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Home » Blog » Types of Insurance » Lic Money Back Plans Review

Lic Money Back Plans Review

April 1, 2016 By vijay kumar

Lic Money Back Plans Review

Contents

  • 1 Money Back Policy
  • 2 Lic Money Back Plan Features
  • 3 Money Back Plan Benefits
  • 4  Lic Money Back Plans

Money Back Policy

Money back policy is a popular insurance policy offered by Life Insurance Corporation of India. Lic Money back policy provides coverage during the policy term. Here in Money back plans the maturity benefits are paid in installments. Unlike endowment plans, these money back plans provides partial survival benefits as periodic payments during the policy term. These benefits will be provided under Lic Money back plans so long as the policy holder is alive.

Lic Money Back Plan Features

  • Money back plans combine the dual benefits of savings and insurance.
  • These Lic money back plans are somewhat similar to endowment plans in terms of features.
  • The difference is, in endowment plan, the policy holder receives the maturity benefit at the end of the policy term.
  • But, in money back plans ‘partial survival benefits’ are paid to the policy holder at specific intervals during the policy term.
  • The policy holder may receive the survival benefits in fixed proportions or variable proportions during the policy term as per the terms and conditions of the policy.
  • The benefits received by the policyholder at specific intervals are tax free according to prevailing tax laws. For information about Tax on Insurance Policies refer www.taxqueries.in.

Money Back Plan Benefits

Maturity Benefit:

In Lic Money Back Plan, policy holder will get lump sum amount as Maturity Benefit on the payment of all the due premiums until the completion of policy period.

Death Benefit:

If the policyholder dies during the policy period, the nominee or beneficiary receives the entire sum assured along with the accrued bonus (if any) without the deduction of survival benefits that had already been paid to the insured.

Example:-Naveen has taken out a 20 year money back plans/policy from XYZ insurance company. The sum insured is Rs. 20,0,00. He chose o take out a money back plan as he wanted to enjoy a return on his savings while he is alive. He has nominated his wife Sheela to be the beneficiary of the policy. Under the money back plans/policy that he has taken out he will receive 25% of the survival benefit after 5,10,15 years and remaining balance of 25% of the survival benefit will be payable in the 20th year.
However, Tragedy strikes the family.  Naveen dies in a car accident. Sheela is a housewife and was financially dependent on Naveen.
Naveen‘s death occurred in the 11th year after he took out the policy. He had already received a percentage of the survival benefit (Rs. 10,00,000) in the 5th and 10th years.
In this case Sheela will receive the entire Rs. 20,00,000 as the sum insured, even though a percentage (Rs. 10,00,000) of the sum insured has already been paid to Naveen in the 5th and 10th years of the policy.

  

MONEY BACK PLAN EXAMPLE

Tenure of policy: 20 years.
Sum Assured     : Rs. 10,00,000.
Premium              : Rs. 75,000 / year.
Total paid             : 75,000 x  15 years (premium paying term 15 years only).
Survival benefits : 20% for every 5 years                                     : 2,00,000  5th year                                                 : 2,00,000  10th year                              : 2,00,000  15th year
Money received in case of Death   :  Rs. 10,00,000.
Money received in case of survival:  Rs. 4,00,000 + Bonus +FAB.
*All figures / information are approximate and actual amount / information is subject to availability and current market trends of LIC.

 Lic Money Back Plans

  • Money Back Plan 20 Years
  • Money Back Plan 25 Years
  • Lic Jeevan Shagun Policy
  • Lic New Bima Bachat Policy
  • New Children money back policy
  • Lic Jeevan Tarun Policy 834

Filed Under: Types of Insurance Tagged With: Best money back policy, lic money back plans

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