LIC Micro Bachat Plan: Features & Benefits

Overview

LIC Micro Bachat Plan (plan no. 751) is a low-cost, traditional life insurance plan built for small savings with basic financial protection. It is a regular premium, non-linked, participating endowment plan. You can enter between the ages of 18 and 55, with a maximum maturity age of 70. The sum assured ranges from ₹1 lakh to ₹2 lakh.

If you wish to purchase an LIC (Life Insurance Corporation of India) term plan with a high sum assured, refer to our guide on Digi Term. However, if you prefer a private insurer, explore the best term insurance companies. This guide is perfect for those who want to explore the features and limitations of the LIC Micro Bachat Plan.

Are you looking for a simple LIC-backed plan that combines savings with basic life cover? LIC’s Micro Bachat Plan offers financial support for your family in case of death and a lump sum payout at maturity. However, this plan is available only for standard, healthy individuals and does not require any medical examination. The policy is an insurance product under IRDAI’s micro insurance initiative.

In this guide we break down the LIC Micro Bachat Plan in simple terms so you can understand its features, benefits, and limitations before making a decision.

Did You Know?

Micro life insurance is primarily a group-driven market, with private insurers leading group policies, while LIC dominates individual coverage. As per the IRDAI 2024–25 annual report, LIC issued about 9 lakh individual micro insurance policies with ₹354.81 crore in premiums.

LIC: Performance Metrics

Key Operational Metrics	Average of FY 22-25	Industry Average
Claim Settlement Ratio (CSR)	98.35%	98.66% (mean)
Amount Settlement Ratio (ASR)	95.48%	94.83% (mean)
Annual Business Volume (in Crore)	₹2,27,169	₹3,411.73 (median)
Amount Paid in Death Claims (in Crore)	₹19,017.6	₹195.05 (median)
Volume of Complaints per 10,000 claims	4.57	17.67 (median)
Solvency Ratio	2.00x	2.04x (median)

Note: These performance metrics come from IRDAI annual reports and LIC’s public disclosures for the overall insurer. These metrics are for the overall insurer, not just micro insurance, but they still give a fair indication of performance in this segment.

Key Insights:

A CSR above 97% reflects strong reliability, supported by LIC’s government backing and long track record.
The ASR above 90% shows balanced payouts across both small and large claims.
A premium volume well above Ditto’s recommended mark of ₹5,000 crore highlights scale and market reach. LIC is the largest life insurer in the industry and accounted for about 55% of India’s total life insurance premium income in FY 2024–25, as per IRDAI annual reports.
Total death claims paid around 100 times the industry average indicates strong payout capacity.
A complaint volume at nearly one-fourth of the industry average, despite the insurer’s large scale, points to a relatively better customer experience.
A solvency ratio above the IRDAI requirement of 1.5x confirms solid financial stability and ability to meet future claims.

Eligibility Criteria of LIC Micro Bachat Plan

Eligibility	Criteria
Minimum Entry Age	18 years
Maximum Entry Age	55 years
Policy Term	10 to 15 years
Premium Paying Term	10 to 15 years
Maximum Maturity Age	70 years
Premium Payment Modes	Yearly, half-yearly, quarterly, and monthly.

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Key Features of LIC Micro Bachat Plan

Built for Small, Practical Needs

This plan suits people who want a simple LIC-backed policy with a small savings element. With a sum assured of ₹1 lakh to ₹2 lakh, it functions more as a basic micro insurance option than a comprehensive protection plan.

Maturity Benefit Adds Value

If you survive the policy term, you receive a lump sum. This includes the basic sum assured and any declared loyalty addition, which adds a savings component to the plan.

Chance of Extra Returns

As a participating plan, it may offer loyalty additions based on LIC’s performance. This benefit becomes relevant after you have completed at least five years of premium payments.

Easy to Get Started

The plan is available for standard healthy lives without medical tests. This makes the buying process simple and accessible for many first-time policyholders.

Support If You Miss Payments

If you have paid premiums for at least three years, the policy may continue for a limited period even if you miss payments. This gives some breathing space during financial stress.

