LIC New Money Back Plan - 20 Years

Choosing the right life insurance policy from a number of options available is not easy. You need to go through the policy and life insurance company in detail to ensure that you or your family will get the benefits when the time comes. Life Insurance Corporation of India (LIC India) is one of the widely trusted insurance companies in India, offering affordable products for tier 1, 2 and 3 customers.

In its innovative product range, LIC of India has launched the LIC New Money Back Plan - 20 Years, providing an ideal benefit of life risk cover and savings in one plan. Let’s look at the features, benefits, and eligibility criteria of the plan in detail to help you make informed investment decisions.

LIC New Money Back Plan—20 Years is a non-linked, participating, limited premium, individual life assurance savings plan. It offers the combined benefit of life risk protection and savings under one plan.

If the life assured dies during the policy term, the nominee receives the assured financial assistance as the death benefit. If the life assured survives a specified duration during the policy term, periodic payments are provided. Upon surviving the whole policy term, the life assured receives the maturity benefit in a lump sum amount.

The policy is a limited premium policy to help the policyholder plan their secured financial future. Also, in case financial requirements arise during the policy term, the life assured can take a loan against the LIC New Money Back Plan - 20 Years.

To buy the 20 Year Money Back Policy LIC, the customers need to comply with the following eligibility criteria and restrictions:

Date of Commencement of Risk: Risk under policy starts immediately on the acceptance of the risk.

Date of Vesting: If the LIC New Money Back Plan - 20 Years is issued on the life of a minor, the policy automatically vests in the life assured on the policy anniversary on or immediately after the life assured completes 18 years.

Optional benefits are available under the LIC New Money Back Plan - 20 Years, which enhances coverage and makes the plan more favourable to your financial suitability and future requirements. Consider the following benefits while purchasing the plan:

Rider Benefit

Customers can add LIC riders to the plan by paying an additional premium. Some riders are available to add at the time of the policy inception, and some can be added at any policy anniversary during the policy term, provided the premium paying term is at least five years. The following riders are available to add under 20 Year Money Back Policy LIC:

LIC Accident Death and Disability Benefit Rider: If the policyholder opts for this rider, the Accident Death Benefit Sum Assured is paid to the nominee in a lump sum in case of accidental death of the life assured.

In case any accidental disability arises due to the accident (within 180 days from the date of the accident), the nominee receives an amount equal to Accident Benefit Sum Assured in equal monthly instalments for 10 years.

LIC Accident Benefit Rider: If the rider is opted for, upon the accidental death of the life assured, the nominee receives Accident Benefit Sum Assured in a lump sum.

LIC New Term Assurance Rider: If the policyholder opts for this rider, the nominee receives an amount equal to the Term Assurance Rider Sum Assured upon the death of the life assured during the policy term.

LIC New Critical Illness Benefit Rider: Under this rider, if the life assured is diagnosed with any of the specified 15 critical illnesses covered, they receive the Critical Illness Sum Assured.

However, the policyholder can choose between LIC Accident Death and Disability Benefit Rider and LIC Accident Benefit Rider. Hence, a maximum of three riders are available to add under LIC Money Back Policy 920. The sum assured of each rider can not be more than the basic sum assured under the base plan.

Settlement Option for Maturity Benefit

The settlement option allows the life assured to receive the full or part of the maturity benefit in instalments spread over the chosen period of 5/ 10/ 15 years instead of a lump sum amount. The instalments are paid in advance at the instalment payment mode selected with a minimum amount as below:

Option to Take Death Benefit in Instalments

This option allows one to receive the full or part of the death benefit in instalments over a chosen period of 5/ 10/ 15 years instead of a lump sum. It can be chosen for both in-force and paid-up policies. The instalment amount is paid in advance at the chosen instalment payment mode and the minimum amount payable is given below:

Let’s understand the working mechanism of LIC Money Back Policy 920 with an example.

Mr. Sharma, at the age of 30, decides to purchase LIC New Money Back Plan - 20 Years. The plan details are as follows:

The life assured is eligible to get the following benefits:

* The above benefits apply to the standard life where no riders are added to the base policy.

** Here, Scenario 1: Projected investment rate of return assumption of 4% per annum (assumed) and Scenario 2: Projected investment rate of return assumption of 8% per annum (assumed).

*** The benefits are just an illustration and are taken from the sources available on the official website of LIC of India. You can use the LIC New Money Back Plan - 20 Years maturity calculator to calculate the maturity benefits according to your personalized financial needs.

