LIC Bima Kavach Plan 887: Comprehensive Details, Benefits & Premium Guide
Discover everything about LIC Bima Kavach Plan 887. Explore benefits, eligibility, premium details, and why it is ideal for securing your family’s future today.
INSURANCE
Sundhari S Mahila Career Adviser – LIC Tindivanam
8/13/20269 min read
LIC Bima Kavach Plan 887: Secure Your Family’s Future with Confidence
Introduction to Financial Security
In today’s fast-paced world, securing your family’s financial future is essential. Indian middle-class families, salaried professionals, and self-employed individuals share a common goal: to keep their loved ones financially independent and protected against life’s uncertainties.
If you are looking for a reliable, trustworthy, and robust life insurance policy, the LIC Bima Kavach Plan 887 is an exceptional choice. Life Insurance Corporation of India (LIC) has always been synonymous with trust for millions of Indians. This plan is designed to bridge the gap between pure protection and long-term savings. Whether you are a first-time insurance buyer or looking to upgrade your existing portfolio, this article will walk you through everything you need to know about this policy, helping you make a confident and informed decision.
What is LIC Bima Kavach Plan 887?
The LIC Bima Kavach Plan 887 is a comprehensive, non-linked, participating, individual life insurance savings plan. At its core, the primary purpose of this policy is to offer a dual advantage: financial protection for your family in the unfortunate event of your absence, and a guaranteed lump-sum savings corpus if you survive the policy term.
As a versatile plan, it caters to the diverse needs of modern Indians. It combines the core philosophy of LIC Bima Kavach term insurance protection with the wealth-building advantages of an endowment plan. Because it is a participating plan, policyholders also receive a share of LIC’s profits as annual bonuses, making it a brilliant tool for long-term wealth creation, retirement planning, or funding a child’s education.
Key Features of the Plan
To truly appreciate the value of this policy, it is important to understand its standout features. Here is a breakdown of the LIC Bima Kavach features that make it highly sought-after:
Comprehensive Life Cover: Offers a guaranteed lump sum death benefit to the nominee, ensuring the family’s financial stability.
Dual Benefit (Savings + Protection): Unlike pure term plans, it returns a substantial maturity amount at the end of the term.
Bonus Eligibility: As a participating plan, it accrues Simple Reversionary Bonuses and a Final Additional Bonus (if applicable), which significantly boost the payout.
Flexible Premium Payments: Choose to pay premiums yearly, half-yearly, quarterly, or monthly through NACH.
Loan Facility: Offers excellent liquidity. You can avail of a loan against the policy after paying premiums for at least two full years.
Tax Benefits: Premium payments and the final payouts are eligible for tax deductions and exemptions under current tax laws.
Optional Riders: Enhance your base coverage with additional riders such as Accidental Death and Disability.
Surrender Value: The policy acquires a guaranteed surrender value after two years of continuous premium payments.
Revival Options: A lapsed policy can be revived within 5 years of the first unpaid premium.
Core Benefits of the Policy
Understanding the LIC Bima Kavach benefits will help you align this plan with your life goals.
Financial Independence for Dependents: The death benefit acts as an income replacement, ensuring your family does not have to compromise their lifestyle or borrow money for daily expenses.
Goal-Based Savings: The maturity amount can be perfectly timed to coincide with significant life milestones such as buying a house, children’s higher education, or marriage.
Wealth Compounding: With regular bonus additions declared by LIC, your money doesn’t just sit idle; it grows over the years, helping it outpace inflation.
Emergency Fund Access: The loan facility ensures that in times of medical emergencies or sudden cash needs, you do not have to liquidate your other investments.
Peace of Mind: Knowing that your hard-earned money is backed by the Government of India's sovereign guarantee provides unmatched peace of mind.
Eligibility Criteria
Before investing, it is crucial to check the eligibility conditions for LIC Bima Kavach. The plan is structured to accommodate a wide age range, subject to the chosen policy term and sum assured.
Note: The maximum sum assured is usually approved based on the policyholder’s income and age, along with the policy term selected.
Premium Details and Payment Options
The LIC Bima Kavach premium structure is designed to be pocket-friendly and flexible, with costs varying by age, policy term, sum assured, and premium frequency.
Frequency: You can pay your premiums annually, semi-annually, quarterly, or monthly. The monthly option can be auto-debited from bank accounts and may help salaried employees manage payments more easily.
Grace Period: LIC offers a 30-day grace period for yearly, half-yearly, and quarterly premiums, and a 15-day grace period for monthly premiums.
