LIC of India
LIC New Money Back Plan - 20 Years

LIC New Money Back Plan - 20 Years

New Money Back Plan-20 years (Plan No. 920, UIN No. 512N280V02) by LIC (Life Insurance Corporation of India) is an ideal combination of protection against death throughout the term of the plan along with the periodic payment on survival at specified durations during the period of the policy. If in case the insured individual dies in the course of the term period, the nominee receives the whole sum assured, without the survival benefits being deducted.

The plan is similar to an endowment policy in that it provides a liquidity benefit to the policyholder. Money-Back Plans are thought to be the best option for people looking for a low-risk, high-liquidity plan. LIC New Money Back Plan-20 Years, which offers guaranteed returns and bonuses, is one of the best financial supports a family could ask for.

Eligibility Criteria

Here’s the eligibility criteria for LIC New Money Back Plan.

Minimum Age (In Years)13 years (completed)
Maximum Age (In Years)50 years (nearer birthday)
Policy Term20 years
Premium Paying Term15 years
Minimum Basic Sum AssuredRs. 100,000
Maximum Basic Sum Assured

No Limit

(The Basic Sum Assured shall be in multiples of Rs. 5000/-)

Maximum Maturity Age70 years (nearer birthday)

Features and Benefits of LIC New Money Back Plan

LIC New Money Back Plan-20 years offers a range of features and benefits that make it one of the popular plans among people. Let’s discuss them in detail!

1. Death Benefit:

If the Life Assured dies during the period of the policy (i.e., all due premiums have been paid), the death benefit will be “Sum Assured on Death,” including final additional bonuses and a simple reversionary bonus paid. Also, the benefit of the death will not be less than 105% of the accumulated amount of premium paid up to the death date. The premium doesn’t include taxes, rider premium, or extra premium. 

2. Maturity Benefit:

If the Life Assured lives to the time of closing of the plan and the policy is still in existence, the “Sum Assured on Maturity” will be paid, along with any vested Simple Reversionary Bonuses and Final Additional Bonuses, if any. And the amount of the sum assured on maturity is equivalent to 40% of the basic sum assured. 

3. Survival Advantages:

If the Life Assured lives to the end of the stated periods and all obligatory premiums have been paid, 20% of the Basic Sum Assured will be paid at the end of the 5th, 10th, and 15th policy years, respectively.

4. Participation in Profits:

The policy will share in the Corporation’s profits and will be eligible for Simple Reversionary Bonuses based on the Corporation’s record, as long as the policy is in effect.

In the year in which the policy results in a claim, either by death or maturity, a Final Additional Bonus may be declared under the policy. Under paid-up plans, the final additional bonus will not be paid.

Out of the surplus resulting from the actuarial study, the real allocation to policyholders will be approved by the Central Government following the terms of the LIC Act, 1956.

5. Grace Period:

From the date of the first unpaid premium, a grace period of 30 days for yearly, half-yearly, or quarterly premiums and 15 days for monthly premiums will be permitted. Throughout this timeframe, the policy will be regarded in force, with the risk cover continuing as planned, as per the policy’s conditions. The Policy will lapse if the premium is not paid before the grace period expires.

The grace period mentioned above will also apply to rider premiums, which are paid in addition to the base policy premium.

6. Paid-up Policy:

If the premiums of less than 2 years have been paid and any subsequent premium is not paid on time, all policy benefits will cease after the grace period expires from the time of the first unpaid premium, and nothing will be paid.

If the premiums of two full years have been paid and any future premiums have not been paid, the policy will not be rendered null and void but will continue as a paid-up insurance until the policy term expires.

7. Loan Against Policy

If at least two full years’ premiums have been paid, a loan can be obtained under the policy and the terms and conditions stipulated by the Corporation from time to time have been fulfilled.

