If you’re someone who’s already secured the basics – term insurance, emergency fund, retirement planning, and now you’re looking for a substantial, conservative wealth-building tool that also gives you periodic cash flow, let me introduce you to LIC Bima Shree.
This isn’t your average insurance plan. With a minimum coverage of ₹10 lakhs (yes, that’s the starting point), LIC Bima Shree is designed specifically for high-net-worth individuals and serious savers who want the safety of guaranteed returns combined with the potential for loyalty bonuses.
What Makes LIC Bima Shree Different?
LIC Bima Shree (Plan 848) is a money-back plan, but think of it as a sophisticated wealth accumulation tool with built-in liquidity. Unlike regular endowment plans where you wait until the end to get your money, this plan gives you cash payouts during the journey while continuing to build your final corpus.
Here’s the elegant structure:
During the policy term: You receive periodic “survival benefits” (money-back payouts) at specified years, perfect for funding specific goals like your child’s postgraduate education or a major purchase.
At maturity: You get a lump sum that includes the remaining sum assured plus guaranteed additions that have been accumulating year after year, plus any loyalty additions LIC decides to give.
Throughout: Your family stays protected with life cover, so you’re not sacrificing protection for savings.
The Triple Advantage: Guaranteed Additions, Loyalty Additions, and Money-Back
What sets Bima Shree apart is its three-layer benefit structure:
1. Guaranteed Additions – Your Locked-In Growth
Every single year during your premium payment period, LIC adds a guaranteed amount to your policy. These aren’t “maybe” bonuses that depend on market performance, they’re guaranteed.
For example, in earlier versions, you might get ₹50 per ₹1,000 of sum assured for the first 5 years, then ₹55 per ₹1,000 for the remaining premium-paying years.
What this means for a ₹20 lakh policy:
- First 5 years: ₹1,00,000 added per year = ₹5,00,000
- Next 5 years (at ₹55 rate): ₹1,10,000 added per year = ₹5,50,000
- Total guaranteed additions after 10 years of premium payment: ₹10,50,000
These guaranteed additions become yours permanently and get paid out along with your maturity benefit.
2. Loyalty Additions – The Bonus Layer
On top of guaranteed additions, LIC may declare loyalty additions based on the plan’s overall performance. Think of this as your share of LIC’s profits from managing this plan’s funds.
While not guaranteed in advance, LIC has historically been consistent with loyalty additions on premium plans like this. These additions boost your final payout significantly.
3. Money-Back Benefits – Periodic Cash Flow
At specific policy anniversaries, you receive a percentage of your basic sum assured as a survival benefit. This gives you liquidity while your policy continues.
The exact percentages vary by policy term:
- 14-year term: Money-back at specified intervals
- 16, 18, 20-year terms: Typically 25-45% of sum assured at later policy years
Here’s something smart: if you don’t need the money when it’s due, you can defer these survival benefits and LIC will pay you interest on them. This gives you flexibility to time your cash flows based on actual needs.
How the Limited Premium Structure Works
One of the most attractive features of LIC Bima Shree is that you don’t pay premiums for the entire policy term.
The formula is simple: Premium Paying Term = Policy Term minus 4 years
Let’s see this in action:
| Policy Term | Premium Paying Term | Premium-Free Years |
|---|---|---|
| 14 years | 10 years | 4 years |
| 16 years | 12 years | 4 years |
| 18 years | 14 years | 4 years |
| 20 years | 16 years | 4 years |
What this means: For a 20-year policy, you pay premiums for 16 years, then enjoy 4 years of premium-free coverage while your guaranteed additions keep accumulating and you continue receiving survival benefits. Your life cover never stops.
A Real-Life Scenario
Meet Rajesh, a 40-year-old entrepreneur running a successful manufacturing business. He already has term insurance covering his family adequately. Now he wants to build a substantial corpus for his twin daughters’ higher education and eventual weddings.
