LIC New Money Back Plan - 20 Years

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.