Factors Affecting Premium: The premium you pay depends on your entry age, policy term, LIC Bima Kavach sum assured, and payment frequency. A younger entry age usually results in a significantly lower premium. For example, a 30-year-old selecting a ₹10,00,000 sum assured for a 25-year term may pay an estimated ₹40,000 to ₹45,000 per year, depending on exact rates.
Rebates: LIC offers attractive rebates on higher sum assured choices and for choosing the yearly premium payment mode, which can reduce the overall premium outgo.
LIC Premium Calculator Tool
Use the calculator below to estimate your premium based on your age, desired sum assured, policy term, and payment frequency. Default values are provided for a quick look.
Detailed Breakdown of Policy Benefits
To fully understand the LIC Bima Kavach policy details, we must examine how the payouts are structured.
Death Benefit: If the policyholder passes away during the policy term, the nominee receives the “Sum Assured on Death” plus vested Simple Reversionary Bonuses and Final Additional Bonus (if any). The Sum Assured on Death is generally defined as the highest of:
7 times the annualised premium.
100% of the Basic Sum Assured.
(Note: The death benefit will never be less than 105% of all premiums paid up to the date of death.)
Maturity Benefit: Upon surviving the policy term, the policyholder receives the Basic Sum Assured along with all accumulated bonuses. This lump sum is perfect for retirement or major family expenses.
Profit Participation (Bonuses): LIC declares bonuses annually based on its valuation. These bonuses are added to your policy account and paid out either at maturity or upon death, significantly increasing the overall return on your investment.
Optional Riders Available
To make your LIC Bima Kavach term insurance and savings plan even more comprehensive, you can attach riders by paying a nominal extra premium.
LIC’s Accidental Death and Disability Benefit Rider: In case of accidental death, an additional sum assured is paid to the nominee. In the event of permanent disability due to an accident, future premiums are waived, and the sum assured is paid in monthly instalments.
LIC’s New Term Assurance Rider provides an extra layer of life cover on top of the base policy.
LIC’s Critical Illness Benefit Rider: Pays a lump sum amount upon the diagnosis of specified critical illnesses, helping you manage hefty hospital bills without breaking your savings.
Understanding Tax Benefits
One of the major attractions of life insurance in India is the tax relief it offers.
Section 80C: The premiums you pay toward this policy are eligible for deduction under Section 80C of the Income Tax Act, 1961, up to a maximum limit of ₹1.5 lakh per financial year.
Section 10(10D): The maturity amount, as well as the death benefit received by the nominee, is generally completely tax-free under Section 10(10D), subject to the conditions specified in the Income Tax Act.
(Please note: Tax laws are subject to change. Always consult a financial advisor or tax consultant for the most current rules.)
How to Buy the Policy
Purchasing this plan is a straightforward process, but doing it through a certified LIC advisor ensures you get personalised service and hassle-free claim settlements in the future.
Step-by-Step Guidance:
Consultation: Contact a certified LIC agent. An advisor will assess your financial goals, income, and liabilities.
Choosing the Parameters: Decide the Sum Assured and Policy Term based on your age and budget.
Documentation: Provide essential documents including:
Passport-size photographs.
Identity Proof (Aadhaar Card, PAN Card, Passport, etc.).
Address Proof.
Income Proof (Salary slips, ITR for self-employed).
Medical Examination: Depending on your age and the chosen sum assured, a basic medical test may be required. LIC arranges this at designated centres.
Payment and Issuance: Pay the first premium. Once underwriting is clear, the policy bond will be issued and delivered to you.
A Practical Real-Life Example
To better understand how this policy works, let’s look at a practical scenario.
Meet Ramesh, a 30-year-old IT professional. He wants to save for his retirement at age 55 while ensuring his wife and child are protected if something happens to him.
Customer Profile: Salaried, Age 30
Plan Selected: LIC Bima Kavach Plan 887
Sum Assured: ₹10,00,000
Policy Term: 25 Years (Maturity at age 55)
Estimated Premium: Approx. ₹40,000 to ₹45,000 per year for a 30-year-old with a ₹10,00,000 sum assured and a 25-year policy term, depending on exact rates.
Scenario A (Maturity): Ramesh survives the 25-year term. At age 55, he receives his ₹10,00,000 base sum assured PLUS the accumulated bonuses over 25 years. This massive lump sum serves as his retirement seed money.
Scenario B (Unfortunate Event): If Ramesh passes away in the 10th policy year, his family immediately receives the ₹10,00,000 Sum Assured on Death plus the bonuses accumulated over those 10 years. The policy terminates, but his family’s financial dignity remains intact.
