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LIC’s New Money Back Plan – 20 Years (Plan 720): Complete
Guide, Benefits, Premium, and Returns
Introduction
Life insurance is not only about financial protection but
also about disciplined savings and long-term wealth planning. In India, the
Life Insurance Corporation of India (LIC) has been a trusted name for decades,
offering a wide range of insurance and investment-linked products. Among these,
LIC’s New Money Back Plan – 20 Years (Plan No. 720) is one of the most
popular traditional insurance plans, especially for individuals looking for periodic
returns along with life cover.
This article provides a detailed, unbiased, and
informative guide on LIC’s New Money Back Plan – 20 Years. We will cover
features, benefits, eligibility, premium structure, money-back payouts,
maturity benefits, tax advantages, and who should consider this plan. The aim
is to help readers make an informed decision while maintaining full compliance
with Google AdSense content policies.
What Is LIC’s New Money Back Plan – 20 Years (Plan 720)?
LIC’s New Money Back Plan – 20 Years is a participating,
non-linked life insurance policy that offers periodic survival benefits
during the policy term and a lump sum maturity benefit at the end of 20
years. In addition, the plan provides financial protection to the nominee
in case of the policyholder’s death during the policy term.
This plan is designed for individuals who want:
- Guaranteed
periodic payouts
- Long-term
savings
- Life
insurance protection
- Tax
benefits under Indian tax laws
Key Features of LIC’s New Money Back Plan – 20 Years
Here are the main highlights of Plan 720:
- Policy
Term: 20 years
- Money
Back Benefit: Paid at regular intervals during the policy term
- Maturity
Benefit: Sum Assured + Bonuses
- Death
Benefit: Full Sum Assured + Bonuses (even if money-back installments
are already paid)
- Participating
Plan: Eligible for LIC bonuses
- Loan
Facility: Available after acquiring surrender value
- Tax
Benefits: Eligible under Sections 80C and 10(10D) of the Income Tax
Act
How Does LIC Money Back Plan – 20 Years Work?
The working of this plan is simple and transparent:
- You
choose a Sum Assured and pay premiums for a fixed duration.
- During
the policy term, you receive periodic survival benefits (money
back).
- At
maturity, you receive the remaining Sum Assured plus accumulated
bonuses.
- In
case of death during the policy term, the nominee receives the full
death benefit, irrespective of money-back payouts already made.
Survival Benefits (Money Back Payouts)
Under LIC’s New Money Back Plan – 20 Years, survival
benefits are paid at predefined intervals:
- 20%
of Basic Sum Assured after 5 years
- 20%
of Basic Sum Assured after 10 years
- 20%
of Basic Sum Assured after 15 years
These payouts help policyholders meet financial goals such
as:
- Children’s
education expenses
- Home
renovation
- Business
capital needs
- Emergency
expenses
Maturity Benefit
On surviving the full 20-year policy term, the policyholder
receives:
- 40%
of Basic Sum Assured, plus
- Vested
Simple Reversionary Bonuses, plus
- Final
Additional Bonus (if declared)
This ensures a significant lump sum at maturity, suitable
for retirement planning or long-term goals.
Death Benefit
In case of the unfortunate death of the policyholder during
the policy term, the nominee will receive:
- Sum
Assured on Death, plus
- Accrued
Bonuses, plus
- Final
Additional Bonus (if applicable)
Important point:
Even if survival benefits have already been paid, they are NOT deducted
from the death benefit.
This makes the plan highly attractive for family protection.
Eligibility Criteria
Minimum and Maximum Entry Age
- Minimum
Age: 13 years
- Maximum
Age: 50 years
Maximum Maturity Age
- 70
years
Premium Payment Options
LIC offers flexible premium payment modes:
- Yearly
- Half-yearly
- Quarterly
- Monthly
(via ECS or NACH)
Premiums depend on:
- Age
at entry
- Sum
Assured
- Premium
payment mode
Grace Period
- 30
days for yearly, half-yearly, and quarterly modes
- 15
days for monthly mode
If premium is not paid within the grace period, the policy
may lapse.
