LIC (Life Insurance Corporation of India) is one of the most trusted and reliable insurance providers in India. Over the years, it has launched various insurance policies that cater to different needs of individuals. One such policy is LIC's New Money Back Plan- 25 Years Plan- 921.
This policy is a non-linked, participating, and limited premium payment policy. It offers life insurance coverage along with periodic returns. The policy term is for 25 years, and the premium payment term is for 20 years. The policyholder can choose the premium payment frequency as per their convenience - yearly, half-yearly, quarterly, or monthly.
Here are some of the key features of LIC's New Money Back Plan- 25 Years Plan- 921:
- Life insurance coverage: The policy offers life insurance coverage for the entire policy term of 25 years. In case of the unfortunate death of the policyholder during the policy term, the nominee will receive the sum assured along with any bonuses accrued till date.
- Money-back benefits: The policy offers money-back benefits to the policyholder at specific intervals during the policy term. The policyholder will receive 15% of the sum assured at the end of the 5th, 10th, and 15th policy year, and 20% of the sum assured at the end of the 20th policy year. This ensures that the policyholder receives periodic returns and can plan their finances accordingly.
- Survival benefits: In case the policyholder survives the entire policy term, they will receive the sum assured along with any bonuses accrued till date at the end of the policy term.
- Bonus: The policy participates in the profits of LIC and is eligible for any bonuses declared by the corporation. The bonuses are declared at the end of each financial year and are added to the policy corpus, increasing the final payout.
- Loan facility: The policyholder can avail of a loan against the policy in case of any financial emergencies.
- Tax benefits: The policy offers tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961.
- Surrender value: The policy acquires a surrender value after payment of premiums for three full years. The surrender value is a percentage of the total premiums paid, excluding the premiums for the first year. If the policyholder surrenders the policy after the acquisition of the surrender value, they will receive the surrender value along with any bonuses declared till date.
- Grace period: The policy offers a grace period of 30 days for the yearly, half-yearly, and quarterly premium payment modes, and 15 days for the monthly premium payment mode. The policy will remain in force during the grace period, and the policyholder can make the payment without incurring any late payment fees.
- Revival: In case the policy lapses due to non-payment of premiums, the policyholder can revive the policy within two years from the due date of the first unpaid premium. The policyholder will need to pay the outstanding premiums along with any interest and undergo a medical examination if required.
- Riders: The policy offers additional coverage options through riders. The policyholder can choose from the following riders:
- LIC's Accidental Death and Disability Benefit Rider
- LIC's New Term Assurance Rider
- Age eligibility: The policy is available for individuals between the ages of 13 years and 45 years.
- Loan repayment: The policyholder can repay the loan along with interest in installments, or in a lump sum at the time of maturity. In case of the unfortunate death of the policyholder, the outstanding loan amount along with any interest will be deducted from the sum assured.
- Maturity benefit: If the policyholder survives the entire policy term and all the premiums have been paid, they will receive the sum assured along with any bonuses declared by LIC at the time of maturity.
- Premium rebate: The policy offers a rebate on the premium amount if the policyholder opts for a high sum assured. The rebate ranges from 2% to 10% of the premium amount, depending on the sum assured amount.
- Free look period: The policy offers a free look period of 15 days from the date of receipt of the policy document. If the policyholder is not satisfied with the terms and conditions of the policy, they can return the policy within the free look period and receive a refund of the premium paid, after deducting any expenses incurred by LIC.
- Nomination facility: The policyholder can nominate a person who will receive the benefits of the policy in case of their unfortunate demise during the policy term. The policyholder can also change the nominee during the policy term.
- Premium payment modes: The policyholder can choose from four premium payment modes - yearly, half-yearly, quarterly, or monthly, as per their convenience.
- Guaranteed Surrender Value: The policy offers a Guaranteed Surrender Value (GSV) after payment of premiums for at least three years. The GSV is a percentage of total premiums paid, excluding the premium for the first year.
