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LIC Money Back Policy- 20 years

LIC’s New Money Back Plan-20 years is a simple participating anticipated endowment plan. Thus, it is a traditional money back plan with scheduled payments and bonus facility. This plan being a 20 years tenure has 20 year schedule of survival and maturity benefits to be paid.

LIC’s Money Back Policy is a 20-year, non-linked plan that gives pay-outs at certain intervals. These pay-outs are made during the policy tenure as a certain percentage of the basic sum assured. This policy offers accidental death and disability benefit rider as well. The insured can avail a loan as well on this policy. As a part of this policy, the insured gets a survival benefit of 20% of the basic sum assured at the end of 5th, 10, 15 and 20 years of the policy. Additional bonuses are also paid on maturity. In case the life assured dies during the policy tenure, the full sum assured will be paid, irrespective of the survival benefits, which have been periodically paid.

LIC money Back Policy Key Features

  • This is a Participating Traditional Plan
  • Simple money back plan with bonus option
  • Premium needs to be paid for a period of 15 years only while the policy continues for a period of 20 years
  • If the Life Insured is alive at the end of the 5th, 10th and 15th years, 20% of the Basic Sum Assured is paid as Survival Benefit and the policy continues
  • The rest of the 40% of the Basic Sum Assured is paid on survival at the end of the policy tenure along with the accrued bonuses
  • If the life insured dies within the policy tenure, the entire Sum Assured + accrued Bonuses would be paid to the nominee as Death Benefit

Benefits of LIC Money Back Policy- 20 years

  • Bonus: This policy participates in the bonuses of the company and the policy accrues Simple Reversionary Bonuses and Final Additional Bonus
  • Survival Benefit: On survival, 20% of the Sum Assured is paid to the policyholder as Survival Benefit and the policy continues:
    • Payable at the end of the 5th Policy Year
    • Payable at the end of the 10th Policy Year
    • Payable at the end of the 15th Policy Year
    • Maturity Benefit: On survival till the end of the policy tenure, the remaining 40% of the Basic Sum Assured + accrued bonuses are paid to the policyholder as Maturity Benefit and the policy terminates
    • Death Benefit: if the Life Insured dies within the policy tenure, then the Sum Assured on Death + accrued Bonuses would be payable to the nominee irrespective of the amounts paid earlier as survival benefit. Sum Assured on Death is defined as higher of:
      • .125% of the Basic Sum Assured as chosen at the policy inception or
      • 10 times of annualized premium as being paid
      • Subject to a minimum of 105% of the total premiums paid as on date of death
      • Additional Rider available: LIC’s Accidental Death and Disability Benefit Rider
      • There is mode discount for yearly and half-yearly premium payments
      • Income tax benefit on the premium paid as per Section 80C and on the claims received as per Section 10(10D) of the Income Tax Act.

Additional Benefits of LIC Money Back Policy

Apart from the basic benefits offered by the Money Back Plan, the additional advantages include:

  • Accidental Death and Disability Benefit Rider: It is a rider benefit, which can be availed on payment of an additional premium. In case of the accidental death of the life assured, a benefit up to the sum assured will be paid to the nominee. Moreover, in case of permanent disability due to an accident, an amount equal to the accident benefit sum assured will be given for a period of 10 days. Subsequently, the future premiums of the policy will be waived.
  • Simple Reversionary Bonus: It is decided based on per thousand Sum Assured at the end of each policy year, for which the insured offers guaranteed benefits. Simple Reversionary Bonus is accumulated during the premium paying term, but it is paid to the insured at the end of the policy term or as the death benefit. This bonus is decided as per the performance of the Life Insurance Corporation.
  • Final Addition Bonus: This bonus is paid in case the policy is run for a minimum period. This bonus can be declared when a claim is made in case of death or maturity, provided the policy has been active for a minimum tenure.

How does a Money Back Policy work?

Let’s understand how a Money Back Policy works with an example. The below illustration will show how beneficial a money back policy can be-

Mr. Verma buys a Money Back Policy with the sum assured of Rs. 10 lakh. He buys this policy with 25 years tenure and pays the premium regularly. The plan assures survival benefits of 20% of the basic sum assured after every 5 years of the policy tenure. On maturity, Mr. Verma will also receive 20% of the sum assured with the additional accrued bonuses.

Thus, Mr. Verma gets Rs. 2 lakhs in the interval of every 5 years, i.e. 5th 10th, 15th and 20th year of the policy. At the end of the tenure, i.e. on the 20th year, Mr. Verma will receive Rs. 8 lakhs. On maturity, he will receive Rs. 2 lakh along with the additional bonus and the policy will cease.

