LIC New Money Back Plan 721-25 years

LIC New Money Back Plan 25 Years- An Overview

The LIC New Money Back Plan 721 (25 Years) is a limited-premium insurance policy offered by LIC of India that combines life coverage with periodic survival benefits. It is a non-linked, participating, limited-premium-paying life insurance plan with a policy term of 25 years. It offers a balanced combination of protection and savings, with the policyholder receiving periodic payouts during the policy tenure and a lump sum on maturity. This plan suits individuals seeking regular financial returns and insurance coverage. In case of death, the full Sum Assured plus accrued bonuses are payable. This plan also offers maturity benefits and tax advantages under the Income Tax Act.

LIC New Money Back Plan 25 Years - Key Features

• LIC New Money Back Policy 721 (previously plan 821 & 921) is a simple money-back plan with the bonus option.

• The insured needs to pay a premium for 20 years in case the plan continues for 25 years.

• If the Life Insured is alive at the end of the 5th, 10th, 15th, and 20th years, 15% of the Basic Sum Assured is paid as Survival Benefit, and the policy continues.

• The remaining 40% of the Basic Sum Assured is paid on survival until the completion of the policy tenure, along with the accrued bonuses.

• If the life insured dies during the policy term, the entire Sum Assured on Death plus accrued Bonuses will be payable to the beneficiary as a Death Benefit.

• This plan provides add-on coverage as accidental death and disability benefit riders.

Eligibility Criteria of LIC New Money Back Plan 25 Years Plan 721

What are the Benefits of the LIC New Money Back Plan 25 Years (Plan no. 721)?

• Survival Benefit: On survival, 15% of the Sum Assured is paid to the policyholder as a 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

  • Payable at the end of the 20th Policy Year

• Maturity Benefit: If the insured survives till the completion of the policy term, the remaining 40% of the Basic Sum Assured plus accrued bonuses are paid as maturity benefit to the owner of the insurance policy, and the plan terminates 

• Death Benefit: In case of the unfortunate demise of the insurance plan owner, the Sum Assured on Death plus accrued Bonuses would be payable to the beneficiary regardless of the sum paid earlier as survival benefit. Sum Assured on expiry is defined as higher of:

  • 125% of the Basic Sum Assured is chosen by the insured at the beginning of the policy.

  • 10x the annual premium as being paid.

  • On the date of demise, a minimum of 105% of the entire premiums deposited is paid out to the beneficiary.

• Tax Benefits: The LIC policyholder can save on taxes on the claim received and premium paid per section 10(10D) and 80C of the Income Tax Act.

• Bonus: The policyholder receives a particular share of the benefits in bonuses earned by the company as a Final Additional Bonus and Simple Reversionary Bonus.

• Additional Riders: Another special feature of this plan is that it comes with a variety of add-on riders that allow customers to enhance their coverage.

  • Accidental Death and Disability Benefit Rider

  • Accident Benefit Rider

  • New Term Assurance Rider

  • New Critical Illness Benefit Rider

Only one out of the first 2 riders can be added to the plan.

Sample Premium illustration of LIC New Money Back Plan-25 Years

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

LIC New Money Back Plan 25 Years - Policy Details

• Grace Period:  A particular period of grace, i.e.30 days, is provided to the insurance owner during which he/she can pay off all the due premiums. In case of failure, the policy will lapse.

• 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. According to a table, the Surrender Benefit is available after premium payment of 3 full years.

• Free Look Period: During the initial 15 days of the policy's coming into effect, the policyholder gets a free look at its various features. If the policy does not live up to the purchaser's expectations during this period, the procedure may be canceled at zero cost. In the event of cancellation, the first premium payout made by the insured is refunded at minimum an appropriate charge as determined by the insurance provider.

• Loan Facility: With this scheme, policyholders can avail a loan after completing the payment of at least two full years' premiums. The maximum loan amount (as a percentage of the Surrender Value) is:

  • For in-force policies – upto 90%

  • For paid-up policies – upto 80%

What Is Not Covered In LIC New Money Back Policy-25 Years?

If the insured commits suicide within 12 months of the policy enforcement, then only 80% of the premium is paid back to the policy's beneficiary. An acquired Surrender Value or a higher of 80% of premiums paid is provided to the nominee if the insurance holder commits suicide within 12 months of policy revival.

Documents Required

The insured should keep certain handy documents while filling the application form. These are as follows

• Proof of Identity

• Bank account details

• Address proof

• Copy of photograph

• KYC Documents

In some instances, medical examination and income proof may also be required for LIC schemes.

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