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LIC's New Money Back Plan – 20 Years (Plan 720) is a participating, non-linked, individual savings life insurance plan from Life Insurance Corporation of India. The policy term is fixed at 20 years, and you pay premiums for the first 15 years only. Along with life cover for the whole term, the plan pays you 20% of the Basic Sum Assured at the end of the 5th, 10th and 15th policy years, as long as all due premiums have been paid. If you survive to the end of the term, you receive 40% of the Basic Sum Assured plus all vested Simple Reversionary Bonuses and any Final Additional Bonus. If you die during the term, your nominee gets the higher of 125% of the Basic Sum Assured or 7 times the annualised premium, plus the vested bonuses and any Final Additional Bonus, and never less than 105% of the premiums paid. The plan shares in LIC's profits, so bonuses are declared every year based on LIC's experience, and once declared the Simple Reversionary Bonuses become part of the guaranteed benefits. Entry age is 13 to 50 years, the policy must mature by age 70, and the minimum Basic Sum Assured is ₹2 lakh in multiples of ₹25,000, with no upper limit. You can pay yearly, half-yearly, quarterly or monthly, take the maturity or death benefit in instalments, and add up to three optional riders. The plan can be bought offline only, through LIC agents, corporate agents, brokers and insurance marketing firms.
20-year plan that pays 20% of the Basic Sum Assured at the end of years 5, 10 and 15, plus 40% and bonuses at maturity, with life cover throughout.
LIC's New Money Back Plan – 20 Years suits someone who wants part of the money back at regular intervals instead of waiting for one lump sum, and who is comfortable with modest, bonus-linked returns. In LIC's own illustration (age 30, ₹2 lakh Basic Sum Assured), the yearly premium is ₹16,082 for 15 years, which comes to ₹2.41 lakh. The plan pays ₹40,000 at the end of years 5, 10 and 15, and at maturity in year 20 it pays ₹1.08 lakh at the lower assumed bonus rate or ₹1.97 lakh at the higher rate. That means you receive ₹2.28 lakh in total at the lower rate, which is less than the premiums paid, and ₹3.17 lakh at the higher rate. Our estimate of the return from those figures is about -0.7% to 3.1% a year before tax if you survive to maturity, and the higher figure depends on bonuses that are not guaranteed. So treat this as protection with forced saving and regular payouts, not as an investment. The cover is also small for the premium: ₹2.5 lakh of death cover against ₹16,082 paid every year, so it is not a substitute for a term plan. Early exit is costly, since nothing is paid back if you stop in the first year, and the guaranteed surrender value starts at only 30% of premiums in the second year, less any payouts already received. Choose it only if you can pay premiums for 15 years and want the money back in stages.
LIC
Key Insights
Founded
1956
LIC was established 70 years ago and has built strong credibility over time, backed by its long-standing presence in the market.
Claims Experience
98.5% CSR, calculated as a 3-year average
LIC settles 98.5% of all claims it receives, demonstrating strong credibility.
Contact Details
022-68276827
Headquarters: Jeevan Bima Marg, Nariman Point, P.O. Box No. 19953, Mumbai, Maharashtra 400021, India
You get 20% of the Basic Sum Assured at the end of the 5th, 10th and 15th policy years, as long as all due premiums have been paid.
Together these are 60% of the Basic Sum Assured. They are paid separately from the maturity benefit.
If you survive the 20-year term and the policy is in force, you get 40% of the Basic Sum Assured plus all vested Simple Reversionary Bonuses and any Final Additional Bonus.
The three payouts plus this 40% add up to 100% of the Basic Sum Assured before bonuses. Bonuses depend on LIC's experience.
If the life assured dies during the policy term with the policy in force, the nominee gets the higher of 125% of the Basic Sum Assured or 7 times the annualised premium, plus vested bonuses and any Final Additional Bonus, and never less than 105% of the total premiums paid.
Annualised premium excludes taxes, rider premiums, extra premiums and loadings for modal premiums.
The plan shares in LIC's profits. Simple Reversionary Bonuses are declared at the end of each financial year while the policy is in force, and a Final Additional Bonus may be added when the policy ends in death or maturity.
Future bonuses are not guaranteed. LIC's illustration for ₹2 lakh shows ₹1,400 a year at a 4% assumed rate and ₹5,600 a year at 8%.
You pay premiums for 15 years and the policy runs for 20, so the last 5 years of cover need no premiums.
The policy term and premium paying term are fixed. There is no other option.
If an accident causes death, the Accident Benefit Sum Assured is paid as a lump sum. For a disability caused by an accident (within 180 days), it is paid in equal monthly instalments over 10 years, and future premiums for that amount are waived.
Choose this or the Accident Benefit Rider, not both. It can be added within the premium paying term if at least 5 years of premium paying term remain, and cover runs for the policy term.
Pays the Accident Benefit Sum Assured as a lump sum if death is caused by an accident.