In case Mr. Verma dies in the 18th policy year, Rs. 10 lakh will be paid to his family along with the accrued bonuses.

LIC Money Back Policy- Product Specification




Entry Age (Last Birthday)

13 years

50 years

Maturity Age (Last Birthday)


70 years

Policy Term (PT) in years

20 years

Premium Paying Term (PPT) in years

15 years

Premium Paying Frequency

Annual, half-yearly, quarterly and monthly

Sum Assured

Rs 1 Lac

No Limit


Details About Premium of LIC Money Back Policy

The annual premium is mentioned in Rupees. Basic Premium is mentioned below (Tax not included)


Rs 5 Lacs Sum Assured

Rs 10 Lacs Sum Assured

30 Years



40 Years



50 Years




Policy Details

Grace Period: 30 days’ grace period is allowed for premium payment. If policyholder fails to make payment within the grace period, the policy lapses

Policy Termination or Surrender Benefit: The Policy lapses after the end of the Grace Period but it can be revived within 2 years from the first unpaid premium due date. Surrender Benefit is available after premium payment of 3 full years’ according to a table.

Free Look Period: If you would not be pleased with the coverage, and terms and conditions of the policy, you have the option of canceling the policy within 15 days of receipt of the policy documents, provided there has been no claim.


  • Loan is available in this plan after the policy acquires a surrender value after 3 policy years
  • The Policy can be paid up after paying at least 3 years’ premiums but the Paid Up Sum Assured reduces proportionately


In case of suicide committed within 12 months of policy inception only 80% of premiums paid are returned to the nominee. In case of suicide within 12 months of revival, higher of 80% of premiums paid or acquired Surrender Value is paid

Documents Required

Policyholder has to fill up an ‘Application form/ proposal form’ with accurate medical history along with the address proof and other KYC documents. LIC may be required Medical examination in some cases, based on the sum assured and the age of the person.



Q: What does money back plan mean?

Ans: Under money back plan, the insured receives the payments at regular intervals. The period within which the insured receives the money ranges from 4 to 5 years. This plan is very similar to an endowment plan.

Q: What are some of the advantages of LIC Money Back Plan?

 Ans: The key benefits of LIC Money Back Plan include:

  • Death Benefit: In case of the unfortunate death of the policyholder, when the policy is in force, the sum assured along with the Final Additional Bonus and Simple Reversionary Bonuses (if any) will be paid to the nominee. The sum assured payable is as high as 125% of the actual sum assured. This shall not be less than 105% of the total policy premium paid till the date of the death of the insured.
  • Survival Benefits: If the policyholder lives up to the end of the policy term, 20% of the sum assured will be paid to the insured as the survival benefit. This benefit is paid towards the end of 5th, 10th and 15th policy year.
  • Maturity Benefit: In case the life assured makes it through the policy maturity date, 40% of the actual sum assured will be paid to the insured. This will accompany the vested Simple Reversionary Bonuses and Final Additional Bonus (if any).
  • Participation in Profits: The policyholder can receive Simple Reversionary Bonuses if the policy participates in the profit of the Corporation. Final Additional Bonus may also be declared if a claim is made after the death or on maturity, provided that the policy has run for defined minimum tenure.

Q: What is the eligibility criterion to avail this plan?

Ans:  The key points under the eligibility criterion to avail this policy are:

  • Minimum age: 13 years
  • Maximum age: 50 years
  • Maturity age: 70 years

Q: What conditions are not covered by a Money Back Policy?

Ans:  This policy remains inactive in the below situations:

  • If the insured commits suicide, then no claim will be entertained by the insurer
  • War, war-like situation, nuclear attack
  • If the accident occurs while driving under the influence of alcohol or other drugs etc.

Q:  What documents are required to buy a Money Back Policy?

Ans: Below are the documents required for buying a money back plan:

  • Income proof - Income tax returns, salary slips, bank statement, etc.
  • Id proof- Aadhaar card, PAN card, Voter’s id, etc.
  • Age proof- Aadhaar card, voter’s id, passport, driving license, etc.
  • Address proof - Driving License, Voter’s id, Aadhaar card, Passport, etc.

Q: Is the maturity amount received through money back policy is taxable?

The amount you receive at the end of the policy is tax-free under Section 10(10D) of the Income Tax Act, 1961.

Q: What if my money back policy lapses?

Ans: In case your money back policy lapses, you can revive the same within the given grace period of two years, provided you meet the revival conditions and pay the charges as per the norms of the insurer.

Q: How to surrender the money back policy?

Ans: You can surrender the policy only after it accumulates cash value and after 3 years’ premium has been paid. The percentage will be decided based on the policy term and the year the policy was surrendered in.