Advantages and Limitations
Every financial product has its pros and cons. Here is an honest, balanced view:
Who Should Buy This Policy?
This plan is highly versatile and fits beautifully into the portfolios of various demographics:
LIC Bima Kavach for Salaried Employees: With predictable monthly incomes, salaried individuals can easily opt for monthly NACH deductions. It provides a disciplined savings route while allowing tax savings under Section 80C.
LIC Bima Kavach for Self-Employed Individuals: Business owners often face income fluctuations. The loan facility is a lifesaver for self-employed folks who might need sudden capital for business needs without disrupting their life cover.
Parents: Excellent for parents looking to build a guaranteed corpus for their children’s education or marriage while securing their own lives.
Young Professionals: Starting early means lower premiums and a longer horizon for bonus compounding.
Middle-Class Families: Ideal for risk-averse families who prioritise capital safety and government-backed guarantees over stock market volatility.
Important Points to Consider Before Buying
Before you sign the proposal form, keep these expert tips in mind:
Assess the Sum Assured: Do not choose a random number. Calculate your family’s living expenses, outstanding loans, and future goals to determine the appropriate LIC Bima Kavach sum assured.
Commit to the Term: Endowment policies yield the best results when held until maturity. Ensure you choose a premium amount you can comfortably pay for the entire duration.
Opt for Riders Wisely: The Accidental Death and Disability rider is highly recommended, as it provides extensive coverage at a very small additional cost.
Nominee Details: Ensure your nominee details are 100% accurate to avoid complications during claim settlement.
Frequently Asked Questions (FAQs)
1. Can I surrender my LIC Bima Kavach policy if I need money?
Yes, you can surrender the policy after paying full premiums for at least two consecutive years. However, surrendering early usually results in a loss of overall value, so taking a loan against the policy is often a better alternative.
2. Are the bonuses in this plan guaranteed?
The plan guarantees a share in LIC’s profits, but the exact bonus rate is declared by LIC annually based on its financial valuation. LIC has a strong, historic track record of paying consistent bonuses.
3. Is this plan better than fixed deposits?
Unlike a standard fixed deposit, this plan provides life insurance coverage. While an FD offers fixed interest, this policy provides life cover, tax benefits, and long-term savings in one package.
4. What happens if I miss a premium payment?
If you miss a premium payment, LIC offers a grace period (15 days for monthly plans, 30 days for others). If it is not paid within the grace period, the policy lapses. You can revive it within 5 years by paying the outstanding premiums with interest.
5. How is the claim process handled?
The claim process is simple. For maturity claims, LIC usually sends an intimation beforehand. For death claims, the nominee must submit the death certificate, original policy bond, and claim forms to the servicing branch. A dedicated agent can make this process completely stress-free.
Conclusion
The LIC Bima Kavach Plan 887 is more than just an insurance document; it is a promise of financial dignity and security for your loved ones. Combining term protection with the power of savings and compounding makes it a core pillar of any solid financial plan. Whether you are a salaried employee seeking tax savings and disciplined investing, or a self-employed business owner seeking capital safety and liquidity, this plan efficiently meets your needs.
Secure Your Family’s Financial Future Today
Choosing the right life insurance policy is a decision that impacts generations. Don’t leave your family’s future to chance. To understand how the LIC Bima Kavach Plan 887 fits into your specific financial goals, calculate the exact premium, and enjoy a seamless buying process, we recommend professional guidance.
Reach out for expert LIC insurance guidance, financial planning, and government schemes assistance today:
Agent: Sundhari S
Designation: Mahila Career Advisor – LIC Tindivanam
Phone / WhatsApp: 9865822106
Website: Nila Safe Life Solutions
Take the first step towards a financially secure tomorrow. Contact Sundhari S today to map out the perfect protection plan for your family!
Disclaimer: The information provided in this article is for educational and informational purposes only. Insurance is a subject matter of solicitation. Readers are advised to consult a certified financial expert or LIC advisor to understand the policy terms, conditions, and exact premium quotes before making any purchasing or investment decisions.
Get expert guidance to choose the right life insurance plan.
Nila Safe Life Solutions
Helping Indian families make smart financial decisions through the right insurance planning.
Trusted guidance. Honest advice.
Quick Links
Contact Me
📞 Call: +91 9865822106
Why Choose Me
✔️ Personalised insurance guidance
✔️ Support for claims & service
✔️ Focus on family financial security
🟢 Usually replies within 5 minutes on WhatsApp
“Insurance vangaradhu mukkiyam illa…
correct time-la vangaradhu dhaan mukkiyam.
© 2026 Nila Safe Life Solutions