Conditions or treatments that the policy clearly says it will not cover.
Insurer
LIC plans and claim process
It is a participating, non-linked, individual savings life insurance plan from LIC (Plan 720). The policy term is fixed at 20 years and you pay premiums for 15 years. You get life cover throughout, money back payouts at the end of years 5, 10 and 15, and a maturity benefit with bonuses if you survive the term.
If all due premiums have been paid, LIC pays 20% of the Basic Sum Assured at the end of the 5th, 10th and 15th policy years. At the end of the 20th year it pays 40% of the Basic Sum Assured plus vested bonuses and any Final Additional Bonus. In LIC's illustration for ₹2 lakh, that is ₹40,000 in each of years 5, 10 and 15.
If you survive the 20-year term and the policy is in force, you get 40% of the Basic Sum Assured plus all vested Simple Reversionary Bonuses and any Final Additional Bonus, on top of the payouts you received earlier. In LIC's illustration for ₹2 lakh (age 30), the maturity amount is ₹1,08,000 at a 4% assumed rate and ₹1,97,000 at 8%, and the bonus part is not guaranteed.
Disclaimer: Premium amounts are indicative and may vary based on age, health, and plan selected. Claim settlement ratios are from IRDAI Annual Reports. Finzony is not an insurance broker or agent. Verify all details on the official LIC website before purchasing.
Official Website
licindia.in
Visit the official LIC website for plan brochures, premium quotes and policy services.
The aforementioned ratios have been averaged over three years (FY24-FY26)
Same eligibility as the other accident rider: choose one of the two. Cover is available only during the premium paying term, and the rider sum assured can be up to 3 times the Basic Sum Assured.
Adds extra term cover: the Term Rider Sum Assured on Death is paid if the life assured dies during the policy term.
Available at policy inception only. The rider benefit cannot exceed the Basic Sum Assured, and all rider premiums together cannot exceed 30% of the base premium.
The nominee receives the higher of 125% of the Basic Sum Assured or 7 times the annualised premium, plus vested Simple Reversionary Bonuses and any Final Additional Bonus, and never less than 105% of the total premiums paid up to the date of death. The policy must be in force.
LIC declares Simple Reversionary Bonuses at the end of each financial year based on its experience, and they are added while the policy is in force. Once declared, they form part of the guaranteed benefits. A Final Additional Bonus may be declared in the year the policy ends in death or maturity, and it is not paid on paid-up policies. If premiums are not paid, the policy stops sharing in future profits.
Entry age is 13 to 50 years and the maximum age at maturity is 70. The policy term is fixed at 20 years and the premium paying term at 15 years.
The minimum Basic Sum Assured is ₹2 lakh, in multiples of ₹25,000. There is no upper limit.
LIC's sample for a ₹2 lakh Basic Sum Assured, yearly premium, before taxes, shows ₹15,896 at age 20, ₹16,082 at age 30, ₹16,846 at age 40 and ₹18,679 at age 50, paid for 15 years. Paying yearly gets a 2% rebate on the tabular premium, and a higher Basic Sum Assured gets a rebate from ₹5 lakh. The exact premium depends on your age and sum assured.
If you stop before one full year of premiums is paid, all benefits end after the grace period and nothing is paid back. After one full year, the policy becomes paid-up with reduced death and maturity amounts, vested bonuses stay attached, and the payouts due in years 5, 10 and 15 are folded into the maturity amount. A paid-up policy no longer shares in future profits. A discontinued policy can be revived within 5 consecutive years of the first unpaid premium and before maturity.
You can surrender after the first policy year, but a guaranteed surrender value applies only after two full years of premiums, at 30% of premiums paid in the second year, 35% in the third and 50% from the fourth to the seventh year, rising to 90% in the last two years, less any money back payouts already received. LIC can also pay a higher special surrender value. A loan is available after the first policy year, up to 75% of the surrender value on an in-force policy once two full years of premiums are paid (50% before that), at an interest rate that LIC resets every year.
Yes. You can choose instalments over 5, 10 or 15 years instead of a lump sum, for the full amount or part of it, paid yearly, half-yearly, quarterly or monthly. The minimum instalment is ₹5,000 monthly, ₹15,000 quarterly, ₹25,000 half-yearly or ₹50,000 yearly. The maturity option must be chosen at least 3 months before the due date.
Yes. Three optional riders are available for an extra premium: the Accidental Death and Disability Benefit Rider, the Accident Benefit Rider and the New Term Assurance Rider. You can choose either the first or the second rider, not both. All rider premiums together cannot exceed 30% of the base premium.
No. The brochure says the plan can be purchased offline through licensed agents, corporate agents, brokers and insurance marketing firms.
You get 30 days of grace for yearly, half-yearly or quarterly premiums and 15 days for monthly, and the policy stays in force during that time. The free look period is 30 days from receiving the policy document, and you get your premium back less a proportionate risk premium, medical examination costs and stamp duty.