LIC's New Money Back Plan-20 years, is a participating non-linked insurance plan which provides protection to policyholder against death, along with the benefit of regular payment on survival at specific policy duration. As part of the plan, the survival benefit of 20% Sum Assured is paid at the end of 5, 10 and 15 policy year. Also, on maturity, a simple reversionary bonus is payable to the policyholder. In addition to this, LIC’s New Money Back policy offers accidental death and disability benefit riders for a little extra premium. Policyholders can also enjoy liquidity in an emergency situation by availing loan facility under the policy.
The LIC Money Back policy will accrue cash value only after the payment of premiums of 3 years. If the premium is discontinued before this, the policy will cease.
Death benefit - If the policyholder dies during the term of the policy, then the policy will pay out sum assured on death and accrued bonuses, if any, shall be paid to the nominee and the policy will terminate. Sum assured on death will be higher of 10 times of annual premium or 125% of basic sum assured. The survival benefit amount paid in the policy will not be deducted from the death benefit sum assured. All this will be paid out on the condition that policy is in force and all due premiums have been paid.
Maturity Benefit - The policyholder will receive 40% of the Sum assured, along with accrued bonuses (simple reversionary bonuses and Final Additional bonus, if any) that will be paid in lump sum on survival when the policy will terminate. The maturity benefit will be paid out provided the policy is active and all due premiums have been paid by the policyholder.
Survival Benefits - The survival benefit of 20% will be paid to the policyholder at the end of 5th, 10th, and 15th policy term, if the policyholder is alive on those specific durations.
Benefits of LIC Money Back Policy 20 Years include Death benefits, survival benefits, Maturity benefits.
Participation in Profits - The LIC Money back policy is participating, which means that it will pay out simple receive Simple Reversionary Bonuses and a final additional bonus, if any, provided the policy is active and all premiums have been paid.
Optional rider to enhance the value of the policy
LIC’s Accidental Death and Disability Benefit Rider - The rider provides an extra financial benefit to the policyholder in case the death is due to an accident. The minimum sum assured of the rider is INR 1 lakh and the maximum sum assured of the rider is INR 1 crore. The minimum age of entry is 18 years and maximum age of coverage under this rider is 70 years. The accidental death benefit sum assured will be paid in lump sum in addition to the death benefit.
In case of accidental permanent disability happening to the policyholder due to an accident (in 180 days from the date of accident), the sum assured which is equal to accidental benefit will be paid over 10 years and all future premiums will be waived off in the policy.
| Minimum Sum Assured of the policy | INR 100,000 |
| Maximum Sum Assured of the policy | No Limit |
| (The Basic life Sum Assured will be in multiples of INR. 5000/-) | |
| Policy Term | 20 years |
| Premium paying term in the policy (PPT) | 15 years |
| Minimum Accidental Death and Disability Benefit Rider Sum Assured | INR 100,000 |
| Maximum Accidental Death and Disability Benefit Rider Sum Assured | 100,00,000 |
| (The sum assured of Accident Death and Disability Benefit rider will be in multiples of INR. 5000/-) | |
Payment of Premiums: There are four modes of premium payment annually, half yearly, quarterly and monthly mode. The payment is to be made electronically through ECS only for monthly mode.
Sample Premium Rates: Below are some of the sample premium rates in tabular (exclusive of service tax) per INR. 1000/- Basic Sum Assured:
| Age (in years) | Premium (Rs.) |
|---|---|
| 20 | 78 |
| 30 | 79.1 |
| 40 | 82.95 |
| 50 | 92.05 |
Mode and High Sum assured rebates:
Mode Rebate:
High Sum assured Rebate:
Basic Sum Assured - Rebate (INR)
| Minimum Entry Age for Life Assured | 13 years (completed) |
| Maximum Entry Age for Life Assured | 50 years (nearest birthday) |
| Maximum Age at Maturity of the plan | 70 years (nearest birthday |
| Minimum Entry Age at entry for optional Accidental Death and Disability Benefit rider | 18 years (completed) |
| Maximum Entry Age for optional Accidental Death and Disability Benefit rider | The optional rider cover can be opted for at any policy anniversary during the P.P.T. (Premium Payment Term) |
| Maximum rider cover ceasing age for optional Accidental Death and Disability Benefit Rider | 70 years (nearest birthday) |
Grace Period : The LIC money back plan offers a grace period in case the premium of the policy is not paid on due date. A grace period of 30 days is allowed for yearly, half-yearly and quarterly premium payment mode, and a grace period of 15 days is allowed for monthly premium payment mode. The death claims raised during the grace period will be entertained. The claim amount payable will be minus the premium due as on the date of the claim.