As a percentage of Surrender Value, the maximum loan allowed under the policy is as follows:

• Up to 90% for policies that are currently in effect

• Up to 80% for fully paid-up plans

At periodic periods, the interest rate to be charged for the policy loan and as applicable for the whole term of the loan will be set. The applicable interest rate will be determined by the Corporation using the IRDAI-approved process.

8. Free Look Period:

If the Policyholder is concerned with the “Terms and Conditions,” of the policy, the policy may be returned to us within 15 days from the date of the policy bond, together with a written explanation of the policyholder’s complaints. After deducting the proportionate risk premium (for Base plan and rider(s), if any) for the duration of cover, expenses expended on medical examination, special reports, if applicable, and stamp duty charges, the Corporation will cancel the policy and refund the amount of premium deposited.

How Does LIC New Money Back Plan Work?

For the policyholder, the money-back plan functions as a regular income payment plan. After a set insurance period, commonly known as survival benefits, the policyholder receives money back.

Let us understand this plan better with the help of an example.

Ravi Singh, a 32-year-old “Software Engineer,” purchases a 20-year LIC Money Back plan with a sum assured of INR 2 lakhs along with the rider benefit of Accidental Death and Disability. Ravi is required to pay a yearly premium of roughly INR 15,876 for a timeframe of 15 years. If Ravi dies in an accident, the plan’s nominee (chosen when the plan was created) will get the Sum Assured, as well as any further accidental Sum Assured and collected bonuses.

In addition, any survival benefits received by Ravi will not be subtracted from the death benefit amount guaranteed. If he lives to the end of the policy term, he will get 20% of the Sum Assured or INR. 40,000, at the end of five, ten, and fifteen years. Ravi will receive INR. 80,000 in addition to any collected incentives if he survives the complete policy term of 20 years.

What is Excluded in LIC New Money Back Policy?

Even though the policy covers many of the items listed in the features and benefits section, it does not cover Suicide.

1. If the insured person commits suicide (irrespective of its reason) within 12 months of the start of the risk, the Corporation will not accept any claim under the policy except for 80% of the total premiums paid, if the policy is in place.

2. If the policyholder suicide within 12 months of being resurrected, the sum payable is greater than 80 percent of the total premiums paid up to the date of death or the surrender value available at the time of death. Any other claim under the policy will be denied by the Corporation.

This condition will not apply to a policy that has lapsed without accumulating paid-up value, and no payments will be made under such covers.

How Can You Quickly Buy a LIC New Money Back Policy?

If you prefer to buy the “LIC Money Back Policy”, go to your nearby LIC branch. Make sure you bring all your necessary documents along with you to buy the policy without any hassle. You can even contact them at +91-022 6827 6827 to get more information.

Alternatively, if you still face difficulties, you can contact Probus Insurance for assistance.

Frequently Asked Questions

Here are the frequently asked questions related to LIC’s New Money Back Plan- 20 years.

1. Will I get anything if I surrender my policy?

If the insured has paid two full years of premiums, he or she will be eligible for a surrender value. The guaranteed surrender value is a proportion of the total amount of premiums paid, excluding taxes and rider premiums. The proportion would also be determined by the number of years the policy had been in force when it was relinquished.

2. Does LIC's New Money Back Plan-20 Years have any tax advantages?

The premium is deductible under Section 80C of the Internal Revenue Code. Section 10 of the Internal Revenue Code allows you to deduct the maturity and death benefits you receive (10D).

3. Is there a provision in LIC's New Money Back Plan-20 years to obtain a loan?

The policyholder can apply for a loan after paying for at least two full years of premiums. The loan amount must be within the plan’s surrender value.

4. Is there a grace period for policyholders to pay their premiums?

If payments are made quarterly, bi-annually, or annually, the policyholder receives a 30-day grace period. In the event of monthly installments, the grace period is 15 days.

5. What are the Documents Required to Buy the LIC Money Back Plan?

The following are the documents that are needed to purchase the LIC Money Back Plan:

  • Date of Birth Proof

  • ID Proof

  • Latest Photograph

  • Address Proof

  • Your Bank Account Details

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