The following attractive features of the Money Back Policy LIC for 20 Years make it a good purchase option among customers:

Premium Payment

The policyholder can pay the premiums yearly, half-yearly, quarterly, or monthly, depending on the financial suitability.

Grace Period

A grace period is offered to make the LIC premium payments after the missed due date. A 30-day grace period is allowed for annual, half-yearly, and quarterly and 15 days for monthly premium payments from the date of the first unpaid premium.

During the grace period, the policy is considered in force, and all the benefits continue without interruption. If the premium is not paid within the grace period, the policy lapses.

Policy Revival

The policyholder can revive their lapsed LIC policy within five consecutive years from the date of the first unpaid premium but before the date of maturity. To revive the policy, the policyholder needs to pay all the outstanding premium payments with the applicable interest.

Note that the Life Insurance Corporation has all the rights to accept, modify, or reject the revival request of the lapsed policy.

Rebate on Policy

LIC New Money Back Plan - 20 Years offers two types of rebates to the policyholder, as follows:

Rebate on Premium Payment Mode:

Rebate on High Sum Assured (on premium):

Paid-Up Policy

If the policyholder has paid the premiums for at least two full policy years and any subsequent premiums are not paid, the policy continues as the paid-up policy till the end of the policy term. Under such conditions, the policy shall not be wholly void, but the benefits are reduced to Death Paid-up Sum Assured and Maturity Paid-up Sum Assured. Vested simple reversionary bonuses and benefits are also paid.

Surrender of the Policy

The policyholder can surrender the policy anytime during the term if at least two full policy years' premiums have been duly paid. Upon surrender, the Life Insurance Corporation pays a value higher of:

• Guaranteed surrender value
• Special surrender value

Policy Loan

The policyholder can avail of the loan under the 20-Year Money Back Plan LIC if at least two full years' premiums have been paid. The maximum loan amount granted is:

For in-force policies: Up to 90% of the surrender value

For paid-up policies: Up to 80% of the surrender value

Life Insurance Corporation declares the applicable interest rate on LIC loan on the methods approved by IRDAI.

Tax Benefit

LIC New Money Back Plan - 20 Years is eligible for tax benefits under the prevailing tax laws. The premiums paid gain tax benefits under Section 80C of the Income Tax Act, 1961, while the benefits payouts are exempted from tax under Section 10 (10D).

Free Look Period

The policyholder has the opportunity to review the policy during the 15-day free-look period and can return it to the Life Insurance Corporation if they are not satisfied with the terms and conditions. The policyholder needs to state the reasons for the objections.

Upon receiving the request, LIC of India cancels the policy and returns the premium deposited after deducting applicable charges.

The policy shall be considered void, and the nominees are restrained from receiving the benefits under the below conditions:

• If the life assured commits suicide at any time within 12 months from the date of risk commencement under the policy, the nominee receives 80% of the total premium paid till the date of death.
• If the life assured commits suicide within 12 months from the date of revival, the nominee receives an amount higher of:

• 80% of the total premiums paid till the date of the death
• Surrender value as on the date of the death

Look at the LIC 20 Years Money Back Policy premium chart below, applicable for the basic sum assured of Rs. 1 Lakh for a standard life:

* The above premiums are exclusive of taxes.

** To estimate the premiums payable for your personalized requirements, use the LIC New Money Back Plan - 20 Years premium calculator.

Buying LIC Money Back Policy 920 can provide assured financial security for your family when you are no longer around. Also, if you survive the pre-determined policy years or the whole policy term, you get the financial benefits that you can utilize to fulfil different financial requirements. You can reach out to the nearest LIC branch, an LIC agent, or a RenewBuy Partner to purchase the plan.

Once purchased, list the policy on the LIC Customer Portal and keep track of it online. LIC e-services make the LIC premium payment, track the LIC claim status, and make other activities accessible from anywhere without reaching the branch.

If you need assistance while purchasing or want details on LIC policies, connect with a LIC agent or life insurance agent nearby with the help of RenewBuy Advisor Connect.

Disclaimer: The content published in this article is intended solely for the reader's informational purposes and should not be relied upon for personal, medical, legal, or financial decisions. It is advisable to seek advice from a qualified professional regarding specific concerns. The details provided regarding the plan are for reference purposes only. Please visit the insurer's website for the latest updates on the plan. The Company does not guarantee suitability, reliability, timeliness, or accuracy of the information, services, or any other aspects mentioned in this regard for any purpose. We do not endorse any particular insurance company or insurance product provided by any insurer.