LIC New Money Back Plan 20 Years

New Money Back Plan (820):

Summary of LIC New Money Back Plan - 20 Years - Table no 820:

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 of LIC New Money Back Plan - 20 Years:

• You need to pay annual premiums for only 15 years
• You are eligible to apply for a loan against the policy after it has acquired a Surrender Value
• You can opt for additional Benefits such as Accidental Death and Disability
• You can choose as high an amount as you wish for coverage as there is no upper limit to the Sum Assured
• You are eligible for Income tax benefit on the paid premium under Section 80C and on the received claims as per Section 10 (10D) of the Income Tax Act
• Paid up Survival Benefits are not deducted from the Death Benefit payout
• The grace period of up to a maximum of 30 days in case of missed premiums
• Policy Revival is possible for up to 2 years from the date of policy lapsing owing to missed premiums even after grace period gets over

Benefits you get from LIC New Money Back Policy - 20 Years:

Death Benefit:

God forbid, in the unfortunate event of your demise during the policy coverage period, your nominee would be paid ten times the annualized premium or 125% of the Basic Sum Assured along with simple vested reversionary bonuses and additional final bonus. Moreover, the periodic survival benefits paid, if any, won’t be deducted from the payout.

Survival Benefit:

Upon you surviving the policy coverage period, the company would be paying you 20% of the Basic Sum Assured upon completing each of the fifth, tenth and fifteenth policy year.

Maturity Benefit:

With the insured survives to the end of the policy term, he would be paid 40% of the Basic Sum Assured besides being paid simple reversionary bonuses and additional final bonus.

Eligibility Requirements

The Minimum Basic Sum Assured must be rupees 100,000, with no upper limit for maximum Sum Assured.

The minimum age required for enrolling is 13 years, with the maximum being 50 years.

Optional Benefits and Bonuses:

Accidental Death and Disability Benefit Rider:

You may choose to enroll for Accidental Death and Disability coverage after paying additional premium as long as the policy is still in force on the accident date.

In the case of death resulting from an accident, your nominee would be paid out both the Accident Benefit Sum Assured as well as the Death Benefit. In the event of accidental permanent disability the insured would be paid, within the time frame of 180 days from the date of the accident, an amount equal to Accident Benefit Sum Assured spread over a period of ten years.

Resultantly, all upcoming premiums for Accident Benefit Sum Assured would cease to exist.

Simple Reversionary Bonus:

The company calculates this bonus per thousand of the Sum Assured upon completion of each year of policy coverage. Consequently, these form part of the guaranteed benefits.

Thus, these bonuses accrue during the premium paying period during the life of the policy but are paid when the policy matures or upon the death of the policyholder along with the additional final bonus.

Simple Reversionary Bonuses are determined by the company taking into consideration its performance.

Final Addition Bonus:

The company pays this bonus if the policy runs for a minimum period determined by us. It may be declared at the time of claim upon either death or maturity.

Eligibility Requirements for Accidental Death and Disability Benefit Rider:

The minimum Accident Death Benefit Sum Assured is rupees 100,000, with the maximum being Rupees 50 lacs. The minimum age must not be less than 18 years, with no ceiling set to the maximum, with the maximum coverage for a period of 70 years.

Eligibility Conditions of the New Money Back Plan at a Glance:

Coverage and Benefits	Minimum Basic Sum Assured	Maximum Basic Sum Assured	Minimum Required Age for Enrolling	Maximum Age permitted for Enrolling
Death / Survival / Maturity	100,000	No Limit	13 Years	50 Years
Accidental Death and Disability	100,000	50,00,000	18 Years	Below 70 Years

Exclusions:

In the unfortunate incident of the policyholder committing suicide within a year from the date of policy purchase, the company won’t accept any claim in excess of 80% of the premiums paid excluding taxes, rider premiums, and extra premium.

In the case of suicide within a year of policy revival, the company would be paying 80% of the premiums paid excluding taxes, extra premium and rider premiums or acquired Surrender Value, whichever is higher.

LIC New Money Back Plan - 20 Years Example

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 Reversionary 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.

Check the Bonus rates of LIC New Money Back Plan-820

LIC New Money Back Plan - 20 Years Maturity Calculator:

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