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.
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 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
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. |
Sample Premium
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.
Mode Rebate
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 |
Premium Calculation
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) |
Premium Factor | 61.45 |
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.