When planning for the future, one of the biggest dilemmas people face is locking up their money for decades. While long-term savings are crucial for wealth creation, life is unpredictable. You might need bulk cash for a child’s higher education, a family wedding, a business expansion, or a medical emergency long before you retire.
LIC's New Money Back (Plan 720) Calculator - (20 Years)
Plan No. 720 (UIN: 512N280V03)
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To bridge this exact gap between long-term life insurance protection and short-term liquidity needs, the Life Insurance Corporation of India (LIC) offers the highly popular LIC New Money Back Plan-20 Years (Plan No. 720).
Because this policy involves periodic payouts, accrued bonuses, and a limited premium payment structure, calculating your exact returns manually can be overwhelming. That is where the LIC New Money Back Plan 720 (20 Years) Calculator comes in. In this detailed guide, we will break down how this plan works, decode its survival benefits, and explain how to use the calculator to plan your finances flawlessly.
What is the LIC New Money Back Plan 720?
The LIC New Money Back Plan-20 Years (UIN: 512N280V03) is a Participating, Non-Linked, Individual Life Savings Plan.
- “Non-Linked” means your money is not invested in the volatile stock market. Your returns are safe and largely guaranteed.
- “Participating” means that the policy shares in the profits of LIC. As LIC makes profits, a share is added to your policy every year in the form of Simple Reversionary Bonuses.
What makes Plan 720 unique is its structure: You are insured for 20 years, but you only have to pay premiums for 15 years. Furthermore, instead of waiting a full two decades to see your money, LIC pays you a portion of your Sum Assured every 5 years as a “Survival Benefit.”
Overview Table: LIC New Money Back Plan 720 (20 Years)
To give you a quick understanding before we dive into the calculations, here is a snapshot of the core eligibility criteria as per LIC’s official brochure:
| Policy Parameter | Detailed Specifications |
|---|---|
| Plan Name & Number | LIC’s New Money Back Plan-20 Years (Plan 720) |
| UIN | 512N280V03 |
| Minimum Age at Entry | 13 Years (Completed) |
| Maximum Age at Entry | 50 Years (Nearer Birthday) |
| Maximum Maturity Age | 70 Years (Nearer Birthday) |
| Policy Term | Fixed at 20 Years |
| Premium Paying Term (PPT) | Fixed at 15 Years |
| Minimum Basic Sum Assured | ₹2,00,000 (In multiples of ₹25,000) |
| Maximum Basic Sum Assured | No Upper Limit (Subject to underwriting) |
| Premium Modes | Yearly, Half-yearly, Quarterly, Monthly (NACH) |
Why Use the LIC New Money Back Plan 720 Calculator?
Insurance policies with multiple payout stages can get mathematically complex. If you take a Basic Sum Assured of ₹10 Lakhs, how much GST will apply to your first-year premium? How much money will you get back in the 5th year? What will be the final maturity amount with bonuses?
The LIC New Money Back Plan 720 Calculator is a digital financial tool designed to answer all these questions instantly. It eliminates human error and provides a crystal-clear projection of your cash flows.
How to Use the Calculator (Step-by-Step)
Using the digital lic calculator (as seen in the provided interface) is incredibly straightforward:
- Age (Years): Enter your current age. Ensure it is between 13 and 50 years.
- Basic Sum Assured (₹): Enter the life cover amount you want. The minimum is ₹2,00,000. If you want higher coverage, increase it in multiples of ₹25,000.
- Policy Term (Years): This field is fixed at 20 Years for this specific plan.
- Premium Paying Term (Years): This field is fixed at 15 Years. You will enjoy a premium holiday for the last 5 years of the policy.
- Optional Riders: You can toggle on the Accidental Death & Disability Benefit Rider (UIN: 512B209V02). This adds an extra layer of financial security in case of accidental mishaps.
- Calculate: Click the button to instantly view your yearly premium, survival benefit timeline, and projected maturity value.
Decoding the Benefits: How Do You Get Your Money Back?
The biggest selling point of LIC Plan 720 is its triple-layered benefit structure: Survival Benefits, Maturity Benefits, and Death Benefits. Let’s break them down exactly as they are written in the LIC sales brochure.
1. Survival Benefits (The “Money Back” Payouts)
If the Life Assured survives the specified durations and has paid all due premiums, LIC pays back a fixed percentage of the Basic Sum Assured.
Under the 20-Year plan, you receive 20% of the Basic Sum Assured at the end of the 5th, 10th, and 15th policy years.
- End of Year 5: 20% of Sum Assured
- End of Year 10: 20% of Sum Assured
- End of Year 15: 20% of Sum Assured
(By the 15th year, you have already received 60% of your Basic Sum Assured back in cash, which you can use for children’s education, paying off loans, or reinvesting).
2. Maturity Benefit (The Final Payout)
If you survive to the end of the 20-year policy term, LIC pays you the Maturity Benefit. Since you have already received 60% of your money, the final payout consists of:
- The remaining 40% of the Basic Sum Assured
- + Vested Simple Reversionary Bonuses (accumulated over 20 years)
- + Final Additional Bonus (if any)
Example Calculation
Imagine a 30-year-old buys this plan with a Basic Sum Assured of ₹10,00,000.
- Year 5: He receives ₹2,00,000.
- Year 10: He receives ₹2,00,000.
- Year 15: He receives ₹2,00,000. (His premium payments also stop here).