Extra Protection Through Riders

You can add an accidental death & disability benefit rider or accident benefit rider for additional cover. These riders can be added anytime during the policy term if the base policy is active and has at least five years remaining. The rider premium is capped at 30% of the base policy premium.

Loan Option for Emergencies

You can take a policy loan after paying at least one full year’s premium. This provides access to funds when you need them.

Here’s a snippet from the policy brochure about the rebates offered with the plan.

Note: The mode rebate in LIC Micro Bachat is a small discount on your premium based on how often you choose to pay. It is not a cashback or bonus. Similarly, a sum assured rebate lowers your premium slightly if you opt for a higher basic cover.

Is the Sum Assured Offered by the LIC Micro Bachat Plan Enough?

LIC Micro Bachat is not a bad plan. It is simply too small to solve what life insurance is meant to do. It offers basic support, not long-term financial security, given the rising inflation.

Limited Cover, Limited Impact: The plan is designed to be affordable, so the cover stays low. It can help with immediate expenses, but the support does not last long and fades when bigger needs arise.
No Real Income Replacement: Life insurance should replace the income of the earning member for years. This plan cannot support regular expenses, repay loans, or secure your family’s future goals.
Short-Term Relief, Not Long-Term Security: It works like a short-term cushion during a crisis. It does not provide the strength needed to support dependents over the long run.

In simple terms, Micro Bachat can help for a while, but it cannot protect your family’s future.

Drawbacks of the LIC Micro Bachat Plan

Low Life Cover: The maximum sum assured is ₹2 lakh. This amount may cover small expenses, but it cannot support income replacement, loan repayment, or long-term family needs. However, this low cover may not meet your family’s needs. Use our cover calculator to estimate the right term insurance amount for your situation.
Not Pure Protection: This plan combines savings with insurance. As a result, the cover stays limited and does not match the protection a term plan can offer.
Uncertain Loyalty Addition: The plan may offer a loyalty addition, but it depends on LIC’s performance. You should treat it as a bonus, not a guaranteed return.
Full-Term Premiums: You pay premiums regularly for the entire policy term. This creates a long commitment and reduces flexibility for many buyers.
Weak Early Exit Value: There is no surrender value in the first year. Even after two years, the payout remains low, which makes early exit unattractive.
Reduced Paid-Up Benefits: If you stop paying premiums, the policy continues in a reduced form. Both death and maturity benefits drop in proportion, which lowers overall value.

Premium Comparison

Age	10-Year Policy Term	12-Year Policy Term	15-Year Policy Term
18	₹8,722	₹7,012	₹5,380
25	₹8,727	₹7,017	₹5,385
35	₹8,761	₹7,061	₹5,439
45	₹8,923	₹7,247	₹5,664
55	₹9,388	₹7,752	₹6,233

Note: These sample premiums are illustrative and based on a ₹1 lakh sum assured. The figures are sourced from the LIC Micro Bachat policy brochure.

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Conclusion

LIC Micro Bachat is a micro insurance product available only for standard, healthy individuals. While it offers basic coverage, it is not built for meaningful financial protection or long-term flexibility.

Limited benefits with no advanced features, such as instant claim payouts or health support services.
You can opt for only one of the two riders available, and the policy lacks important rider options like waiver of premium.

If you are looking for stronger protection and flexibility, it makes sense to explore the best term insurance plans that better support your long-term financial goals.

Frequently Asked Questions

What are the LIC Micro Bachat Plan 751 details, and who is it for?

The LIC Micro Bachat Plan (Plan No. 751) is a low-cost, traditional life insurance plan that combines small savings with basic financial protection. It is designed for individuals in the informal sector or lower-income groups who want an affordable policy backed by Life Insurance Corporation of India. The plan is non-linked and participating, which means it may offer performance-based loyalty additions. It is available for standard healthy lives between 18 and 55 years, usually without a medical test. This makes it accessible to first-time buyers who want simple, disciplined savings with basic life cover.

What is the sum assured in LIC Micro Bachat Plan 751?

