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LIC Money Back policies are life insurance plans that are a combination of insurance and savings. Here, along with survival benefits, maturity benefits are also paid out every 5 years that help in meeting various financial requirements of life.
Table of Contents:
Types of LIC Money Back Plans
LIC of India offers 7 money back plans to choose from.
- New Money Back Policy – 20 years
- New Money Back Policy – 25 years
- LIC’s Bima Shree
- LIC’s Jeevan Shiromani
- LIC’s New Bima Bachat
- LIC’s New Children’s Money Back Plan
- LIC’s Jeevan Tarun
Eligibility Criteria
To purchase the aforementioned plans, following general conditions must be fulfilled:
| Particulars | Details |
| Entry Age | 90 days – No Limit |
| Maturity Age | 25 – 75 years |
| Minimum Premium Amount | NA |
| Minimum Sum Assured | Rs. 1,00,000 – No Limit |
| Policy term | 9 – 25 years |
Documents Required to Purchase Plans
Following documents are needed at the time of purchase of any of the money back plans by LIC:
- Application Form/Proposal Form (duly filled and signed)
- Age Proof (birth certificate, PAN card, Aadhar Card, etc.)
- Photo ID Proof (passport, Aadhar Card, voter’s ID card, etc.)
- Address Proof (ration card, utility bills, Aadhar card, etc.)
- Income Proof (salary slips, copy of Income Tax Return filed, etc.)
- Passport-sized photograph(s)
- Medical Reports (in case required)
LIC Money Back Plans
1. LIC’s New Money Back Policy – 20 Years: This is a non-linked participating plan that offers a combination of death cover and periodic payment in the form of survival benefit.
|
Particulars |
Details |
|
Entry Age |
13-50 years |
|
Maturity Age |
70 years |
|
Sum Assured |
Rs. 1 lakh – no upper limit |
|
Policy Term |
20 years |
|
Minimum Premium |
10 X Annualised Premium |
|
Features |
● Loan facility also available ● Offers grace period of 30 days in case premium payment mode is quarterly, half yearly and yearly. This duration is 15 days for monthly payments ● Accidental death and disability benefit rider helps enhance the coverage |
Accidental death and disability benefit rider gives extra coverage to the policyholder. The eligibility criteria to avail the benefit is mentioned here:
| Particulars | Details |
| Minimum Entry Age | 18 years |
| Maximum Entry Age | Can be bought anytime |
| Maturity Age | 70 years |
| Minimum Accidental Sum Assured Benefit | Rs. 1 lakh |
2. LIC Money Back Policy – 25 Years: This is a simple endowment plan with bonus and scheduled payment facilities. The tenure of this plan is 25 years. More details of this plan have been mentioned here:
|
Particulars |
Details |
|
Entry Age |
13-45 years |
|
Maturity Age |
70 years |
|
Sum Assured |
Rs. 1,00,000 – no upper limit |
|
Policy Term |
25 years (fixed) |
|
Minimum Premium |
10 X Annualised Premium |
|
Features |
● Participating non-linked policy gives bonus benefit ● No loan facility available with the plan ● Premium paying term is 20 years ● Policyholders are entitled to receive death benefits, survival benefits or maturity benefits (whichever is applicable) |
3. LIC Bima Shree: Designed for high net worth individuals, LIC Bima Shree is a traditional life insurance policy. It comes with the option to choose a policy term of 14, 16, 18 or 20 years and gives customers guaranteed additions and loyalty additions.
| Particulars | Details |
| Policy Term | 14, 16, 18 and 20 years |
| Entry Age | 8-55 years (for 14-year policy term)
8-51 years (for 16-year policy term) |
| Maturity Age | 69 years (for 14-year policy term)
67 years (for 16-year policy term) |
| Sum Assured | Rs. 10 lakh-No Limit |
| Minimum Premium | 10 X Annualised Premium |
| Features | ● Guaranteed additions and loyalty additions in the policy
● Payouts are given 4 years before the end of the policy term ● Offers the option of adding any of the 5 riders at an additional premium:
|
4. LIC Jeevan Shiromani: A non-linked money back plan, offers life protection as well as encourages savings. Particularly designed for high net worth individuals, offers regular payouts along with lump sum amount as a maturity benefit. It also comes with an inbuilt critical illness cover and offers three optional riders for customers to choose from.
