Life Insurance Corporation (LIC) of India was incorporated in 1956 and today, it is among the top-rated insurance companies, covering more than 2,500 different locations in the country. LIC of India is mainly known for providing a diversified range of insurance products to meet the different needs of their wide customer base. From general life insurance and health plans to pension and special plans for specific needs, they have insurance products for all segments of Indian society. One of the most popular LIC products is the money back policy.
What are LIC Money Back Policies?
The LIC Money Back Policies are a popular insurance product offered by the company. This type of plan provides the policyholder with a life cover during the policy term. In addition, maturity benefits are also paid out in the form of survival benefits every 5 years. LIC has two new money back plans – LIC Money Back Policy – 20 years and LIC Money Back Policy – 25 years for its customers to choose from.
- LIC Money Back Policy – 20 Years: This is a non-linked participating plan that offers the policy owner a combination of death cover throughout the policy term and periodic payment in the form of survival benefit. These benefits provide financial support to the family of the policyholder in case of any unforeseen event. More details about this plan are given in the below table:
| Particulars | Details |
| Entry Age | 13-50 years |
| Maturity Age | 70 years |
| Sum Assured | Rs. 1 lakh – no upper limit |
| Policy Term | 20 years |
| Premium Paying Term | 15 years |
| Loan on Policy | Yes, available |
The plan has different criteria for accidental death and disability benefits rider. The following table illustrates that:
| Particulars | Details |
| Minimum Entry Age | 18 years |
| Maximum Entry Age | Can be bought any time |
| Maturity Age | 70 years |
| Minimum Accidental Sum Assured Benefit | Rs. 1 lakh |
Benefits of LIC Money Back Policy – 20 Years
This money back plan from LIC of India comes with the following benefits:
- Death Benefit: In case of untimely death of the policyholder during the policy term, their legally authorised nominee or beneficiary will receive 10 times the annual premium or 125% of the sum assured with simple vested reversionary and additional bonuses (if any).
- Survival Benefit: In case of policyholder’s surviving to the specified policy term, the insurance company will pay them 20% of the basic sum assured amount after 5th, 10th and 15th year of the policy.
- Maturity Benefit: 40% of the basic sum assured, simple reversionary and additional final bonuses will be paid by the company if the policy owner survives till the end of the policy term.
Premiums for LIC Money Back Policy – 20 Years
The insured can pay the premiums monthly (through Electronic Clearing System only), quarterly, half-yearly or yearly. One can also pay the premium amount through the salary saving scheme (SSS). The insurance company provides a grace period of 1 month, but not less than 30 days for quarterly, half-yearly and yearly modes. As for monthly mode, the grace period is 15 days.
Revival of the Policy
An insurance policy lapses if the policyholder does not pay the premium within the specified grace period. However, a lapsed policy can be easily revived within 2 consecutive years from the day of first unpaid premium, but only before the maturity date. The policyholder needs to pay all the arrears of unpaid premiums with interest to revive their lapsed policy.
- LIC Money Back Policy – 25 Years: This is a simple endowment plan with bonus and scheduled payment facilities. The tenure of this plan is 25 years and the premium term is 20 years. More details of this plan have been mentioned here:
| Particulars | Details |
| Entry Age | 13-45 years |
| Maturity Age | 70 years |
| Sum Assured | Rs. 1,00,000 – no upper limit |
| Policy Term | 25 years (fixed) |
| Premium Paying Term | 20 years |
| Modes of Premium Payment | Monthly, quarterly, half-yearly, yearly and salary saving scheme |
| Loan on Policy | Not available |
Benefits of LIC Money Back Policy – 25 Years
Just like 20 years money back plan, this policy also offers the same benefits. And these benefits include:
- Death Benefits: If the insured meets with an accident and dies during the policy term, the beneficiary of the policy will receive the sum assured as well as the additional bonus i.e. simple reversionary bonus.
- Survival Benefits: The insurance company will pay a significant amount in the form of survival benefits to the policy owner after the completion of every 5 years i.e. 5th, 10th, 15th and 20th years of the policy. The amount will be 15% of the total basic sum assured. On maturity, the insured will get 40% of the basic sum assured.
- Additional or Supplementary Benefits: These are not mandatory benefits. However, they can be added to the basic insurance plan for more benefit and extra protection. To avail these benefits an addition amount (premium) is needed to be paid by the insured though.