Free look period : Free look period of 15 days is offered in this plan from the date of receipt of the policy bond. The policy can be returned back to Life Insurance Corporation stating the reasons for cancellation. On receipt of the same, the policy will be cancelled by the life insurance company and amount of premium paid in the policy so far will be returned, after deducting the expenses incurred by the company.
Surrender Value: The policy can be redeemed for cash after being active for a period of 3 years. The surrender value will be based on the actual premium paid in the policy minus the extra premiums and premiums for riders, if opted. If there are any vested simple reversionary bonuses available, it will be added to the surrender value of the policy as per the terms and conditions.
Tax Benefits : The premium paid in this policy is available for tax deduction under Section 80C of the Income Tax Act, 1961. The death benefit is also free from tax liability as per Section 10(10D) of the Income Tax Act, 1961.
Exclusions
Suicide: If the insured in the policy, whether sane or insane, commits suicide within 12 months from the date of start of policy or revival, then no death benefit amount mentioned in the policy is payable. The Life Insurance Company is obligated to only return 80% of the premiums paid, excluding any taxes, extra premium, and rider premium and that too if the policy is in force at the time of the death.
Accident death benefit exclusion : The accidental death benefit will be payable only if the policyholder dies within 180 days of the date of the accident. If the death happens over and above 180 days of the accident, then only death benefit will be payable in the policy.
The money back plan basically works as a regular income payment plan for the policyholder. The policyholder gets money back after a specific policy term also known as survival benefits. The duration of the period in which the insured gets the part of sum assured is normally a 5 year interval. At the maturity of the policy, the remaining sum assured is paid to the policyholder with any bonuses accumulated during the course of the money back plan. If the policyholder dies within the policy term, then the full death amount will be paid, irrespective of sum assured paid at regular intervals as per the policy plan.
Nikhil Sharma, a 32-year-old IT professional buys LIC Money back plan – 20 years for a sum assured of INR 2 lakhs with Accidental Death and Disability Benefit Rider. Nikhil pays a yearly premium of around INR. 15,000 for 15 years. If unfortunately, Nikhil passes away due to an accident, the nominee in the plan will receive the Sum assured along with additional accidental Sum assured and any accrued bonuses. Also, if Nikhil was paid any survival benefit, it will not be deducted from the death benefit sum assured. If he survives the policy term, he is set to receive 20% of the Sum Assured, i.e., INR. 40,000 at the end of five, ten and fifteen year of the policy period. If Nikhil survives the entire policy term, then at the end of 20 years, he will get INR. 80,000 in addition to any accrued bonuses.
The survival benefits are paid periodically under the LIC money back policy which is why many go for the money back policy to save and fulfil their short term goals. There are flexible options for premium payment like annually, semi-annually, quarterly and monthly. The insured can avail tax benefit on the premium payment and money receivable in the plan under the Income Tax Act, 1961. The high life sum assured with added valuable optional riders ensures comprehensive financial protection for Nikhil and his family. The minimum sum assured in the LIC money back policy is INR 1 lakh and there is no limit to maximum sum assured which means this plan can cater to people of any income group.
What does a money back plan mean?
A money back plan gives the life insurer payments at regular intervals of the plan. The period of the money back normally ranges between 4 to 5 years. A Money back plan is similar to an endowment plan.
What happen if money back policy lapses?
If the money back policy lapses due to non-payment of premium, then the life insurer has the option to revive the policy within a period of 2 years from last premium due. The revival of the policy will be done as per the terms and conditions mentioned in the document.
Why should I buy the New Money Back Plan – 20 Years from LIC of India?
LIC of India has been one of the oldest and most trusted Life Insurer which is government of India backed and owned. The claim settlement ratio is the highest of LIC for many years now. LIC is also comprehensively spread in all the states of India and also has branches abroad. These are some of the main reasons amongst many why one should buy the New Money Back Plan- 20 years from LIC of India.