|
Particulars |
Details |
|
Policy Term |
14, 16, 18 and 20 years |
|
Entry Age |
8-55 years (for 14-year policy term) 8-51 years (for 16-year policy term) |
|
Maturity Age |
69 years (for 14-year policy term) 67 years (for 16-year policy term) |
|
Sum Assured |
Rs. 1 crore- No Limit
|
|
Minimum Premium |
10 X Annualised Premium |
|
Features |
● As soon as one complete year’s premium is paid, paid up is given ● Avail loan benefits after a year of the policy ● Inbuilt critical illness rider ● Maximum of 3 riders can be added from – Accident benefit rider, Accidental death and disability benefit rider and New term assurance rider |
5. LIC New Bima Bachat: The policy offers the dual benefit of protection as well as savings. It also offers survival benefits in instalments at specific intervals during the policy tenure.
| Particulars | Details |
| Policy Term | 9, 12 or 15 years |
| Entry Age | 15-66 years (for 9-year term)
15-63 years (for 12-year term) |
| Maturity Age | 75 years |
| Sum Assured | Rs. 35,000 (for 9-year term)
Rs. 50,000 (for 12-year term) |
| Minimum Premium | 10 X Annualised Premium |
| Features | ● Offers liquidity in the form of loan facility
● Rebates on higher sum assured |
6. LIC New Children’s Money Back Plan: It is a participating, non-linked money back plan that offers risk cover and survival benefits for children. The plan is designed to meet the diverse financial needs of growing children, including their education and wedding costs.
| Particulars | Details |
| Policy Term | 25 minus age at entry |
| Entry Age | 0-12 years |
| Maturity Age | 25 years |
| Sum Assured | Rs. 1 lakh – No Upper Limit |
| Minimum Premium | 10 X Annualised Premium |
| Features | ● Rebates on high premium amount
● Loan facility available ● Comes with maturity, survival and death benefits ● Option of adding Premium Waiver Benefit Rider |
7. LIC Jeevan Tarun: This is a participating non-linked limited premium pay plan. It offers a combination of savings and protection for children. It also comes with a loan facility on accrued surrender value.
| Particulars | Details |
| Policy Term | 25 minus age at entry |
| Entry Age | 90 days -12 years |
| Maturity Age | 25 years |
| Sum Assured | Rs. 75,000-No Limit
|
| Minimum Premium | 10 X Annualised Premium |
| Features | ● It offers a mix of saving and protection for children
● Maturity benefit at the age of 25 for children ● Option to choose any of 4 survival benefits ● Can be purchased by parent or grandparent of a child |
Claim Process
Given below are the steps involved in the claim process:
- Intimate the company regarding the claim either online or via SMS or by visiting the branch office
- Submit the claim form along with the necessary documents at the LIC branch which issued the policy at least 5-7 days prior to the maturity date of the policy
- Insurer will scrutinize the claim details and inform the claimant in case any other document is required
- Once all the required documents are received and verified, insurer settles the claim and the amount is credited to the insured’s/claimant’s account using electronic modes of transfer
Documents Required to Process Claims
The following documents are required for filing a claim:
For maturity claims
- Original policy document
- Discharge Voucher (Form 3825)
- NEFT Mandate Form
- Self Attested Photo ID proof and Address proof of the nominee (passport, Aadhar card, voter’s card, etc.)
- A cancelled bank cheque or a copy of the policyholder’s bank passbook
Note: In case the amount payable on maturity is lesser than or equal to Rs. 60,000, cheques are released by the company without calling for policy document or discharge receipt (only if all premiums dues are paid).
For death claims
- Death claim form (duly filled in and signed)
- Attested copy of death certificate issued by local municipal authority
- Original policy documents
- ID proof of the beneficiary and age proof of the insured
- Medical Certificate (Proof for the cause of death)
- Police FIR (for unnatural deaths)
- Postmortem report (for unnatural deaths)
- Hospital certificate/records (in case the death was caused by an illness)
- Employer certificate and cremation certificate (in case of early death)
Time Taken to Settle Claims
LIC claims are usually settled within 30 days from the date of receipt of the last necessary document.
