LIC Money Back Policy - 20 Years was withdrawn from LIC core product offerings. Its updated version is available for sale under the name of LIC New Money Back Plan - 20 Years. These plans are designed to offer periodic survival benefits, unlike traditional endowment policies that offer returns only at maturity. The final maturity benefit is comprised of the remaining sum assured amount plus bonuses.
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It is an online tool offered by LIC that helps you calculate the benefits of the LIC Money-Back Plan - 20 Years plan. The maturity calculator uses the following criteria to calculate the benefits of the plan-
In the case of this plan, the policy term is fixed at 20 years.
Survival benefit is paid on completing 5, 10, and 15 policy years.
On each of these years, policyholders get 20% of the sum assured.
The remaining 40% is paid as maturity benefit along with bonus plus FAB (Final Additional Bonus).
Let’s take a sample to make it easier for you to understand. Assuming that you are 29 years of age in the year 2022. Now with the policy term at 20 years, you will receive the following benefits –
First survival benefit after 5 years at the age of 34
Second survival benefit after 10 years at the age of 39
Third survival benefit after 15 years at the age of 44
Final maturity amount in 20 years at the age of 49
Let’s look at the breakup of benefits based on the above scenario for a basic sum assured (BSA) of Rs. 10 Lakhs.
Policy Year | Age | Description | Benefit | Final Payout |
2027 | 34 years | 1st survival benefit (after 5 years) | 20% of BSA | Rs. 2 Lakhs |
2032 | 39 years | 2nd survival benefit (after 10 years) | 20% of BSA | Rs. 2 Lakhs |
2037 | 44 years | 3rd survival benefit (after 15 years) | 20% of BSA | Rs. 2 Lakhs |
2042 | 49 years | Maturity benefit (after 20 years) | 40% of BSA | Rs. 4 Lakhs |
The above illustration is only applicable if you survive the entire duration of the policy i.e. for 20 years.
What happens if you die within the policy term? Here’s what your benefits will look like in such a case.
Death benefit under LIC’s Money Back Plan - 20 Years is defined as –
(a) 125% of Basic Sum Assured, or
(b) 10 times the Annual Premium
If you die within the policy term of 20 years, you get whichever of the above amount is higher at the time of death.
Taking the above example where Basic Sum Assured was Rs. 10 Lakhs, you would have to pay Rs. 74,500 every year throughout the premium paying term. You can calculate the premium amount using LIC’s premium and maturity calculator.
Death benefit at any point within the policy term will be calculated as –
(a) 125% of Rs. 10,00,000 – Rs. 12.5 Lakhs
(b) 10 times Rs. 74,500 – Rs. 7,45,000
Thus, your nominee will get Rs. 12.5 Lakhs on your death because it is higher than 10 times the annual premium.
Let’s look at different scenarios and calculate the benefits.
Survival benefit – None
Death benefit – Rs. 12.5 Lakhs
Survival benefit – 20% of Rs. 10,00,000 – Rs. 2 Lakhs
Death benefit – Rs. 12.5 Lakhs
1st Survival benefit after 5 years – 20% of Rs. 10,00,000 – Rs. 2 Lakhs
2nd Survival benefit after 10 years – 20% of Rs. 10,00,000 – Rs. 2 Lakhs
Death benefit – Rs. 12.5 Lakhs
1st Survival benefit after 5 years – 20% of Rs. 10,00,000 – Rs. 2 Lakhs
2nd Survival benefit after 10 years – 20% of Rs. 10,00,000 – Rs. 2 Lakhs
3nd Survival benefit after 15 years – 20% of Rs. 10,00,000 – Rs. 2 Lakhs
Death benefit – Rs. 12.5 Lakhs
Note that the above illustration is only for the basic understanding of the benefit breakup for LIC Money Back Plan - 20 Years. It does not factor in the bonus amount because it is neither fixed nor guaranteed.
Therefore, the final maturity benefit amount calculated by the LIC Money-Back Plan - 20 Years Maturity Calculator may be higher than what has been shown in the table above.
As the name suggests, the policy offers a fixed percentage of the money back to the policyholder on surviving certain policy years within the policy term of 20 years. A notable feature of the LIC Money-Back Plan - 20 Years is that on the death of the life assured within the policy term, the nominees are entitled to the entire sum assured on death, irrespective of the survival benefits paid out.
In order to use the LIC Money-Back Plan - 20 Years maturity calculator and the premium calculator, you should be aware of the following eligibility criteria.
Criteria | Minimum | Maximum |
Entry Age | 13 years | 50 years |
Maximum Maturity Age | 70 years | |
Policy Term | 20 years | |
Premium Paying Term | 15 years | |
Sum Assured | Rs. 1 Lakh | No Limit |