LIC’s New Money Back Plan-25 years

LIC’s New Money Back Plan-25 years

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.

Features of LIC’s New Money Back Plan-25 years

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 :

• The plan is a participating conventional plan.
• LIC’s New Money Back Plan-25 years is an uncomplicated money back plan that comes with the addi-tional benefit of Bonus.
• The policy continues for 25 years whereas the premium is to be paid only for a term of 20 years.
• If the Policyholder remains alive till the end of the 5th year, the 10th year, the 15th year and the 20th year, 15% of the sum assured is paid in all the years respectively. This amount that the individual re-ceives throughout the policy term is called the Survival Benefit.
• The remaining 40% of the total sum assured is paid at the culmination of the term policy along with the built-up benefits, if the Policyholder survives the term.
• In case the individual dies before the end of term of the policy, the sum assured and the bonus that has been collected is paid to the nominee or the beneficiary as the Death Benefit.

Benefits of LIC’s New Money Back Plan-25 years

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 :

Death Benefit
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 :

• 10 X the Annualised Premium
• 125% of the Sum Assured which is chosen at the commencement of the policy

Subject to a minimum of 105% of the premiums that have been paid.

Things-to-know

• LIC’s accidental death and disability benefit rider are provided for the policyholder to enhance his existing policy.
• If the frequency of premium paying is yearly or bi-yearly the policyholder can get modal discount.
• As per Section 80C and 10 (10D) of the Income Tax Act, there is tax-benefit on the premium paid and the death benefit and maturity benefit.

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 :

• Deliberate self-injury
• Injuries from participating in riots, rebellion, war, adventure sports.
• Employment in Army or Police Services
• Participating in any criminal acts

Survival Benefits
Survival Benefits would be paid to the policyholder on survival on the pre-defined schedule.

Maturity Benefits
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.

Eligibility Criteria for LIC’s New Money Back Plan-25 years

Sample Premium

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.

Mode Rebate

High Sum Assured Discount

Premium Calculation

So, the premium for a 30-year-old male non-smoker would be :

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.

Other Features of LIC’s New Money Back Plan-25 years

Let us now take a look at some of the other important aspects of the LIC’s New Money Back Plan-25 years

• Accidental Death and Disability Rider
  To enhance the life, cover furthermore, the policyholder can add on a rider to his policy either at the time of by buying the plan or even later, while the policy is still active. With the addition of a nominal amount to the premium amount, the policyholder can include the accidental death and disability benefit rider to his plan.
  Unfortunately, in case the insured dies in an accident, the beneficiary would receive a lump sum amount which includes the death benefit and an extra amount of the accidental death rider. If within six months of the date of accident the policyholder has to suffer a permanent disability, he would receive the assured accidental benefit, in the form of per month instalments over a time period of 10 years.
• Non-Forfeiture Regulations
  If the Policyholder has paid less than 3 years’ premium and has not paid the following instalments, all the benefits that were assured under the policy will cease once the grace period is over. The Policyholder would not be eligible for any kinds of payouts thereafter.
  However, if 3 years premiums have been paid in due manner, the policy will not be negated wholly, but would be considered as a paid-up policy with a reduced basic sum assured.
• Surrender Value
  There is a provision to surrender the policy for cash at any time during the tenure of the policy, once three years’ premiums have been cleared. The insured has the option to surrender his policy after three years of regular premium payment. The surrender value that is guaranteed is the percentage of the whole amount of premiums that have been paid. This does not include the premium that is paid towards the rider. The amount is directly dependent on the number of years for which the premiums were paid before the policy surrender.
• Suicide
  No claims will be served by the Corporation except to the limit of 80% of the paid premiums which would not include taxes, rider premiums etc. If the individual, irrespective of being sane or insane, commits suicide within one year of renewal of the policy, an amount that is higher of 80% of the premiums that are paid till the death of the individual or the surrender value, is payable to the nominee.
  In case the suicide is committed within one year of policy renewal an amount that is higher of 80% of the premiums that have been paid till the date of death.
• Cooling-off Period
  In a cooling off period, the new customer is given a period of few days to decide if he really wishes to continue with the policy that he has bought. There is a cooling-off period for the customers of LIC’s New Money Back Plan-25 years, the Policyholder can return the policy within 15 days of the beginning of the policy, after fulfilling the required conditions.
• Claim Requirements for LIC’s New Money Back Plan-25 years
  Death Claim
  In order to make a death claim, after lodging the claim the beneficiary needs to submit the following doc-uments at a LIC registered office :
  • LIC’s New Money Back Plan-25 years Claim Form
  • The original Papers of the Policy
  • NEFT Mandate
  • Title Proof
  • Proof of Detail
  • Medical Treatment Documents prior to death
  Maturity Claim For making a maturity claim, the Policyholder needs to submit the following documents at the registered office when his policy reaches its maturity date :
  • Discharged Form issued by the Corporation
  • Original Policy Papers
  • Claimant’s NEFT Mandate
  • Bank Details for transfer of money
  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 :
  • A copy or the FIR
  • Report of the Post Mortem
  • Copy of the Panchnama
  • Newspaper cuttings if in case the accident has been reported.
  • In a vehicular accident where the insured was driving, Driver’s Licence must be presented.
  • Report of the Inquest made by the Police
  • Final Report of the Accident as given by the Police
  • Records of the Hospital Treatment