LIC New Money Back Plan 720 all details

LIC New Money Back Plan 720 is a unique life insurance policy that combines the advantages of protection and savings. As a money-back plan, it ensures periodic payouts during the policy term, offering liquidity alongside long-term financial security. Here’s an in-depth exploration of the features, benefits, and terms of this newly launched plan.

Also see: LIC Jeevan Tarun Plan 734

Eligibility Conditions

To purchase LIC New Money Back Plan 720, certain eligibility conditions must be met:

Age Requirements:

• Minimum Age: 13 years.
• Maximum Age: 50 years.

The plan is designed to accommodate a wide age range, making it suitable for both young individuals and middle-aged investors.

Policy Term:

• The policy has a term of 20 years, ensuring extended financial protection.

Premium Paying Term:

• Premiums are payable for 15 years, with no premiums required in the final five years of the policy.

Sum Assured:

• Minimum: ₹2 lakhs, ensuring accessibility for a wide range of income levels.
• Maximum: No limit, subject to income verification and LIC’s approval.

These conditions make the plan versatile and adaptable to the financial planning needs of various individuals.

Payment Modes:

• Flexible premium payment options include yearly, half-yearly, quarterly, and monthly payments.
• Monthly payments are facilitated via salary saving schemes or NACH, requiring 3 months’ advance premium.

Also see: LIC Nivesh Plus Plan 749

Benefits of LIC New Money Back Plan 720

Let us understand the benefits of LIC New Money Back Plan 720 with an example.

Scenario:

• Age at Policy Purchase: 30 years
• Sum Assured: ₹10 lakhs
• Policy Term: 20 years
• Premium Paying Term: 15 years

Premium Details

• Annual Premium (Year 1): ₹77,409 (excluding GST)
• Annual Premium (Subsequent Years): ₹79,150 (adjusted GST rate)
• Total Premium Paid Over 15 Years: ₹11,61,135 (excluding GST)

Survival Benefits (Money Back)

• 5th Year: 20% of Sum Assured = ₹2 lakhs
• 10th Year: 20% of Sum Assured = ₹2 lakhs
• 15th Year: 20% of Sum Assured = ₹2 lakhs

Total Survival Benefits: ₹6 lakhs

Maturity Benefits

Upon policy maturity at the end of the 20th year:

1. Sum Assured on Maturity: 40% of Basic Sum Assured = ₹4 lakhs

2. Accrued Bonus:

• Annual Bonus: ₹36 per ₹1,000 Sum Assured
• Total for 20 Years = ₹36,000 × 20 = ₹7,20,000

Final Additional Bonus: ₹40,000

Total Maturity Amount: ₹11,60,000

Total Benefits

• Survival Benefits: ₹6 lakhs
• Maturity Amount: ₹11,60,000
• Grand Total: ₹17,60,000

Total Premium Paid vs. Returns

• Premium Paid (15 years): ₹11,61,135 (excluding GST)
• Total Returns: ₹17,60,000

This example shows how LIC New Money Back Plan 720 offers adequate returns on investment while providing life insurance coverage by combining periodic payouts, maturity benefits and bonuses. We have said this even if no accident happens to the policy holder

Also see: LIC Bima Jyoti Plan 760

Death Benefits in LIC New Money Back Plan 720

In the unfortunate event of the policyholder’s demise, LIC New Money Back Plan 720 ensures that the nominee receives substantial financial support. Let’s understand this with an example.

Scenario:

• Policyholder’s Age at Death: 37 years
• Sum Assured: ₹10 lakhs
• Policy Term: 20 years
• Death Occurrence: After 7 years of policy commencement

Death Benefits Calculation

1. Sum Assured on Death: LIC calculates the higher value between the following two amounts:

• 125% of Basic Sum Assured: ₹10 lakhs × 125% = ₹12,50,000
• 7 Times the Annual Premium: ₹77,409 × 7 = ₹5,41,863

Higher Value: ₹12,50,000

2. Accrued Bonuses:

• Bonus Rate: ₹36 per ₹1,000 of Sum Assured
• Annual Bonus for 7 years: ₹36,000 × 7 = ₹2,52,000

Total Death Benefit:

• Sum Assured on Death: ₹12,50,000
• Bonus for 7 years: ₹2,52,000
• Grand Total: ₹15,02,000

Additional Details

• After the policyholder’s demise, the nominee does not need to pay any remaining premiums.
• The policy terminates, and only the death benefits are payable.
• No maturity benefits are provided in such cases.

This example highlights how LIC New Money Back Plan 720 offers comprehensive death benefits, ensuring financial stability for the nominee.