Policy Revival
Non payment of premium even during the grace period can make the policy to lapse. The plan can be revived within 2 years from the date of the first unpaid premium. The policyholder needs to pay all the arrears of unpaid premiums with interest to revive the lapsed policy.
Riders Available
Additional benefits that can be added to basic insurance plans are known as riders. They help to enhance the coverage of the basic plan. One needs to pay extra premium in order to avail these riders. The riders that can be added to LIC money back plans are:
- Term Assurance Rider: Is a pure term rider which doubles the death benefit
- Accidental Death and Disability Benefit Rider: This rider aids the policyholder (or his/her dependents) in case he/she experiences disability or dies due to an accident
- Critical Illness Rider: This rider enables the policyholder to get financial aid on the diagnosis of a critical illness
- Waiver of Premium Rider: This rider waives off all the future premium payments in case the policyholder becomes critically ill, disabled, or seriously injured
Exclusions
LIC’s money back plans offer comprehensive coverage, but there are certain situations where claims are not entertained. Some of these cases are:
- In case the policyholder commits suicide within 12 months of purchasing the policy, only 80% of the premium amount paid is returned to the beneficiary. However, no death benefit is paid by the insurer
- No benefit can be availed by the beneficiary, if the premium is paid for less than 12 months
- Voluntary participation in riots , terrorism, war, etc.
Advantages of Purchasing LIC’s Money Back Plans
Following are the benefits of purchasing money back plans offered by LIC:
- Survival Benefits: A part of the sum assured is paid to the policyholder at regular intervals till maturity. On maturity, the remaining sum assured along with bonuses (if any) is paid to the policyholder as survival benefit
- Death Benefits: On the demise of the policyholder, while the policy is in force, the nominee gets the death benefit which includes the sum assured and accumulated bonus
- Maturity Benefit: On the maturity of the money back policy, the insured receives a maturity benefit which includes the sum assured and accrued reversionary bonuses announced by the company.
- Policyholders also have the option to pay top-up premium in order to get additional benefits like adding riders to enhance the basic plan benefits
- A simple reversionary bonus is paid to the policyholder at the end of the policy term or as death benefit. It is accumulated during the term of the policy and based on the performance of the company
- Premium paid on LIC’s Money Back Policy – 20 Years, is tax deductible as per Section 80C of the Income Tax Act. There is also a tax benefit on the claims received according to Section 10 (10D) of the same act.
- LIC’s Money Back Policy – 20 Years comes with the advantage of offering a mode discount for yearly and half-yearly premium payments
FAQs
Q1. What is a policy loan?
A policy loan is a loan that is issued by the insurance company by using the cash value of the policy as collateral. ‘Life Insurance Loan’ is another term used for Policy Loan. If the borrower fails to repay the loan amount, the money is deducted or withdrawn from the death benefit.
Q2. What is ‘cooling–off period’?
After purchasing a plan, if the policyholder is not happy or satisfied with the policy’s ‘Terms and Conditions’ he/she might return the policy within 15 days from the date of policy issued along with policy receipt and a bond stating the reason to return the policy. This period is called cooling-off period. The insurance company then cancels it and returns the paid premium amount after deducting some amount as the proportionate risk premium which is applicable for riders and basic plans only (if any). Moreover, the insurance company’s rules will be levied on this process.
Q3. Which Indian banks are authorised by LIC to collect the premium amount through phone and internet banking facility?
LIC of India has authorised some banks to collect LIC premiums. These banks include ICICI Bank, HDFC Bank, Citibank, UTI Bank, Corporation Bank, Federal Bank and Bank of Punjab.
Q4. Can LIC money back policies be surrendered online?
No, the policies cannot be surrendered online. The policies can be surrendered only at the insurance company’s branch office.
Q5. What is the penalty in case premiums on LIC’s money back policies are not paid on time?I
In case premium is not paid on or before the due date, the policy enters a grace period. The policy is considered to have been lapsed in case the premium remains unpaid even during the grace period. However, the policy can be revived by paying the premiums due along with interest and revival charges (if any).
Q6. Are money back policies transferable?
No, money back policies are non-transferable. However, the policyholder is free to assign his/her policy in another person’s name.