LIC New Money Back Plan - 20 Years
LIC New Money Back Plan – 20 Years is a non-linked life insurance policy which offers guaranteed returns and bonus. Premium in this plan needs to be paid for a period of 15 years while the policy continues for 20 years. Policy can be taken by anyone between 13 to 40 years of age for a fixed tenure of 20 years.
20% of the Sum Assured is paid to the Life Insured on survival at the end of every 5 years and the remaining 40% of the Sum Assured along with Vested Simple Reversionary Bonus + Final Addition Bonus would be paid to the Life Insured on survival till the end of the Policy Tenure as Maturity Benefit.
Key Features
20% of Sum Assured is paid at the end of 5th, 10th and 15th Year as Survival Benefit. Simple Reversionary Bonus and Final Addition Bonus is also paid out
Simple Reversionary Bonus is payable on maturity or earlier death
LIC’s Accidental Death and Disability Benefit Rider is available as an option
It is declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. Bonuses will be added during the selected term or till death, if it occurs earlier. Simple Reversionary Bonus accrues during the premium paying term and is paid at the end of the premium paying term or on earlier death along with the final additional bonus, if any. No bonus is paid on death after the premium paying term.
Final Addition Bonus may also be payable provided the policy has run for certain minimum period.
Benefits
In case of death of the Life Insured within the Policy Tenure, the Nominee would be paid the “Sum Assured on Death” along with vested Bonuses as Death Benefit and the policy would be terminated.
The Sum Assured on Death is defined as higher of the following:
- 125% of Basic Sum Assured
- 10 times the Annualized Premium
The Sum Assured on Death will always be a minimum of 105% of all Premiums paid.
On survival, the Life Insured will get the following:
- 20% of Sum Assured at the end of every 5th year
- 20% of Sum Assured at the end of every 10th year
- 20% of Sum Assured at the end of every 15th year
The policy continues till the end of the Policy Tenure of 20 years.
On survival till the end of the Policy Tenure of 20 years, the policyholder will get the following payouts:
- Remaining 40% of the Sum Assured + accrued Reversionary Bonus + Final Addition Bonus (if any).
Life Insurance premiums paid up to Rs. 1,50,000 are allowed as a deduction from the taxable income each year under section 80C under current Income Tax Rules. The Maturity Benefit is also tax free under section 10(10)D subject to fulfilment of all terms and conditions.
LIC Accidental Death and Disability Benefit Rider is available by payment of additional premium during the policy term. In case of accidental death during the policy term, Accident Benefit Sum Assured will be payable as lumpsum along with the death benefit under the basic plan. In case of accidental permanent disability arising due to accident (within 180 days from the date of accident), an amount equal to the Accident Benefit Sum Assured will be paid in equal monthly instalments spread over 10 years and future premiums for Accident Benefit Sum Assured as well as premiums for the portion of Basic Sum Assured which is equal to Accident Benefit Sum Assured under the policy, shall be waived.
How it works
Let us understand this plan better with the help of an example.
Suppose Parvati who is 30 years old buys this plan with a Sum Assured of Rs. 1,00,000. Her annual premium would be Rs. 7,752 + Taxes. The policy term would be 20 years and she will have to pay premiums for 15 years.
Scenario 1 - Parvati dies after 3 years of buying the plan.
Death Benefit = Her nominee will get the higher of the following as “Sum Assured on Death” + Simple Reversionar Bonus.
- 125% of Basic Sum Assured = 125% of Rs. 1,00,000 = Rs. 1,25,000
- 10 times the Annual Premium = 10 x Rs. 7,752 = Rs. 77,520
So the nominee will get Rs. 1,25,000 + any Simple Reversionary Bonus which has been declared. The policy terminates.
Scenario 2 - Parvati dies after paying premiums for 7 years.
Parvati would be eligible to receive the 1st tranche of Survival Benefit and nominee would receive the Death Benefit.
Survival Benefit = 20% of Basic Sum Assured after 5 years = 20% of Rs. 1,00,000 = Rs. 20,000.
Death Benefit - gets higher of the following:
- 125% of Basic Sum Assured = 125% of Rs. 1,00,000 = Rs. 1,25,000
- 10 times the Annual Premium = 10 x Rs. 7,752 = Rs. 77,520
So Parvati would have received Rs. 20,000 after 5 years and her nominee will Rs. 1,25,000 + any vested Simple Reversinary Bonus on her death. The policy terminates.
Scenario 3 - Parvati dies after paying premiums for 13 years.
Parvati would be eligible to receive the 1st & 2nd tranches of Survival Benefit. In addition, her nominee will receive the Death Benefit.
Survival Benefit -
- 20% of Basic Sum Assured after 5 years = 20% of Rs. 1,00,000 = Rs. 20,000.
- 20% of Basic Sum Assured after 10 years = 20% of Rs. 1,00,000 = Rs. 20,000.
Death Benefit - gets higher of the following:
- 125% of Basic Sum Assured = 125% of Rs. 1,00,000 = Rs. 1,25,000
- 10 times the Annual Premium = 10 x Rs. 7,752 = Rs. 77,520
So Parvati will get Rs. 20,000 after 5 years and 10 years. Nominee will receive Rs. 1,25,000 + Simple Reversionary Bonus + Final Addition Bonus on death. The policy terminates.
Scenario 4 - Parvati dies after paying premiums for 16 years.
Parvati would be eligible to receive the 1st, 2nd & 3rd tranches of Survival Benefit. In addition, her nominee will receive the Death Benefit.
Survival Benefit -
- 20% of Basic Sum Assured after 5 years = 20% of Rs. 1,00,000 = Rs. 20,000
- 20% of Basic Sum Assured after 10 years = 20% of Rs. 1,00,000 = Rs. 20,000
- 20% of Basic Sum Assured after 15 years = 20% of Rs. 1,00,000 = Rs. 20,000
Death Benefit - gets higher of the following:
- 125% of Basic Sum Assured = 125% of Rs. 1,00,000 = Rs. 1,25,000
- 10 times the Annual Premium = 10 x Rs. 7,752 = Rs. 77,520
So Parvati will get Rs. 20,000 after 5 years, 10 years & 15 years. Nominee will receive Rs. 1,25,000 + vested Simple Reversionary Bonus + Final Addition Bonus on death. The policy terminates.
Scenario 5 - Parvati survives the policy term.
Parvati will get the Survival Benefits and the Maturity Benefits.
Survival Benefit after 5 years = 20% of Basic Sum Assured = 20% of Rs. 1,00,000 = Rs. 20,000.
Survival Benefit after 10 years = 20% of Basic Sum Assured = 20% of Rs. 1,00,000 = Rs. 20,000.
Survival Benefit after 15 years = 20% of Basic Sum Assured = 20% of Rs. 1,00,000 = Rs. 20,000.
Maturity Benefit = 40% of Basic Sum Assured + Simple Reversionary Bonuses + Final Addition Bonus = Rs. 40,000 + Simple Reversionary Bonuses + Final Addition Bonus. The policy terminates.
Eligibility
| Minimum | Maximum | |
| Sum Assured | Rs. 1,00,000 | No Limit |
| Policy Term | 20 years | |
| Premium Payment Term | 15 years | |
| Entry Age | 13 years | 50 years |
| Age at Maturity | 33 years | 70 years |
| Payment Modes | Yearly, Half-Yearly, Quarterly, Monthly | |