Also see: LIC Jeevan Utsav Plan 771

Survival and Maturity Benefits

Survival Benefits:

• Periodic payouts begin after the 5th policy year.
• 20% of the Basic Sum Assured is disbursed at the 5th, 10th, and 15th policy years.
• For example, with a Sum Assured of ₹10 lakhs, you receive ₹2 lakhs each at these intervals.

Maturity Benefits: At the end of the 20th year, the policyholder receives:

• 40% of the Basic Sum Assured: For a ₹10 lakh policy, this amounts to ₹4 lakhs.
• Accrued bonuses and a final additional bonus.

Using past bonus rates, the total maturity benefit could reach approximately ₹11.6 lakhs.

Additional Benefits

Policyholders can enhance the coverage of their LIC New Money Back Plan 720 by opting for additional benefits or riders. These riders offer protection against specific contingencies by paying an extra premium.

Available Riders:

• Accidental Death and Disability Benefit Rider: Provides financial security in case of accidental death or disability.
• Accidental Benefit Rider: Offers additional coverage specifically for accidental death.
• Term Assurance Rider: Ensures higher financial protection for the family in case of the policyholder’s untimely demise.

How to Add Riders:

• Riders must be opted for at the time of purchasing the policy.
• As of now, the Critical Illness Rider is not available under this plan.

Loan Facility

The plan includes the option to avail of a loan against the policy, offering financial flexibility when needed:

1. Eligibility for Loan:

• The loan facility becomes available after the policy has been active for one year.

2. Terms and Conditions:

• The loan amount depends on the surrender value of the policy at the time of application.
• Interest on the loan is payable as per LIC’s prevailing rates.

This feature is particularly helpful for policyholders who might require funds for urgent or planned expenses while keeping the policy active.

Surrender Value

Policyholders have the flexibility to discontinue their policy and receive the surrender value:

• Eligibility for Surrender: The policy can be surrendered after it has been active for one year.
• Calculation: The surrender value includes a percentage of premiums paid and a proportion of accrued bonuses, depending on the policy’s term and duration.

While surrendering might result in financial losses compared to the maturity benefits, it provides a safety net for policyholders in need of immediate cash.

Payment Modes

The plan offers flexibility in paying premiums, accommodating various financial situations:

Modes Available:

• Yearly
• Half-Yearly
• Quarterly
• Monthly

Special Features:

• Monthly payments can be made through the Salary Saving Scheme (SSS) or NACH.
• If the NACH option is chosen, an advance premium of three months is required.

This flexibility ensures that policyholders can choose a payment schedule that aligns with their income flow.

Grace Period

To ensure continuity of coverage, the plan provides a grace period for premium payments:

Duration:

• 15 days for monthly premium payments.
• 30 days for yearly, half-yearly, and quarterly payments.

Significance: During this grace period, policyholders can pay their overdue premium without incurring any penalties.

This feature helps policyholders avoid lapses in policy benefits due to short-term financial constraints.

Revival Option

For policies that have lapsed due to non-payment of premiums, LIC provides a revival facility:

Revival Period:

• A lapsed policy can be revived within 5 years from the date of the first unpaid premium.

Conditions:

• Policyholders must pay all overdue premiums along with applicable late fees.
• The policyholder’s health conditions may be reassessed for approval.

This ensures that policyholders can reinstate their coverage and benefits without losing the investment made so far.

Free Look Period

LIC offers a 30-day free look period to ensure policyholder satisfaction:

• What It Entails: If a policyholder finds the terms and conditions unsatisfactory, they can cancel the policy within this period.
• Refund Details: Upon cancellation, the premiums paid are refunded after deducting minimal administrative charges and any applicable taxes.

This feature provides customers with the opportunity to review the policy thoroughly and opt out if it doesn’t meet their expectations.

Why Choose LIC New Money Back Plan 720?

• Liquidity and Savings: Periodic payouts ensure liquidity, while bonuses and maturity benefits provide long-term savings.
• Comprehensive Coverage: Death benefits and optional riders ensure robust financial security.
• Flexibility: Multiple premium payment modes and revival options cater to diverse financial situations.
• Trustworthy Institution: Backed by LIC’s strong reputation and track record.

Conclusion

LIC New Money Back Plan 720 is an excellent option for individuals seeking a mix of savings, regular returns, and financial protection. Its comprehensive features, along with optional benefits, make it a versatile product for various financial needs. Whether you’re looking to build wealth or secure your family’s future, this plan offers a reliable pathway to achieving your goals.

FAQs for LIC New Money Back Plan 720

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute professional financial or insurance advice. Policy terms, conditions, and benefits may vary and are subject to change by LIC. Readers are advised to review the official policy document and consult with a licensed insurance advisor for personalized guidance before making any decisions.