Why LIC Money Back Plans Are the Right Choice for You
- Money Back Plans from LIC provide savings in addition to protection. Along with a lump sum payment upon maturity, you also receive periodic returns at prearranged milestones.
- Since they are participating, non-linked plans, your policy will share in LIC’s surplus (bonuses), which will increase your returns.
- A well-known example is the 20-year LIC New Money Back Plan (Plan No. 920 / UIN 512N280V02). At 5, 10, and 15 years, survival benefits (20 percent of Basic Sum Assured each) are paid, along with a 40% maturity benefit and bonuses if you live out the term.
Real-World Insights & What the Data Shows
| Metric | What LIC’s New Money Back 20-Yr Plan Offers |
|---|---|
| Entry age | 13 to 50 years (nearer birthday) |
| Maturity age | Up to 70 years |
| Premium paying term | 15 years (the plan lasts for 20 years, and you pay premiums for 15 years). |
| Death benefit | At least 105% of the total premiums paid thus far (plus bonuses); at least 125% of the Basic Sum Assured or 7× annual premium |
| Survival benefits | 20% of the Basic Sum Assured at the conclusion of the fifth, tenth, and fifteenth years |
| Maturity benefit | 40% of the Basic Sum Assured plus any vested simple reversionary bonuses and any final bonuses |
“LIC’s Money Back 20-year plan gives you periodic liquidity through survival benefits, alongside life cover and bonus participation — making it ideal for those who prefer a disciplined approach to savings.”
— Insurance Expert / Actuarial Consultant
Use Our LIC Money Back Policy Calculator
Calculate your survival and maturity payouts with ease. You can enter your desired sum assured, premium term, age, and other details to obtain estimated values for survival payouts, maturity, and death benefit using the calculator at liccalculatorpremium.com. Make well-informed planning choices.
Who Should Consider This Plan
- Those who desire both guaranteed life insurance and regular liquidity (through survival benefits).
- A portion of returns at five, ten, or fifteen years are useful for people with medium-term goals, such as children’s education or a down payment on a home.
- Investors who desire bonus participation but prefer less risk than market-linked products.
Key Advantages & Some Considerations
Pros
- Without waiting for maturity, regular survival payouts provide financial relief.
- Even in the event of an early incident, death benefits guarantee family protection.
- Bonuses for participation increase returns.
- Tax incentives include the ability to receive premiums under Section 80C and maturity/death benefits under Section 10(10D) (subject to applicable tax laws).
Things to Keep in Mind
- Returns are lower than those of high-risk market-linked investment products because this is a conventional non-linked plan.
- When compared to pure term insurance, premiums are typically higher for the same sum assured.
- Bonuses are contingent on LIC’s performance and are not guaranteed.
- Early surrender could result in a much lower value and the loss of some advantages.
Expert Opinion
“In a country like India, where financial emergencies and big life events can happen unexpectedly, having intermittent payout features in an insurance plan provides flexibility. LIC’s money back plans strike a balance between savings and protection.”
— Senior Life Insurance Analyst, India
Final Word
If you want a plan that gives you:
- life cover,
- periodic payouts to meet mid-term goals,
- and reasonable returns via bonuses,
You might benefit greatly from LIC Money Back Plans, particularly the “New Money Back 20-Yr Plan.” To find out how well it fits your objectives, model your unique situation using the LIC Money Back Policy Calculator at liccalculatorpremium.com. This includes sum assured, age, premium, and other factors.
Frequently Asked Questions (FAQs)
The “Sum Assured on Death” plus vested bonuses will be given to you (or your designee). According to LIC’s plan document, the death benefit is the greater of 125% of the Basic Sum Assured or 7× the annualised premium, subject to minimum guarantees (at least 105% of the total premiums paid).
20% of the Basic Sum Assured is paid at the conclusion of the fifth, tenth, and fifteenth years for LIC’s New Money Back 20-year plan, assuming all outstanding premiums for those years have been paid.
You will receive 40% of the Basic Sum Assured + vested bonuses + Final Additional Bonus (if applicable) if you live out the entire policy term, such as 20 years.
Indeed. Many money-back plans allow you to take out a loan against the policy after two full years of premium payments have been made; the terms vary depending on the plan and LIC regulations.
There is a grace period, which is usually 15 days for monthly premiums and 30 days for annual, half-yearly, and quarterly premiums.
If the policy expires, it can be renewed by paying past-due premiums plus interest within a five-year period.
After paying premiums for at least two years, the surrender value becomes available; the amount is determined by the number of premiums paid, the survival benefit already paid, and other factors.