The LIC Micro Bachat Plan or LIC 880 Plan offers a sum assured between ₹1 lakh and ₹2 lakh. This keeps it within the micro insurance category rather than a full protection plan. While this amount can help with short-term expenses, it is not enough for income replacement, loan repayment, or long-term financial security. Many families may find this coverage inadequate for real-life needs. At Ditto, we usually suggest a term insurance cover of ₹1 to ₹2 crore for meaningful protection, as it provides a stronger financial safety net at a relatively affordable cost.

What is the eligibility age for the LIC Micro Bachat Plan?

You can enter the Micro Bachat LIC Plan between 18 and 55 years of age. The policy can continue up to a maximum maturity age of 70 years. The policy term ranges from 10 to 15 years, and the premium paying term is equal to the policy term. This means you pay premiums for the entire duration of the policy. While this keeps the structure simple, it also reduces flexibility compared to plans that allow shorter payment periods. The plan is best suited for those who can commit to consistent payments over time.

What are the premium payment modes available in the LIC Micro Bachat Plan?

The LIC Micro Bachat Plan offers four premium payment options: yearly, half-yearly, quarterly, and monthly. This gives you the flexibility to choose a mode that fits your cash flow. The premium depends on your age and policy term. For example, a 25-year-old choosing a 15-year term may pay around ₹5,385 per year for a ₹1 lakh sum assured, as per the policy brochure. While the premiums are affordable, the overall benefit remains limited due to the plan's small coverage amount.

What are the riders available with the LIC Micro Bachat Plan?

The LIC Micro Bachat Plan allows you to add one optional rider for extra protection. You can choose either the accidental death and disability benefit rider or the accident benefit rider. You cannot select both together. These riders can be added during the policy term if the policy is active and at least five years of premium payments remain. The total rider premium cannot exceed 30% of the base premium. These riders offer limited additional protection, mainly for accidental risks.

What happens if I stop paying premiums for the LIC Micro Bachat Plan?

If you stop paying premiums after at least three years, the policy converts into a reduced paid-up plan. In this case, both death and maturity benefits decrease as a percentage of the total premiums due, relative to the premiums paid. If less than one year’s premium is paid, the policy lapses after the grace period. After one year, it becomes a reduced paid-up policy. There is no surrender value in the first year, and early surrender values remain low even later. This means exiting early can result in a financial loss, so the plan works best if you continue until maturity.

How does the LIC Micro Bachat Plan compare to a term plan?

The LIC Micro Bachat Plan is not a substitute for a term insurance plan. Its maximum cover is ₹2 lakh, while a standard term plan can offer ₹1 crore or more. Micro Bachat combines savings with insurance, which limits the level of protection. A term plan focuses only on life cover and offers much higher protection at a lower cost. At Ditto, we usually recommend a term cover of ₹1 to ₹2 crore for better financial security. If your goal is income protection for your family, a term plan is the better choice.

What is LIC's claim settlement ratio, and does it apply to the Micro Bachat Plan?

LIC’s average claim settlement ratio is around 98.35% for FY 2022 to 2025, based on IRDAI reports and LIC disclosures. This shows strong overall reliability across its product range. However, this figure represents the insurer as a whole and not specifically the Micro Bachat Plan. LIC also reports a low complaint ratio of 4.57 per 10,000 claims, which is well below the industry median. These numbers indicate that LIC has a consistent track record in settling claims, which adds confidence for policyholders across its offerings.

What is IRDAI's Micro Insurance Regulation, and how does it relate to the LIC Micro Bachat Plan?

The LIC Micro Bachat Plan falls under IRDAI’s Micro Insurance Regulations, 2015. These rules aim to provide simple and affordable insurance to low-income and underserved groups. Under this framework, the maximum sum assured for individual life policies is capped at ₹2 lakh. This is why the Micro Bachat Plan offers limited coverage. The focus is on accessibility rather than high protection. Microinsurance products follow the IRDAI (Insurance Products) Regulations, 2024. For life microinsurance, also refer to the IRDAI Master Circular on Life Insurance Products.

Last updated on: 8 May, 2026