LIC New Money Back Plan - 20 Years Plan

The New Money Back Plan – 20 Years from Life Insurance Corporation of India (LIC) is a ‘with profits’, non-linked, participating, life insurance policy. The policy provides attractive survival benefits on certain pre-defined policy anniversaries. In addition, the policy also provides a substantial death benefit if the life assured passes away when the policy is active and a maturity benefit if the life assured survives till the completion of the policy tenure.

Premium rates may vary from individual to individual since the insurer will take several specific factors, such as the policy tenure, sum assured, age at entry, etc., into account. One can also choose to purchase LIC’s Accidental Death and Disability Benefit Rider to raise the level of protection offered by the New Money Back Plan – 20 Years. Policyholders can also claim tax benefits as per prevailing Income Tax laws.

Eligibility - Who is the New Money Back Plan – 20 Years for?

In order to be eligible to purchase the policy, you will first have to ensure that you meet the insurer’s pre-defined eligibility criteria.

Parameters	Criteria for eligibility
Minimum age at entry	13 Years
Maximum age at entry	50 Years
Maximum age at maturity	70 Years

Sum Assured and Premium Range - What you get and what it costs?

Sum Assured

You will have to opt for your Sum Assured amount at the commencement of the policy. Your premium amount will be tied to this amount. Upon certain eventualities, this is the basic amount that will be paid to you or your nominee.

Minimum Sum Assured	Rs. 1 lakh
Maximum Sum Assured	No limit

Premiums*

The premium is a certain sum of money that you will have to pay before the completion of the grace period in order to avail the protection accorded by your plan. A few details about your premium payments and the policy is listed in the table below.

Policy Tenure	20 Years
Premium Payment Term (PPT)	15 Years
Premium Payment Mode	Yearly Half-Yearly Quarterly Monthly

* Premiums vary based on age, location, plan term, GST, and other factors

Plan Coverage - What the New Money Back Plan – 20 Years covers?

Death Benefit	If the policyholder succumbs to death during the policy term, the insurer will pay the Death Sum Assured, the Final Additional Bonus, and the Simple Reversionary Bonus, to the nominee.
Maturity Benefit	If the policyholder survives till completion of the policy tenure, the insurer will pay 40% of the Sum Assured, the Final Additional Bonus, and the Simple Reversionary Bonus to the life assured.
Survival Benefit	Upon the completion of the 5th, 10, and 15th policy year, 20% of the sum assured will be paid as the survival benefit.

Riders/Add-On Plans – Additional coverage under the New Money Back Plan – 20 Years

If one wishes to increase the coverage offered by the base plan, one can purchase LIC’s Accidental Death and Disability Benefit Rider. In order to purchase the rider, one has to pay an additional premium. If the life assured passes away due to an accident, the entire Rider Sum Assured will be paid. If the life assured suffers from permanent disability due to the accident, the Rider/Accident Benefit Sum Assured will be paid as monthly instalments for 10 years. This can in-turn serve as an income replacement.

Exclusions - What LIC’s New Money Back Plan – 20 Years doesn’t cover?

The New Money Back Plan – 20 Years from LIC comes with a suicide exclusion. If the life assured commits suicide within 12 months of purchasing the policy, the insurer is not liable to pay any death benefit. In this case, 80% of the premium amount paid will be returned to the nominee. If the life assured commits suicide within 12 months of reviving the policy, the insurer will pay 80% of the premium amount or the policy’s surrender value, based on whichever is the higher of the two.

Other Key Features – Free-Look Period, Surrender Value, Grace Period, etc.  

Free-Look/Cooling-Off Period	The insurer provides policy buyers a free-look period of 15 days, during which time they can review the policy terms and conditions and return the policy if they are not satisfied with it.
Loan	Once the insurance policy has acquired a surrender value, you can take a loan against the policy.
Surrender Value	The policy can be surrendered only if the premiums have been paid for at least 3 full policy years. The higher of the Guaranteed Surrender Value or the Special Surrender Value will be paid as the Surrender Benefit.
Paid-Up Value	If one has paid all due premiums for 3 years, but not the premium following the third year, the policy shall not lapse. It will be converted into a paid-up policy, and the benefits will change accordingly.
Revival	One can revive a policy that has been lapsed within 2 consecutive years by paying all the due premiums with the applicable interest rate.
Rebate	Mode Rebate: 2% of the premium can be availed as rebate if you opt for the yearly mode of premium payment. 1% of the premium can be availed as rebate if you opt for the half-yearly mode of premium payment. No rebate can be availed on quarterly and monthly mode of payment. High Sum Assured Rebate: 2% rebate can be availed upon opting for a sum assured between Rs.2 lakh and Rs.4,95,000. 3% rebate can be availed upon opting for a sum assured over Rs.5 lakh.
Grace Period	A 30-day grace period is applicable for annual, bi-annual, and quarterly mode of premium payments. A 15-day grace period is applicable for the monthly mode of premium payment.

Tax Benefits – How you can save with LIC’s New Money Back Plan – 20 Years

You can claim tax benefits for the premiums you pay and benefits you receive through your policy under Section 80C and Section 10(10D) of the Income Tax Act, 1961. Keep in mind that tax laws can change without prior notice. Hence, you should always consult with a tax advisor to ensure that you make the most of your tax benefits.

Other Benefits of opting for LIC as your Insurance Provider

• Online Premium Payment: Both registered and unregistered users can pay their premium online through the insurer’s website. You can pay through ‘Pay Direct’ without registering or through ‘e-Services’ if you are a registered user. You can pay through net banking, debit/credit card, BHIM, or UPI.
• Online Policy Purchase: Certain policies from LIC can also be purchased online, through LIC’s official website. This is a time-efficient and hassle-free way to purchase policies.
• View Plan-Based NAV: You can view the performance of various funds through the insurer’s website. This feature is especially beneficial for individuals investing in unit-linked policies.
• Policy Status: All information related to your policy can be viewed online, through the official website. In order to view your policy status, you will first have to register/login at the home page, enrol your policy and then add your policy.

Why you should buy the New Money Back Plan – 20 Years from LIC of India?

We often forget that we might have expenses in the future that we don’t account for today – a child’s wedding, higher education, paying the down payment for a new house, etc. While these events bring us a great deal of joy, they can also cause us to shell out a significant amount of money. In order to meet these expenses without any hassles, it is vital that we start planning for them right away.

The New Money Back Plan- 20 years is a smart insurance plan that provides members the dual benefit of a risk cover and a savings option. In addition to the death/maturity benefit, the policy also guarantees fixed survival benefits, which can be used to pay for important milestones. Further, the insurer also pays bonuses along with the benefits, thus increasing your payout amount.

The insurer, Life Insurance Corporation of India (LIC), is one of the most preferred life insurance providers in the country. The company has a range of insurance products on offer for both retail consumers and groups, in order to meet the varying needs of the diverse Indian population. The insurer’s claim settlement ratio for FY15-16 was 98.33%. A high claim settlement ratio ensures that your loved ones are not likely to face any hassles if they have to raise a claim.