LIC of India launched its much-awaited New Money Back Plan 720 (UIN: 512N280V03) on 18th November 2024. This is a traditional, non-linked, non-participating savings-cum-insurance plan that offers guaranteed returns, survival benefits every five years, and lump sum maturity benefits.
It’s ideal for individuals who want periodic payouts and still want life coverage for 20 years.
🔍 What is a Money Back Policy?
A Money Back policy is a type of life insurance plan where a percentage of the Sum Assured is paid back to the policyholder at regular intervals, and the remaining benefits are paid at maturity or upon death. It combines:
✅ Savings
✅ Insurance
✅ Periodic returns
The LIC New Money Back Plan 720 returns 20% of the Sum Assured at the end of the 5th, 10th, and 15th year, and the remaining 40% + Bonuses on maturity (at the end of 20 years).
📋 Key Features of LIC New Money Back Plan 720
| Feature | Details |
|---|---|
| Plan Type | Traditional, Non-Linked, Non-Participating |
| Policy Term | 20 Years |
| Premium Paying Term | 15 Years |
| Survival Benefit | 20% of Sum Assured at 5th, 10th, and 15th year |
| Maturity Benefit | 40% of Sum Assured + Bonus + Final Addition Bonus |
| Death Benefit | 125% of Sum Assured or 7x annual premium (whichever is higher) + Bonuses |
| Minimum Sum Assured | ₹2,00,000 |
| Maximum Age at Entry | 50 Years |
| Maximum Maturity Age | 70 Years |
| Premium Mode | Yearly, Half-Yearly, Quarterly, Monthly (NACH) |
| Loan & Surrender | Available after 1 full year |
| Riders | Accidental Death, Disability Rider, Term Rider |
| Tax Benefits | Under 80C and 10(10D) |
🎯 Eligibility Criteria
| Parameter | Details |
|---|---|
| Minimum Entry Age | 13 Years (Completed) |
| Maximum Entry Age | 50 Years |
| Maximum Maturity Age | 70 Years |
| Basic Sum Assured | ₹2,00,000 (in multiples of ₹25,000) |
| Loan Facility | Available after 1 full premium year |
| Surrender Option | Available after 1 full premium year |
| Policy Term | Fixed: 20 years |
| Premium Paying Term | Fixed: 15 years |
💰 Premium Rebates
✅ Mode Rebate
| Payment Mode | Rebate (%) |
|---|---|
| Yearly | 2% |
| Half-Yearly | 1% |
| Quarterly/Monthly | Nil |
✅ High Sum Assured Rebate
| Sum Assured | Rebate per ₹1000 SA |
|---|---|
| ₹2,00,000 to ₹4,75,000 | Nil |
| ₹5,00,000 and above | ₹3 per ₹1000 |
🏆 Benefits of LIC Money Back Plan 720
1. Survival Benefits
Paid every 5 years — 20% of Sum Assured each time.
| Time Period | Benefit |
|---|---|
| End of 5th Year | 20% of Sum Assured |
| End of 10th Year | 20% of Sum Assured |
| End of 15th Year | 20% of Sum Assured |
2. Maturity Benefit
On surviving 20 years:
✅ 40% of Sum Assured
✅ + Vested Simple Reversionary Bonus
✅ + Final Additional Bonus (FAB)
3. Death Benefit
In case of death during policy term:
✔ 125% of Sum Assured or 7 times annual premium (whichever is higher)
✔ + Vested Bonuses
✔ + Final Additional Bonus (if any)
Minimum death benefit: 105% of total premiums paid.
4. Tax Benefits
- Premiums are eligible for deduction under Section 80C
- Maturity & Death Benefits are tax-free under Section 10(10D)
📊 LIC Money Back Plan 720 – Example Case Study
Meet Nitin 👨💼
| Details | Values |
|---|---|
| Age | 25 Years |
| Policy Term | 20 Years |
| Premium Paying Term | 15 Years |
| Sum Assured | ₹5,00,000 |
| Yearly Premium | ₹39,179 (1st Yr), ₹38,335 (from 2nd Yr) |
| Total Premium Paid | ₹5,75,869 (for 15 years) |
✅ Survival Benefits Received
| Year | Amount Received | Remarks |
|---|---|---|
| 5th Year | ₹1,00,000 | 20% of ₹5L |
| 10th Year | ₹1,00,000 | 20% of ₹5L |
| 15th Year | ₹1,00,000 | 20% of ₹5L |
Total Money Back Before Maturity: ₹3,00,000
✅ Maturity Benefits (At End of 20 Years)
| Component | Amount |
|---|---|
| 40% of Sum Assured | ₹2,00,000 |
| Bonus + FAB (Approx.) | ₹4,10,000 |
| Total Maturity | ₹6,10,000* |
(*Excludes survival benefits)
✅ Death Benefits Table (Normal vs Accidental)
| Year of Death | Age | Premium Paid | Normal Life Cover | Accidental Life Cover |
|---|---|---|---|---|
| 2037 | 42 | ₹4,60,864 | ₹9,95,000 | ₹14,95,000 |
Note: Survival benefits already paid are not deducted from death claim.
🔁 Surrender, Loan, and Paid-up Value
1. Surrender Value
Can be surrendered after 1 full policy year.
2. Loan Facility
Available after 1 year of full premium paid.
3. Paid-up Value
If policyholder stops premium after minimum 1 year:
Paid-up Formula:Paid-up SA = (No. of premiums paid / Total premiums to be paid) × Sum Assured
Example:
Paid 10 of 15 premiums for ₹5,00,000 SA
= 10/15 × ₹5,00,000 = ₹3,33,333
🛡 Riders & Additional Info
Available Riders:
- Accidental Death and Disability Benefit Rider
- Term Rider
Other Terms:
| Clause | Detail |
|---|---|
| Suicide Clause | If death by suicide within 12 months – 80% premium returned. After 12 months – full claim applicable. |
| Cooling-off Period | 30 days from receipt of policy document to cancel policy. |
| Revival | Within 5 years from last unpaid premium. |
| Proposal Forms | Form No. 300 / 340 |
| Date Backing | Available |
✅ Who Should Buy This Policy?
LIC New Money Back 720 is ideal for:
🔸 Salaried individuals who need periodic liquidity
🔸 Parents saving for child’s future expenses (every 5 years)
🔸 Individuals seeking low-risk investment + insurance
🔸 Taxpayers who want tax benefits with guaranteed returns
📎 Summary Table
| Feature | Details |
|---|---|
| Policy Term | 20 Years |
| Premium Term | 15 Years |
| Payout | 20% × 3 times (5,10,15 yr) + 40% + Bonus at Maturity |
| Total Premium Paid | ₹5,75,869 |
| Total Benefit | ₹9,10,000+ |
| Risk Cover | 125% SA + Bonuses till 20 years |
| Loan/Surrender | After 1 year |
| Tax Benefits | 80C + 10(10D) |