What Rajesh does:
- Chooses LIC Bima Shree with ₹30 lakh sum assured
- Selects 16-year policy term (matures when he’s 56)
- Pays premiums for 12 years (till age 52)
What happens:
Years 1-12 (Age 40-52): Rajesh pays annual premiums. Every year, guaranteed additions of approximately ₹15-16.5 lakhs get added to his policy (₹50-55 per ₹1,000 of ₹30 lakhs).
Years 13-16 (Age 52-56): No more premium payments, but his coverage continues. His policy keeps earning benefits.
Around Year 12-14: He starts receiving survival benefits (money-back payouts). Let’s say he gets ₹7.5 lakhs when his daughters turn 18 – perfect timing for their undergraduate education expenses.
Year 16 (Age 56): Maturity benefit arrives:
- Remaining sum assured (after earlier money-backs): ~₹10-15 lakhs
- Accumulated guaranteed additions: ~₹1.5-2 crores
- Loyalty additions: Additional bonus (variable)
- Total maturity proceeds: Potentially ₹2+ crores or more
This substantial corpus now funds their postgraduate education abroad, weddings, or Rajesh’s own retirement supplementation.
Who Should Seriously Consider LIC Bima Shree?
This plan isn’t for everyone. It’s specifically designed for:
High-net-worth individuals who can comfortably afford the premiums on a ₹10 lakh+ policy and want conservative, guaranteed growth.
Business owners and professionals with variable income who want to park surplus earnings in a disciplined savings vehicle that also provides life cover.
Those who already have term insurance and are looking for a wealth accumulation tool, not just basic protection. If you haven’t secured pure term cover yet, do that first.
People who value guaranteed returns over market-linked volatility. If stock market swings keep you awake at night, Bima Shree’s guaranteed additions offer peace of mind.
Parents planning for multiple goals – the periodic money-back benefits help fund different milestones (education, marriage, business start-up) at different times rather than having all money locked until the end.
Conservative investors seeking capital protection plus modest growth without exposure to equity or mutual fund risks.
The Four Policy Term Options
You have flexibility in choosing your policy term based on your age and goals:
14-Year Term (10-year premium payment)
Best for:
- Younger individuals (can join up to age 55)
- Medium-term goals like a child’s undergraduate education
- Those who want shorter commitment
16-Year Term (12-year premium payment)
Best for:
- Balancing premium affordability with adequate accumulation
- Planning for late-career supplementation
- Most popular option for the 40-50 age group
18-Year Term (14-year premium payment)
Best for:
- Long-term wealth building
- Retirement planning for those in their late 30s-40s
- Maximizing guaranteed additions accumulation
20-Year Term (16-year premium payment)
Best for:
- Maximum wealth accumulation
- Comprehensive retirement planning
- Those who can join between age 25-45
- Building a substantial legacy corpus
Enhancing Your Coverage with Riders
While the base plan is comprehensive, you can add optional riders for additional protection:
Accidental Death and Disability Benefit Rider Extra payout if death or disability is due to an accident. Essential for business owners and frequent travelers.
Critical Illness Rider Lump sum on diagnosis of specified critical illnesses like cancer, heart attack, stroke, kidney failure. Medical emergencies can’t derail your financial plans.
Premium Waiver Rider If you suffer total permanent disability, LIC waives all future premiums while your policy continues with full benefits. Your family’s financial security doesn’t depend on your earning ability.
New Term Assurance Rider Additional pure term coverage at low cost if you need higher death benefit without increasing the savings component.
Some riders have combination limits, so discuss with your LIC advisor which ones you can combine.
The Flexibility You’ll Appreciate
Survival Benefit Deferment
Don’t need the money-back payout when it’s due? No problem. You can defer it and LIC pays you interest. This is incredibly useful when:
- Your planned expense gets delayed
- You want to maximize accumulation
- Tax planning suggests deferring income to a different year
Policy Loan Facility
After a few years and once your policy has surrender value, you can take a loan against it. The policy continues, bonuses keep adding, but you get liquidity for emergencies or opportunities.
