Most of us wish to invest our hard-earned money in traditional life insurance policies for a long term so that we are able to create a safe and guaranteed amount. For most Indians LIC has been the first choice for all their insurance needs.
LIC’s New Money Back Plan-25 years is a simple participating anticipated endowment plan. This conventional money back plan provides an appealing blend of insurance cover along with recurrent payments during the policy’s 25 year long term.
LIC’s New Money Back Plan-25 years has a tenure of 25 years, though the premium is paid for a tenure of 20 years only. During the tenure of the policy the Policyholder receives a percentage of the basic sum assured, on a periodic basis.
The other features of LIC’s New Money Back Plan-25 years are given below :
LIC’s New Money Back Plan-25 years helps the Policyholder in providing financial support to his loved ones, not only when he is alive but even if he is not around. The benefits of LIC’s New Money Back Plan-25 years are given below :
If the insured individual dies within the policy tenure, the nominee would receive the death benefit and the policy would be terminated.
Death Benefit = Sum Assured on Death + accrued Simple Reversionary Bonus + Final Additional Bonus if any.
Sum Assured on Death is the higher of :
Subject to a minimum of 105% of the premiums that have been paid.
However, in the conditions given below, the plan may be invalid, even if it is in force. The death or disability claim can be rejected if the death or disability has been due to :
Survival Benefits would be paid to the policyholder on survival on the pre-defined schedule.
|Schedule for Survival Benefit||Survival Benefit paid|
|At the end of the 5th year||15% of the Sum Assured|
|At the end of the 10th year||15% of the Sum Assured|
|At the end of the 15th year||15% of the Sum Assured|
|At the end of the 20th year||15% of the Sum Assured|
|Maturity Benefit at the end of the 25th year||The remaining 40% of the Sum Assured is paid along with Simple Reversionary Bonus and Final Additional Bonus|
Maturity Benefit is paid to the policyholder when he outlives the entire policy tenure of 25 years.
Maturity Benefit = The remaining 40% of the Sum Assured is paid along with Simple Reversionary Bonus and Final Additional Bonus.
Participation In Profits
Like mentioned earlier LIC’s New Money Back Plan-25 years is a participating plan. If the policy is in full force and if the Corporation deems right then the policy shall participate in profits and would therefore be eligible for a Simple Reversionary Bonus, at a rate which is declared by the Corporation itself.
|Sum Assured||Minimum INR 1 lakh, No upper limit|
|Entry Age||Minimum 13 years, Maximum 45 years|
|Cover Stoppage||70 years|
|PT or Policy Tenure||25 years|
|PPT or Premium Paying Tenure||20 years|
|Frequency for Premium Payment||Monthly, Quarterly, Bi-Annually, Annually.|
|Age of the Life Insured (in years)||Premium In INR|
|20||60/ INR 1000 Sum Assured|
|30||61.45/ INR 1000 Sum Assured|
|40||61.95/ INR 1000 Sum Assured|
|45||70.15/ INR 1000 Sum Assured|
Rebates and Discounts : This policy offers a rebate in premium for Annual and Semi-Annual modes and a discount in premium for high sum assured.
|Annual Mode||2% of Tabular premium|
|Half-yearly Mode||1% of Tabular premium|
|Quarterly and Monthly||NIL|
High Sum Assured Discount
|INR 1,00,000 to INR 1,95,000||NIL|
|INR 2,00,000 to INR 4,95,000||2% of Basic Sum Assured|
|INR 5,00,000 and above||3% of Basic Sum Assured|
So, the premium for a 30-year-old male non-smoker would be :
|Age of the Life Insured||30 years|
|Policy Tenure||25 years (Fixed)|
|Premium Paying Term||20 years (Fixed)|
|Sum Assured||INR 1,00,000|
So, the premium would be 61.45/1000*1,00,000 = 6145
However, since there is Mode Rebate for Annual Mode and high Sum Assured, it is INR 6022.
Let us now take a look at some of the other important aspects of the LIC’s New Money Back Plan-25 years
Maturity ClaimFor making a maturity claim, the Policyholder needs to submit the following documents at the registered office when his policy reaches its maturity date :
Accidental Disability/Death ClaimIf the insured individual gets involved in an accident that causes his death/disability, he or the beneficiary then need to make the Accidental Disability/Death Claim. To make a claim the following are to be pre-sented :
LIC’s New Money Back Plan-25 years is an insurance plan that provides life cover along with periodic payments during the term. Along with the survival benefits the Policyholder gets maturity benefit as well as a bonus, if there is any. This feature of LIC’s New Money Back Plan-25 years makes it unique and popular.
In simple words a money back plan is an insurance plan where along with a systematic liquidity you can also get a maturity benefit. Rather than receiving the maturity benefit in a lump sum amount at the end of the term policy, the insured individual has the option to get a specific share out of the sum assured at periodic intervals.
Under the LIC’s New Money Back Plan-25 years, if the insured individual is alive when the policy reaches the 5th, 10th, 15th and 20th year, 15% of the sum assured is paid to the individual. This amount that the policyholder receives every 5 years is called the Survival Benefit.
The Policyholder needs to present a Proof of his:
If a police holder wishes to capitulate his policy, he has the provision to do so. The money that he would get then back is the Surrender Value. But it should be remembered that the policyholder will receive a surrender value only if he has made three years of regular premium payment. The guaranteed surrender value is the percentage of the total of the premiums that have been paid, this does not include the premium paid for the rider benefits. The percentage also depends on the number of years for which the premiums were paid.
If less than 3 years’ premium have been paid by the Policyholder all the benefits under the policy will be terminated once the grace period is completed. The Policyholder would not receive any payouts.
If in case, 3 years premiums have been duly paid, the policy will not be void completely. It would be treated as a paid-up policy that would come with a lesser basic sum assured.
Like all other life insurance plans the premium amount up to INR 1.5 lakhs is tax-deductible under Sec-tion 80C of the Income Tax Act. The maturity benefit and the death benefit received, are tax free under section 10 (10D).
When the policyholder pays the premium quarterly, bi-annually or annually he gets a grace period of 30 days but if he is paying monthly instalments, the grace period is 15 days.
Other LIC’s Money Back Plans