Tuesday 6 September 2016

LIC New Money Back Plan for 20 Years

lic money back policy

A Life insurance policy provides dual benefits of security and savings. The below points explain why one must plan their finances and make an integral part of their investment tool.

•    Life is full of uncertainties, and in this scenario life, Insurance comes as a saving grace for your family.
•    It is not only a financial support in case of uncertainty but also an investment plan. It helps in meeting many future goals according to the stage in life and the priorities.
•    It protects against the rising health expenses. It offers protection against critical diseases and hospitalization costs.
•    It contract.
•    It is safe and highly recommended. The money that you invest is the primary responsibility of the stakeholders         
•    It offers protection as well as savings over a long term.
•    It also provides tax benefits for both at the time of entry and exit in most of the plans.
•    Money back policy also acts as a useful tool to cover mortgages and loans taken by the policyholders.


The NewMoney Back Plan is one such plan that provides periodical returns of survival benefits during the term of the policy. Under this scheme, 20% of the sum assured is payable by at the end of the fifth, tenth and fifteenth year of the policy term. The balance amount of 40% is due by the 20th year.

In the event of a death of the policyholder, the death claim covers the full sum assured without deducting any survival benefit amount, which was already paid. The bonus is also calculated on the full sum assured.

Features of the LIC Money Back Policy:

•    The survival benefits are paid periodically
•    There is a double tax benefit under section 80C and section 10D.
•    Death risk cover is 125 percent of the basic sum assured
•    Comes with an additional accidental sum assured
•    Loan can be availed against the plan
•    Premium payment term is 15 years only

Eligibility Criteria:

Minimum and Maximum age                                                 13 Years and 50 Years
Policy Term                                                                                 20 Years
Term of Premium Payment                                                     15 years
Maximum age of policyholder at maturity                          70 Years
Minimum sum assured                                                             100000
Maximum sum assured                                                            No maximum limit.




In Case of a possible event during the policy term:

On Survival:

5th Year       20% of the sum assured
10th Year     20% of the sum assured
15th Year     20% of the sum assured
20th Year     40% of the sum assured plus the accrued bonus.

On Death:

If the policyholder happens to die during the term of the policy her/his nominee will receive:

1.    Either 125% of the basic sum assured or 10 times of the annual premium whichever is higher
2.    Revisionary bonus
3.    Final Additional bonus if there is any.
4.    The benefits or amount that is already paid would not be deducted.

Let us understand the policy better with the help of an example:

Mrs. Basu was a 30-Year-old working woman. She invested in an LIC money back policy
20 Years of the sum assured- INR 100000

The Survival Benefits are as follows:

5th Year      INR 20000 (20% of 100000)
10th Year    INR 20000 (20% of 100000)
15th Year    INR 20000 (20% of 100000)
20th Year    INR 40000 (40% of 100000)


In case of death her nominee with receive 125% of the sum assured along with the accrued bonus. Additionally, any survival benefit that has already been paid would not be deducted.
In the case of an accidental death during the policy term the nominee with receive 125% of the sum assured+ accrued bonus+ accidental sum assured.



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