LIC New Money Back Plan for (25 years), a non-linked insurance scheme that provides assured returns and timely bonus. The policy offers the policyholder a combination of financial assistance and financial protection through its definite endowment plan. The loan facility that is offered to the policyholder under this policy plan tends to look after the liquidity needs.
- 1 Key Features
- 2 New Money Back Plan (25 years) Benefits
- 3 Eligibility and criteria for LIC New Money Back Plan (25 Years)
- 4 LIC New Money Back Plan (25 Years) Premium Calculator
- 5 Payment of Premiums for Money Back Policy (25 Years)
- 6 Revival of LIC New Money Back Plan
- 7 Policy Loan on LIC New Money Back Plan
- 8 Cooling-off period
- 9 Exclusions
- 10 LIC New Money Back Plan 25 Years Review
- The term of the Policy Plan is 25 years
- The Premium Paying Term is 20 years
- It is a simple money back plan that comes with an option of bonus
- The planning basis of the scheme is individual
- The policy plan accepts Nomination
- In case of sudden death of the policyholder during an active policy term, sum assured on death along with the bonuses is paid to the beneficiary
New Money Back Plan (25 years) Benefits
The important benefits are as follows:
- Survival benefit
- Death benefit
- Maturity benefit
- Tax benefit
In a case where the policyholder dies during an active policy term, an aggregate amount of the sum assured on death and the aggregate of bonuses(if there is any), shall be payable to the Nominee. The above-mentioned premiums are exclusive of extra premium, rider premium and tax if there is any.
Note: The ‘Sum Assured on Death’ happens to be 125% of the aggregated Basic Sum Assured. The sum shall not be any less than 105% of the aggregated premiums that has been paid up to the date of death.
In a case where the policyholder outlives the policy term
- he/she shall be paid 15% of the aggregate Basic Sum Assured, at the end of each of the 5th, 10th and 15th and 20th policy year.
An aggregate of 60% of the total maturity benefit is paid to the policyholder as the survival benefit.
The policyholder will avail a maturity benefit on the maturity of the policy term. An amount that is equivalent to 40% of the total Basic Sum Assured coupled with the aggregate of Final Additional Bonus and Simple Reversionary Bonuses if it is applicable.
As per section 80C of the Income Tax Act, the premiums are exempted from taxation but service tax is still applicable on it.
Being a partaking policy scheme, the corporation along with the policy accumulates the Simple Revisionary Bonuses and Final Additional Bonus.
Eligibility and criteria for LIC New Money Back Plan (25 Years)
- The Minimum Sum Assured is Rs. 100,000
- The Maximum Sum Assured has no limit
- The Minimum Age of entry into the policy is 13 years(completed)
- The Maximum Age of entry into the policy is 45 years (completed)
- The age of maturity is 70 years (the nearest birthday)
Here one thing that should be noted is that the sum assured premium shall be in the multiples of Rs. 5000
LIC New Money Back Plan (25 Years) Premium Calculator
Eligibility and criteria for LIC Accidental Death and Disability Benefit Rider
- The Minimum Accident Benefit is Rs. 100,000
- The Maximum Accident Benefit is the aggregated sum that is equivalent to the sum assured under the Base scheme and is subjected to a maximum of Rs. 50lakh
- The Minimum Age of entry is 18 years(completed)
- The age of maturity is 70 years (the nearest birthday)
Payment of Premiums for Money Back Policy (25 Years)
The premium paying frequency of LIC New Money Back Plan-25years is:
- Monthly, quarterly, half-yearly or yearly mode
- A grace period of 30 days is offered to the policyholder within which he/she is deemed to clear the premiums of the policy
- If the policyholder fails to pay the premiums within the stipulated grace period that policy plan will lapse
The policyholder can also avail the surrender benefit by clearing the total due payments for up to 3 years. The Guaranteed Surrender value is equivalent to the proportion of the aggregated sum of premiums paid and it shall be exclusive of the premiums for riders and other additional premiums.
Revival of LIC New Money Back Plan
The Policyholder can opt for the revival of the lapsed policy but it has to be done within a time span of 2 successive years counted from the date of the first due premium. All the due premiums must be cleared prior to the date of maturity of the policy term and must also pay the interest that is applicable to the policy scheme. The policyholder must submit suitable evidence that guarantees a continued insurability.
The Corporation may either accept or reject the plea of revival and may choose to settle for either of the original or revised terms. The policy is effectively revived only after the approval of the corporation has been communicated in written to the insured.
A joint revival of the rider(s) and Basic policy has to be carried out even when the policyholder has opted for only one of it.
Policy Loan on LIC New Money Back Plan
Only when the policyholder of an active policy term has acquired a surrender value in an order that is approved by the terms of the Corporation, the policyholder may avail the loan.
If the policyholder thinks that the “Terms and Conditions” mentioned for the policy plan is somewhat dissatisfactory, he/ she is permitted to return the policy scheme to the Corporation, provided, the policy bond has to be returned within a period of 15 days that shall be counted from the date when the policyholder received the policy bond.
Suitable reasons for objecting to the terms must be submitted to the Corporation. The Corporation shall then cancel the policy bond under question and return the total premium deposited. The Proportionate risk premium on the basic plan and rider, which applied during the active period of the policy, shall be deducted in addition to all the other expenditure if there is any.
In the condition where the policyholder has committed suicide within the 12 months of the plan’s enforcement, 80% of the aggregated premium is payable to the Nominee.
A higher of the 80% of aggregated premium or the acquired Surrender Value is payable to the Nominee, given that, the policy commits suicide within 12 months of the revival of the policy.
LIC New Money Back Plan 25 Years Review
Though it is one of the best plans in the market but the returns of the LIC’s New Money Back Plan provides very low interest in return. The rate of interest on return has been calculated to be around 6.85% which very low for a plan that spans for a tenure of 25 years. So it is not a good investment that you can make but the ultimate decision rests upon you. Hence, consider your requirements and take the decision wisely.