To understand the policy better, let us take an example. Suppose a 30-year-old individual buys LIC's New Money Back Plan- 25 Years Plan- 921 with a sum assured of Rs. 10 lakhs. The premium payment term is for 20 years, and the premium payment frequency is yearly. The annual premium amount is Rs. 60,080.
In this case, the policyholder will receive Rs. 1.5 lakhs at the end of the 5th, 10th, and 15th policy year, and Rs. 2 lakhs at the end of the 20th policy year. In case the policyholder survives the entire policy term, they will receive Rs. 10 lakhs along with any bonuses declared by LIC.
In case of the unfortunate death of the policyholder during the policy term, the nominee will receive the sum assured of Rs. 10 lakhs along with any bonuses accrued till date.
Explain With A Simple Example
Suppose, Mr. A, a 30-year-old non-smoker, purchases LIC's New Money Back Plan- 25 Years Plan- 921 with a sum assured of Rs. 10 lakhs and a policy term of 25 years. Mr. A opts for a yearly premium payment mode and pays an annual premium of Rs. 45,000.
In this case, Mr. A will receive periodic payments from the policy during the policy term as per the money-back schedule. Let's assume that the money-back schedule for the policy is as follows:
15% of the sum assured is paid after completion of 5th, 10th, and 15th policy years, i.e., Rs. 1.5 lakhs each.
The remaining 40% of the sum assured, i.e., Rs. 4 lakhs along with any bonuses declared by LIC, is paid on maturity after the completion of the 25th policy year.
So, Mr. A will receive Rs. 1.5 lakhs each after the completion of the 5th, 10th, and 15th policy years, i.e., a total of Rs. 4.5 lakhs. Additionally, on maturity after the completion of the 25th policy year, Mr. A will receive Rs. 4 lakhs along with any bonuses declared by LIC.
If Mr. A unfortunately passes away during the policy term, his nominee will receive the sum assured, i.e., Rs. 10 lakhs, regardless of any periodic payments already made.
This is just a simple example to illustrate how LIC's New Money Back Plan- 25 Years Plan- 921 works. The actual benefits and payouts may vary depending on the sum assured, premium payment mode, and other factors. It is recommended to read the policy document carefully and understand the terms and conditions before purchasing the policy.
Conclusion
In conclusion, LIC's New Money Back Plan- 25 Years Plan- 921 is an ideal policy for individuals who want life insurance coverage along with periodic returns. The policy offers financial security and ensures that the policyholder receives periodic returns, which can help in financial planning. It is advisable to consult with a financial advisor before buying the policy to understand the terms and conditions thoroughly.
FAQ
Q: What is the minimum and maximum age for purchasing the policy?
A: The minimum age for purchasing the policy is 13 years, and the maximum age is 45 years.
Q: What is the minimum and maximum sum assured amount for the policy?
A: The minimum sum assured amount for the policy is Rs. 1 lakh, and the maximum sum assured amount is subject to underwriting.
Q: What is the premium payment term for the policy?
A: The premium payment term for the policy is 20 years.
Q: Is loan facility available under the policy?
A: Yes, loan facility is available under the policy after payment of premiums for at least three years.
Q: What is the revival period for the policy?
A: The revival period for the policy is two years from the date of the first unpaid premium.
Q: Are riders available with the policy?
A: Yes, riders such as accidental death benefit and critical illness rider are available with the policy at an additional premium.
Q: Can I surrender the policy before the completion of the policy term?
A: Yes, you can surrender the policy before the completion of the policy term. The surrender value will be subject to terms and conditions of the policy.
Q: How is the bonus calculated under the policy?
A: The bonus is declared by LIC based on the performance of the participating fund of the company. The bonus is calculated as a percentage of the sum assured and is paid on maturity or death of the policyholder.
These are some of the frequently asked questions about LIC's New Money Back Plan- 25 Years Plan- 921. It is recommended to read the policy document carefully and understand the terms and conditions before purchasing the policy. Additionally, you can contact LIC representatives or visit their website for more information.
