LIC's New Money Back Plan 20 years is a non-linked participating policy which provides protection against death in addition to periodic payment on survival at specific periods during the term. As part of the policy, 20% of Sum Assured is paid as survival benefit at the end of 5, 10 and 15 years. Also, a simple reversionary bonus is payable on maturity. What’s more, LIC new money back policy provides accidental death and disability benefit riders. Policyholders can also avail of loan facility under the policy.
The LIC new money back policy can be surrendered only after it accrues cash value after payment of 3 years of premiums. If policyholders stop paying the premium, the policy ceases to exist. Nevertheless, if premiums have been paid for three years, a paid up value is accrued for a reduced sum assured. However, the policyholder cannot avail of additions in the future.
The LIC new money back policy can be revived under two years from the day of the unpaid premium. The revival of the policy will be effective after it is duly approved by LIC, which informs the policyholder. What’s more, policyholders can also take loan against the policy provided it has acquired a surrender value.
Key features and highlights
- Death benefit: If the policyholder dies during the policy term, the nominee will get 10 times of annualized premium or 125% of the Basic Sum Assured, vested simple reversionary bonuses and final additional bonus. Also, the periodical survival benefits which have been paid will not be deducted.
- Survival Benefits: If the policyholder survives the policy term, the nominee will receive 20% of the Basic Sum Assured at the end of each of 5th, 10th & 15th policy year and 40% of Sum Assured in addition to accrued bonuses.
- Maturity Benefit: If the Life Assured survives till maturity, 40% of the Basic Sum Assured in addition to simple reversionary bonuses and final additional bonus will be paid.
- LIC’s Accidental Death and Disability Benefit Rider: Rider can be opted after payment of additional premium provided the policy is in force on the day of the accident. In case of accidental death, the Accident Benefit Sum Assured and the death benefit will be paid. In case of accidental permanent disability, a sum equal to the Accident Benefit Sum Assured will be paid over a period of 10 years. Consequently, future premiums for Accident Benefit Sum Assured will be waived.
- Simple Reversionary Bonus: It is declared per thousand Sum Assured at the end of each a year, following which, they form part of the guaranteed benefits. Simple Reversionary Bonus, therefore, accrues during the premium paying term but is paid at the end of the term or death in addition to the final additional bonus. Simple Reversionary Bonuses is declared as per the performance of the Life Insurance Corporation.
- Final Addition Bonus: Paid if the policy has run for a minimum period. Final Additional Bonus may be declared when a claim is made either as a result of death or maturity, provided the policy has been in effect for a minimum term.
- Minimum Basic Sum Assured: Rs. 100,000
- Maximum Basic Sum Assured: No Set Limit
- Minimum Age: 13 years
- Maximum Age: 50 years
- Maximum Maturity Age for Life Assured: 70 years
- Term: 20 years
- Premium paying term: 15 years
- Minimum Accident Benefit Sum Assured: Rs. 100,000
- Maximum Accident Benefit Sum Assured: Amount equal to the Sum Assured under the Basic Plan (maximum of Rs.50 lakh) Accident Benefit Sum Assured.
- Minimum Age: 18 years
- Maximum Age: Can be opted at any time.
- Maximum cover: 70 years
Payment of premiums
Premiums under the policy can be paid at a yearly, half-yearly, quarterly or monthly basis or via salary deductions. A grace period of one month will be given (for yearly, half-yearly, quarterly modes) and 15 days for monthly mode.
The table below shows the premiums per Rs. 1000 of basic sum assured
|Age (in years)||Premium (Rs.)|
If the Life Assured ends life irrespective of whether sane or insane, in a year, from the date of risk commencement, LIC will not accept any claim except 80% of the premiums paid sans taxes, extra premium and rider premiums. If the Life Assured ends life from date of revival, 80% of the premiums paid till the date of death (excluding taxes, extra premium and rider premiums) or the surrender value, will be payable.
Subhash Chaturvedi, a 30-year-old IT professional opts for LIC Money back plan – 20 years for a sum assured of Rs. 2,00,000. Subhash pays an annual premium of around Rs. 15,000 for 15 years. If Subhash dies from an accident, his nominee will receive 125% of Sum assured besides additional accidental Sum assured and Accrued bonuses. Also, any survival benefit which has been already paid will not be deducted. If he survives, he gets 20% of the Sum Assured, i.e, Rs. 40,000 at the end of 5, 10 and 15 years. At the end of 20 years, Subhash will get Rs. 80,000 in addition to accrued bonuses.
Under the LIC money back policy, the survival benefits are paid periodically, which is one of the several reasons why Subhash opted for the policy. The payments can be done on a yearly, half yearly, quarterly or monthly basis. Policyholders can also avail of double tax benefit under section 80 C and 10 D of the IT Act. The large Sum Assured available under the LIC money back plan in addition to additional benefits such as accidental death and disability benefit rider ensures that Subhash’s family is not in doldrums in the event of his accidental death or disability. Also, while the minimum Sum Assured under the plan is Rs. 1,00,000, there is no limit for the maximum which is one of the highlights of the plan.
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GST of 18% is applicable on life insurance effective from the 1st of July, 2017