LIC Money Back Policies: How They Work
Here is an example to understand how these LIC Money Back Policies work:
Ramesh buys LIC Money Back Policy – 25 years having Rs. 10 lakh sum assured amount. This plan will provide the insured with 15% of the basic sum assured as survival benefit after every five years. Upon policy maturity, Ramesh will get 40% of the basic sum assured with additional bonuses.
Thus, Ramesh will get Rs. 1.5 lakh after every 5 years (5th, 10th, 15th and 20 years). At the end of policy tenure, Ramesh will get Rs. 6 lakh and Rs. 4 lakh on maturity (40% of the basic sum assured) with extra bonuses. In case Ramesh dies before the maturity date, his family/nominee will get Rs. 10 lakh along with the added bonuses.
Refer to the following table to get a clearer picture:
| Policy Term | 20 Years Plan | 25 Years Plan |
| End of 5 Years | 20% | 15% |
| End of 10 Years | 20% | 15% |
| End of 15 Years | 20% | 15% |
| End of 20 Years | 40% (balance) + Bonuses | 15% |
| End of 25 Years | NA | 40% (balance) + Bonuses |
Other Money Back Plans Offered by LIC of India
The insurance company offers a number of other insurance products under money back plans. These plans are:
| Name of the Plan | Policy Term | Entry Age | Maturity Age | Sum Assured (minimum) |
| LIC Bima Shree | 14, 16, 18 and 20 years | 8-55 years (for 14 years policy term)
8-51 years (for 16 years policy term)
8-48 years (for 18 years policy term)
8-41 years (for 20 years policy term) |
69 years (for 14 years policy term)
67 years (for 16 years policy term)
66 years (for 18 years policy term)
65 years (for 20 years policy term) |
Rs. 10 lakh |
| LIC Jeevan Shiromani | 14, 16, 18 and 20 years | 8-55 years (for 14 years policy term)
8-51 years (for 16 years policy term)
8-48 years (for 18 years policy term)
8-41 years (for 20 years policy term) |
69 years (for 14 years policy term)
67 years (for 16 years policy term)
66 years (for 18 years policy term)
65 years (for 20 years policy term) |
Rs. 1 crore |
| LIC New Bima Bachat | 9, 12 or 15 years | 15-66 years (for 9 years term)
15-63 (for 12 years term)
15-60 years (for 15 years term) |
75 years | Rs. 35,000 (for 9 years term)
Rs. 50,000 (for 12 years term)
Rs. 70,000 (for 15 years term) |
| LIC New Children’s Money Back Plan | 25 minus age at entry | 0-12 years | 25 years | Rs. 1 lakh |
| LIC Jeevan Tarun | 25 minus age at entry | 90 days-12 years | 25 years | Rs. 75,000 |
FAQs
Q1. What is a policy loan?
A policy loan is a loan that is issued by the insurance company by using the cash value of the policy as collateral. ‘Life Insurance Loan’ is another term used for Policy Loan. If the borrower fails to repay the loan amount, the money is deducted or withdrawn from the death benefit.
Q2. What is ‘Cooling off Period’?
When the insured is not happy or satisfied with the policy’s ‘Terms and Conditions’ they may return the policy within 15 days from the date of policy issued along with policy receipt and a bond stating the reason to return the policy. The insurance company then cancel it and return the paid premium amount after deducting some amount as the proportionate risk premium which is applicable for riders and basic plans only (if any). Moreover, the insurance company’s rules will be levied on this process.
Q3. Which Indian banks are authorised by LIC to collect the premium amount through phone and internet banking facility?
LIC of India has authorised some banks to collect LIC premiums through these modes. These banks include ICICI Bank, HDFC Bank, Citi Bank, UTI Bank, Corporation Bank, Federal Bank and Bank of Punjab.
Q4. How to pay premiums through these authorised banks?
Paying premiums online through these banks is quite easy, safe and quick. Following are the steps an individual needs to follow to pay the premium:
- Visit the official website of the bank and login with valid user ID and password.
- Specify the date on which the insured want their account to debit the amount before approving the payment. An individual with multiple accounts can also signify the particular bank account.
- The concerned authorised bank will deduct the amount, consolidate and send it to LIC as banker’s pay-order or cheque.