment insurance plan.

Features:
Non-Linked: This simply means it is not a ULIP but a traditional insurance plan.
Non-Participating: You will get to know about the maturity value at the time of taking the policy.
Policy Term: 15-20 years
Premium Payment Term: Minimum term shall be 5 years. In case the policy term is 15 years, PPT shall be 10 years, and for 20 years, it shall be 15 years.
Sum Assured: Minimum amount is Rs 1 lac, and there is no upper limit for investment.
The loan option on the scheme shall be available after two years.
Age: 18 years to 75 years.

Maturity benefit under the plan shall be the sum of basic sum assured and accrued guaranteed additions. Basic sum assured will be known to you when taking policy and guaranteed additions will accrue to the policy at Rs 50 per Rs 1000 of sum assured every year.

So, if your basic sum assured is Rs 100,000 your policy will accrue Rs 5000 every year. However, you will receive the total amount only at maturity.

The death benefit under the scheme will be the sum assured on death and accrued guaranteed additions. Guaranteed additions will be calculated as the above, whereas the sum assured on death shall be the higher of the following:
125% of Basic Sum Assured
Seven times the annualized premium
105% of all the premiums paid to date.
The returns under this scheme will fall between 6-7.5%, which is too low for investment with such a long maturity. I find restricted merit in this plan, and if you are looking to add insurance cover, you should buy a simple term insurance plan. This plan is not beneficial considering the time horizon, as there are better options available such as mutual funds, fixed deposits, etc. 

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