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LIC's New Money Back Plan – 25 Years (Plan 721) is a participating, non-linked, individual savings plan from Life Insurance Corporation of India that combines life cover with regular payouts. The policy runs for 25 years and you pay premiums for the first 20 years only. If you are alive at the end of the 5th, 10th, 15th and 20th policy years, 15% of the Basic Sum Assured is paid out as a survival benefit. If you survive the full 25 years, you get the Sum Assured on Maturity, which is 40% of the Basic Sum Assured, along with vested Simple Reversionary Bonuses and any Final Additional Bonus. If you die during the policy term, your nominee gets the Sum Assured on Death, the higher of 125% of the Basic Sum Assured or 7 times the annualised premium, plus bonuses, and never less than 105% of the premiums paid. LIC's illustration shows that survival payouts already received are not deducted from this amount. Because the plan is participating, bonuses are declared every year based on LIC's experience and are not guaranteed until declared. The minimum Basic Sum Assured is ₹2 lakh with no upper limit, entry age is 13 to 45 years, and the plan can be bought only offline.
Money back plan that pays 15% of the Basic Sum Assured every 5 years, 40% plus bonuses at maturity, and keeps the full death cover throughout.
New Money Back 25 Years suits someone who wants regular cash payouts and is comfortable with a long, low-return savings product. In LIC's own illustration (age 30, ₹2 lakh Basic Sum Assured, yearly premium ₹12,573), you pay ₹2.51 lakh over 20 years and receive ₹30,000 at the end of years 5, 10, 15 and 20, plus ₹80,000 guaranteed at maturity. Those guaranteed amounts add up to ₹2 lakh, which is less than the premiums paid, so the plan gets ahead only if LIC declares enough bonuses. At LIC's 4% illustration rate the maturity amount is ₹1.15 lakh, and at the 8% rate it is ₹2.5 lakh including a final additional bonus. Our estimate of the yearly return is about -0.7% in the 4% case and about 3.5% in the 8% case, before tax, which is below what most debt products earn. The life cover is also small, ₹2.5 lakh against ₹12,573 paid every year, so this is not a substitute for a term plan. Early exit is costly, since nothing is paid back in the first year and the guaranteed surrender value starts at only 30% of premiums in the second year, minus any payouts already received. Choose it only if you value the forced saving and the 5-year payouts, and can pay premiums for the full 20 years.
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 15% of the Basic Sum Assured at the end of the 5th, 10th, 15th and 20th policy years, so 60% of it comes back to you in four payouts during the term.
Paid only if all due premiums have been paid.
The nominee gets the Sum Assured on Death, which is 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 premiums paid.
In LIC's illustration the death benefit stays at ₹2.5 lakh even after survival payouts.
On surviving the 25-year term, you get 40% of the Basic Sum Assured along with vested Simple Reversionary Bonuses and any Final Additional Bonus.
This comes on top of the four survival benefits paid earlier.
You pay premiums for 20 years and the policy runs for 25 years, so the last five years are premium-free.
Simple Reversionary Bonuses are declared every year based on LIC's experience, and a Final Additional Bonus may be added when the policy ends in a claim. Declared bonuses become part of the guaranteed benefits.
Bonuses are not guaranteed until declared, and a policy that stops paying premiums stops sharing in future profits.
If an accident causes death, the Accident Benefit Sum Assured is paid as a lump sum. In case of accidental disability 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 it remain.
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 plan from LIC (Plan 721, UIN 512N278V03). You pay premiums for 20 years, the policy runs for 25 years, you get 15% of the Basic Sum Assured every five years and the balance plus bonuses at maturity, with life cover throughout.
15% of the Basic Sum Assured is paid at the end of the 5th, 10th, 15th and 20th policy years if you are alive and all due premiums have been paid. On a ₹2 lakh Basic Sum Assured, that is ₹30,000 each time, or ₹1.2 lakh in total. In LIC's illustration, the death benefit stays the same after these payouts.
On surviving the 25 years, you get the Sum Assured on Maturity, which is 40% of the Basic Sum Assured, plus vested Simple Reversionary Bonuses and any Final Additional Bonus. In LIC's example (age 30, ₹2 lakh), ₹80,000 is guaranteed and the rest depends on bonuses: ₹1.15 lakh in total at the 4% illustration rate and ₹2.5 lakh at 8%.
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)
Available only during the premium paying term; the rider sum assured can be up to 3 times the Basic Sum Assured.
Adds extra term cover, paid on death during the policy term.
Available at policy inception only; the benefit cannot exceed the Basic Sum Assured.
The nominee gets the Sum Assured on Death, which is 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. The total is never less than 105% of the premiums paid. For a ₹2 lakh Basic Sum Assured, the Sum Assured on Death is ₹2.5 lakh.
Entry age is 13 years (completed) to 45 years (nearer birthday), and the maximum age at maturity is 70. The minimum Basic Sum Assured is ₹2 lakh, in multiples of ₹25,000, with no upper limit. The policy term is fixed at 25 years and the premium paying term at 20 years.
LIC's illustration for a 30-year-old with a ₹2 lakh Basic Sum Assured shows a yearly premium of ₹12,573 for 20 years, or ₹2,51,460 in total, before taxes. Paying yearly gets a 2% rebate on the tabular premium, and a Basic Sum Assured of ₹5 lakh or more gets a further rebate. The exact premium depends on your age and sum assured.
No. The plan is participating, so Simple Reversionary Bonuses are declared every year based on LIC's experience, and a Final Additional Bonus may be paid when the policy ends in a claim. Once declared, a bonus becomes part of the guaranteed benefits. Only the survival benefits and the 40% maturity amount are fixed in advance.
If you stop before one full year of premiums is paid, the policy lapses and nothing is payable. After one full year, it becomes a paid-up policy with a reduced death benefit and maturity benefit. Vested bonuses stay attached, but no new bonuses or Final Additional Bonus are added, and survival benefits are not paid separately. A lapsed policy can be revived within five years.
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 year 2, 35% in year 3 and 50% in years 4 to 7, rising to 72.94% in year 20 and 90% in years 24 and 25, less any survival benefits already paid. 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 after two full years of premiums, at an interest rate that LIC resets every year.
Yes. You can take the maturity proceeds (Settlement Option, to be chosen at least 3 months before maturity) or the death benefit in instalments over 5, 10 or 15 years, in full or in part. The minimum instalment is ₹5,000 monthly, ₹15,000 quarterly, ₹25,000 half-yearly or ₹50,000 yearly; smaller amounts are paid as a lump sum.
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 accident rider, and all rider premiums together cannot exceed 30% of the base premium.
You can pay yearly, half-yearly, quarterly or monthly (through NACH only), or through salary deduction, during the 20-year premium paying term. The grace period is 30 days for yearly, half-yearly and quarterly premiums and 15 days for monthly premiums, and the policy stays in force during it.