LIC Micro Bachat (751) Calculator

LIC Micro Bachat (751) Calculator

What this calculator does

LIC's Micro Bachat (Table No. 751) is a non-linked, limited-premium, micro insurance savings plan aimed at people who want life cover with small, affordable Sum Assured amounts. Two things set it apart from LIC's regular endowment plans:

• Limited premium payment. You only pay premiums for the Premium Paying Term (PPT), which is always 5 years shorter than the Policy Term - so a 15-year policy is paid up in just 10 years, even though cover continues for the full 15.
• Loyalty Addition instead of a yearly bonus. Rather than a reversionary bonus vesting every policy year, this plan shares surplus through a Loyalty Addition that only starts accruing once the policy has run a minimum number of years, and is paid out in a lump sum at maturity (or added to the death benefit if death occurs after that point).

This calculator gives you an indicative estimate of:

• the annual premium (and per-installment premium for your chosen payment mode) you would pay over the shorter Premium Paying Term
• the Sum Assured on Death - the guaranteed minimum payable if the life assured dies during the policy term
• the Loyalty Addition that accrues once the minimum qualifying duration has passed
• the total maturity benefit - Basic Sum Assured plus the accrued Loyalty Addition
• a year-by-year schedule showing how the accrued Loyalty Addition, and the benefit payable on death, grow over the policy term

based on your entry age, Basic Sum Assured, Policy Term, and payment mode.

Formula Used

Eligibility. Entry age must be between 18 and 55 years, the Policy Term between 15 and 20 years, and the age at maturity (entry age plus policy term) cannot exceed 70 years:

$$MaturityAge = EntryAge + PolicyTerm \le 70$$

Premium Paying Term. Always 5 years shorter than the Policy Term:

$$PPT = PolicyTerm - 5$$

Premium. The illustrative tabular annual premium rate (₹ per ₹1,000 Sum Assured) combines a savings component - which must recover the Sum Assured over the shorter PPT, not the full term - with a flatter, simplified-underwriting mortality component typical of a micro insurance plan:

$$BaseRate(age, PPT) = \frac{1000}{PPT} \times 0.92 + \big(1.2 + age \times 0.035\big)$$ $$AnnualPremium = \frac{SumAssured}{1000} \times BaseRate(age, PPT)$$

The annual premium is then split by your chosen payment mode (yearly, half-yearly, quarterly, or monthly), using LIC's standard modal factors (yearly 1.00, half-yearly 0.510, quarterly 0.260, monthly 0.0875):

$$InstallmentPremium = AnnualPremium \times ModeFactor$$

Sum Assured on Death. The guaranteed minimum payable immediately on death during the policy term is the higher of a multiple of the annualized premium, or the Basic Sum Assured itself. The multiple is higher for younger lives, mirroring the standard minimum death-benefit norm for protection-oriented plans:

$$Multiple(age) = \begin{cases} 10 & age < 45 \\ 7 & age \ge 45 \end{cases}$$ $$SumAssuredOnDeath = \max\big(Multiple(age) \times AnnualPremium,\ SumAssured\big)$$

Loyalty Addition. An illustrative Loyalty Addition of ₹25 per ₹1,000 Sum Assured accrues for every completed policy year beyond the first 5 years - there is no accrual for a policy that hasn't run at least 5 years:

$$LoyaltyYears = \max(PolicyTerm - 5,\ 0)$$ $$TotalLoyaltyAddition = LoyaltyYears \times \frac{SumAssured}{1000} \times 25$$

Maturity Benefit.

$$MaturityBenefit = SumAssured + TotalLoyaltyAddition$$

Note: these rates are illustrative approximations for planning purposes, not LIC's official rate card, which is IRDAI-approved and can change over time. Always confirm exact figures with LIC or an authorized agent before purchasing a policy.

How to Use

1. Enter your Age at Entry in years (18 to 55).
2. Enter your desired Basic Sum Assured (₹25,000 to ₹2,00,000).
3. Choose your Policy Term in years (15 to 20) - remember entry age plus term cannot exceed 70, and premiums are only paid for Policy Term minus 5 years.
4. Choose your Premium Payment Mode - yearly, half-yearly, quarterly, or monthly.
5. Click Calculate Benefits to see your premium, Sum Assured on Death, Loyalty Addition schedule, and total maturity benefit.

Worked Example

Suppose you are 30 years old, choose a Basic Sum Assured of ₹1,00,000, and a 15-year Policy Term, paid yearly.

The Premium Paying Term is 15 - 5 = 10 years.

$$BaseRate(30, 10) = \frac{1000}{10} \times 0.92 + (1.2 + 30 \times 0.035) = 92 + 2.25 = 94.25$$ $$AnnualPremium = \frac{1{,}00{,}000}{1000} \times 94.25 = 100 \times 94.25 = ₹9{,}425 \text{ per year}$$

Over the 10-year Premium Paying Term, total premium payable is 9{,}425 \times 10 = ₹94{,}250.

Since the entry age is under 45, the death-benefit multiple is 10x:

$$SumAssuredOnDeath = \max(10 \times 9{,}425,\ 1{,}00{,}000) = \max(94{,}250,\ 1{,}00{,}000) = ₹1{,}00{,}000$$

At maturity, Loyalty Addition has accrued for 15 - 5 = 10 years:

$$TotalLoyaltyAddition = 10 \times 100 \times 25 = ₹25{,}000$$ $$MaturityBenefit = 1{,}00{,}000 + 25{,}000 = ₹1{,}25{,}000$$