Surrender and Paid-Up Options
Life changes. If you can’t continue premiums:
- Surrender: Get the surrender value after paying minimum required premiums
- Paid-up: Stop paying premiums, policy continues with reduced benefits
Neither is ideal, but they provide flexibility if circumstances change.
Understanding Your Returns
Let’s be realistic about returns. LIC Bima Shree isn’t designed to beat equity markets or give you 12-15% returns. That’s not its purpose.
What it offers:
- Guaranteed component: The guaranteed additions give you certainty
- Loyalty additions: Boost your overall IRR, typically bringing total returns to 5-7% range
- Tax benefits: Premiums qualify for Section 80C deduction, maturity is usually tax-free under Section 10(10D)
- Risk-free growth: No market volatility, no fund value fluctuation
- Capital protection: You won’t lose your principal
When you factor in tax savings and the insurance cover you’re getting alongside, the effective returns become more attractive than they appear on paper.
The Premium Commitment
Let’s be upfront: this is a substantial financial commitment. With a minimum sum assured of ₹10 lakhs, your annual premium will typically be in the range of ₹80,000 to ₹1.5 lakhs depending on your age, term chosen, and payment mode.
Before you commit, ask yourself:
- Can I comfortably afford this premium for the entire premium-paying term without straining my budget?
- Do I have adequate emergency funds (6-12 months expenses) already set aside?
- Do I already have sufficient term insurance to cover my family’s protection needs?
- Is this premium a small enough portion of my income that I won’t need to surrender prematurely?
- Are my financial goals aligned with the policy term and money-back structure?
If you answered “yes” to all five, you’re a good candidate for Bima Shree.
Tax Benefits – The Cherry on Top
On Premiums: Premiums paid qualify for deduction under Section 80C up to ₹1.5 lakhs per year, reducing your taxable income.
On Maturity/Death Benefits: Typically tax-free under Section 10(10D), subject to conditions. This means the entire maturity corpus comes to you without tax deductions.
Important caveat: Tax laws change. The current rules are favorable, but always consult a tax advisor for your specific situation and verify the latest provisions.
Making Your Decision
LIC Bima Shree occupies a unique space in the insurance landscape. It’s not:
- A pure protection tool (that’s what term insurance is for)
- A high-return investment (mutual funds might give better returns, with higher risk)
- A short-term savings plan (you need commitment)
What it IS:
- A comprehensive wealth-building + protection combo
- A disciplined savings vehicle with guaranteed growth
- A liquidity provider through periodic payouts
- A legacy-building tool with capital protection
- A conservative option for HNIs who value certainty
Next Steps
If LIC Bima Shree sounds aligned with your goals:
- Get a detailed illustration from a licensed LIC advisor showing exact premiums, guaranteed additions, projected loyalty additions, and maturity values based on your age and chosen sum assured.
- Compare policy terms – See how 14, 16, 18, and 20-year options differ in premium, accumulation, and money-back schedule.
- Evaluate riders – Determine which additional protection makes sense for your situation.
- Review official documents – Read the LIC Bima Shree sales brochure, Customer Information Sheet, and policy document thoroughly.
- Verify eligibility – Ensure you meet age and health requirements for your chosen term.
- Assess liquidity needs – Understand when survival benefits will be paid and if they align with your planned expenses.
- Calculate tax impact – Factor in Section 80C deductions and tax-free maturity when comparing with other investment options.
Important Disclaimer: This guide is designed to help you understand LIC Bima Shree better. However, insurance and financial planning are highly personal decisions. The information here is educational and not financial advice.
For accurate premium quotes, current guaranteed addition rates, loyalty addition history, complete terms and conditions, exclusions, and personalized guidance based on your financial situation and goals, please consult a licensed LIC advisor and refer to official LIC documentation. Product features, rates, and benefits may change with newer product versions.
Remember: The best financial product is one that aligns with your goals, fits comfortably in your budget, and that you can maintain consistently over the long term. Bima Shree is powerful – but only if it’s the right fit for you.