LIC New Money Back Plan – 25 years

About LIC New Money Back – 25 years plan

• LIC New Money Back Plan – 25 years is a simple money back plan that offers a periodic repayment after every 5^th year
• This plan provides risk cover and bonus on maturity
• An investment plan with low risk returns
• The premium paying term is less than the fixed policy term

How Does This Plan Work?

Under LIC New Money Back Plan – 25 years, an individual pays a regular premium for 20 years of a 25 year policy term. A 15% of Sum Assured each is paid after every 5th (that is, 5th, 10th, 15thand 20th) year of policy term. After the policy term is over, on maturity he receives a lump sum which comprises of 40% of the Sum Assured and accrued bonus.

If in-case of death of the insured, during the policy term his nominee receives the death benefit that is a lump sum including the Sum Assured on Death and accrued bonus. The Sum Assured on Death is a value which is higher among;

1. 125% of the Basic Sum assured
2. 10 times of the yearly premium amount paid till death

Note that the value of death benefit should be >105% of the total premiums paid till death

Let’s understand this better with an example given below:

Person’s age: 30 years
Policy term: 25 years
Premium payment term: 20 years
Sum Assured: Rs 1 lakh

A 30 year old individual pays a regular annual premium of Rs 6022 for LIC New Money Back plan of 25 years and premium paying term of 20 years. Every 5th year (that is, 5th, 10th, 15th and 20th) he receives 15% of the sum assured (Rs. 15,000) and at the end of 25th year, on maturity he receives approximately Rs 1,25,000 as maturity benefit inclusive of accrued   bonus and 40% of the Sum Assured.  

If death of the individual occurs in the 9th year of the policy term, his nominee will receive a lump sum including the sum assured on death and bonus. The Sum Assured on Death is a value that is higher among;

1. 125% of the Basic Sum assured (Rs 1,25,000)
2. 10 times of the yearly premium amount paid till death (Rs 60,220)

So, nominee receives Rs 1,25,000 + bonus as the death benefit.

Why should you buy LIC New Money plan?

• It is helpful in securing children’s future
• High Life cover ratio means higher bonus amounts.
• Premiums paid are tax exempt under section 80C and maturity amount is tax free under section 10(10D)

Who should buy LIC LIC New Money plan?

• Minimum Basic Sum Assured is Rs. 100,000
• Maximum Basic Sum Assured (The Basic Sum Assured shall be in multiples of Rs. 5000/-) is No Limit
• Minimum Age at entry for Life Assured : 13 years (completed)
• Maximum Age at entry for Life Assured : 45 years (nearest birthday)
• Maximum Maturity Age for Life Assured : 70 years (nearest birthday)
• Premium paying term (PPT) : 20 years
• An individual who is looking out for a low risk investment
• Individuals who are looking for periodic returns along with insurance cover
• Young parents who are looking to secure children’s educational expense
• Individuals who are planning for their specific life goals 

Riders & Add On

LIC’s Accidental Death and Disability Benefit Rider: In the event of death or disability of the insured due to accident, then additional benefits are paid in lump sum, an amount equal to the Accident Benefit Sum Assured, to the nominee as per the policy Terms & Conditions 

Claim Process

Know Claim Process of LIC New Money Back Plan – 25 years

Claim Process

Life Insurance Corporation is an Indian state-owned insurance group and investment company headquartered in Mumbai. It is the largest insurance company in India with an estimated asset value of Rs.1560482 crore.