Paid-Up and Revival Options
Paid-Up Policy
If premiums have been paid for at least 3 full years,
the policy acquires a paid-up value.
Policy Revival
A lapsed policy can be revived within 5 years from
the date of first unpaid premium, subject to LIC’s revival terms and medical
requirements.
Loan Facility
LIC’s New Money Back Plan – 20 Years allows policyholders to
avail a loan against the policy once it acquires surrender value.
Key points:
- Loan
amount depends on surrender value
- Interest
is charged as per LIC’s prevailing rates
- Useful
for emergency liquidity
Bonuses Under LIC Money Back Plan – 20 Years
This is a participating policy, which means it is
eligible for LIC bonuses:
- Simple
Reversionary Bonus – Declared annually
- Final
Additional Bonus – Paid at maturity or death (if applicable)
Bonuses depend on LIC’s financial performance and are not
guaranteed.
Tax Benefits
Section 80C
Premiums paid are eligible for deduction up to ₹1.5 lakh per
year under Section 80C, subject to prevailing tax laws.
Section 10(10D)
Maturity proceeds, survival benefits, and death benefits are
generally tax-free, provided policy conditions are met.
Tax laws are subject to change. Policyholders should consult
a tax advisor.
Advantages of LIC’s New Money Back Plan – 20 Years
- Guaranteed
periodic payouts
- Strong
life insurance coverage
- Backed
by LIC’s trust and stability
- Suitable
for conservative investors
- Flexible
premium payment options
- Loan
facility available
- Tax-efficient
savings
Limitations of the Plan
- Returns
may be lower compared to market-linked investments
- Long-term
commitment required
- Bonuses
are not guaranteed
- Not
suitable for aggressive investors seeking high returns
Who Should Buy LIC Money Back Plan – 20 Years?
This plan is ideal for:
- Salaried
individuals seeking safe savings
- Self-employed
professionals
- First-time
insurance buyers
- Families
needing periodic cash flow
- Conservative
investors preferring low risk
LIC Money Back Plan vs Term Insurance
|
Feature |
Money Back Plan |
Term Insurance |
|
Life Cover |
Yes |
Yes |
|
Savings |
Yes |
No |
|
Periodic Payouts |
Yes |
No |
|
Premium |
Higher |
Lower |
|
Risk Coverage |
Moderate |
High |
For complete financial planning, many experts recommend
combining a term plan with a money-back or investment plan.
Important Things to Consider Before Buying
- Assess
your long-term financial goals
- Compare
with other LIC and non-LIC plans
- Understand
premium affordability
- Read
policy brochure carefully
- Avoid
buying solely for returns
Frequently Asked Questions (FAQs)
Is LIC’s New Money Back Plan – 20 Years safe?
Yes, LIC policies are considered highly reliable due to
government backing and long operational history.
Can I stop the policy midway?
Yes, but surrender value applies only after minimum premium
payment conditions are met.
Are returns guaranteed?
Only survival benefits are guaranteed. Bonuses depend on
LIC’s performance.
Is this plan good for retirement?
It can supplement retirement income but should not be the
sole retirement plan.
Final Verdict
LIC’s New Money Back Plan – 20 Years (Plan 720) is a balanced
insurance-cum-savings product suitable for individuals who value safety,
periodic returns, and life protection. While it may not offer high returns like
equity-linked plans, it provides stability, discipline, and peace of mind,
which many Indian families prioritize.
Before investing, compare it with other financial products
and ensure it aligns with your financial objectives.
Disclaimer
This article is for educational and informational
purposes only. Policy features, benefits, and tax laws may change. Always
verify details from official LIC sources or consult a licensed insurance
advisor before purchasing any insurance policy.
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