- Year 20 (Maturity): He receives the remaining ₹4,00,000 PLUS the total bonuses accrued over 20 years. The bonuses often make the final payout significantly larger than the remaining 40% Sum Assured.
3. Death Benefit
The primary purpose of life insurance is family protection. If the life assured passes away unfortunately during the 20-year term, the nominee receives the “Sum Assured on Death”.
This is highly attractive because the Sum Assured on Death is defined as the higher of:
- 125% of the Basic Sum Assured, OR
- 7 times the annualized premium.
Crucial Note: This death benefit will never be less than 105% of the total premiums paid up to the date of death. Furthermore, LIC will also pay all the accumulated bonuses up to the year of death. Any survival benefits that were already paid to the policyholder while they were alive will NOT be deducted from the Death Claim.
Hidden Gems of LIC Plan 720 You Must Know
While the calculator shows you the numbers, the LIC brochure outlines several powerful features that make this policy highly flexible.
1. Settlement Options (Taking Payouts in Installments)
Did you know you don’t have to take your maturity or death benefits in a single lump sum? LIC allows policyholders to choose a Settlement Option. You can choose to receive your maturity or death claim in regular installments over 5, 10, or 15 years.
This acts as a fantastic regular income stream. The minimum installment amounts set by LIC are:
- Monthly: ₹5,000
- Quarterly: ₹15,000
- Half-Yearly: ₹25,000
- Yearly: ₹50,000
2. Premium Rebates (Discounts)
LIC rewards you for paying premiums annually and for choosing a higher life cover.
- Mode Rebate: If you choose the Yearly premium mode, you get a 2% discount on the tabular premium. Half-yearly mode gets a 1% discount.
- High Sum Assured Rebate: If you choose a Basic Sum Assured of ₹5,00,000 and above, LIC gives you a rebate of ₹3.00 per ₹1,000 of the Sum Assured.
3. Quick Loan Facility and Surrender Value
Emergencies don’t wait. Unlike older policies that locked your money for 3 years, Plan 720 provides massive liquidity.
- Loan Facility: You can take a loan against your policy after completing just 1 full policy year (provided one full year’s premium has been paid). Under an in-force policy, you can get a loan up to 75% of the surrender value (after 2 years of premiums).
- Surrender Value: The policy acquires a Special Surrender Value after 1 year, and a Guaranteed Surrender Value after 2 full years of premium payments.
4. Optional Riders for Enhanced Protection
To make your policy a robust shield against all uncertainties, you can use the calculator to add riders. The available riders under this plan are:
- LIC’s Accidental Death and Disability Benefit Rider: Pays an extra sum assured if death occurs via an accident, and waives future premiums in case of accidental disability.
- LIC’s Accident Benefit Rider: A simpler rider focusing purely on accidental death.
- LIC’s New Term Assurance Rider: Provides extra life cover on natural or accidental death.
Tax Benefits Under LIC Money Back Plan 720
One of the primary reasons Indians invest in LIC is for tax optimization. Plan 720 shines in this department.
- Tax Deduction on Premiums: The premiums you pay every year (up to ₹1.5 Lakhs) are fully deductible from your taxable income under Section 80C of the Income Tax Act.
- Tax-Free Returns: Because the death cover is 1.25 times (125%) of the Sum Assured, it perfectly satisfies the tax laws. Therefore, the periodic Survival Benefits, the Maturity Benefit, and the Death Benefit are entirely Tax-Free under Section 10(10D) of the Income Tax Act.
Who Should Buy the LIC New Money Back Plan 720?
This plan is not for everyone. It is specifically tailored for a distinct demographic:
- Parents Planning for Child’s Education: If you have a young child, the money-back payouts every 5 years align perfectly with major educational milestones (school admissions, college fees, higher studies).
- Conservative Investors: If you fear the volatility of mutual funds and want a legally binding guarantee on your returns along with sovereign backing, this is for you.
- People Needing Routine Liquidity: If you are someone who hates locking up money for 20 years straight and wants a “bonus” every 5 years for a family vacation or a car upgrade, this plan fits your psychology perfectly.
Conclusion
The LIC New Money Back Plan 720 (20 Years) perfectly balances the three pillars of financial planning: Life Protection, Wealth Accumulation, and Guaranteed Liquidity.
By paying premiums for only 15 years, you secure a 20-year risk cover while enjoying substantial cash payouts at the 5th, 10th, and 15th years. When you combine this with the tax-free maturity amount and accumulated bonuses at year 20, it stands as one of the most reliable savings instruments in the Indian market.
Don’t rely on guesswork to plan your family’s future. Use the LIC New Money Back Plan 720 (20 Years) Calculator today to customize your Sum Assured, see your exact money-back dates, and take the first step toward a financially stress-free life.
Frequently Asked Questions (FAQs)
Q1: What happens if I stop paying premiums after 3 years?
If you have paid premiums for at least 1 full year, your policy will not become completely void; it will convert into a “Paid-up Policy.” However, the survival benefits, maturity benefits, and death cover will be reduced proportionately based on the number of premiums you actually paid.
Q2: Are the survival benefits deducted from the death claim?
Absolutely not. This is a major advantage of LIC Plan 720. Even if you have received the survival payouts at years 5, 10, and 15, if a death occurs in the 16th year, LIC will pay the full 125% of the Basic Sum Assured plus bonuses to the nominee without deducting the previously paid amounts.
Q3: Can I choose to defer my survival benefits?
No, under this specific plan, survival benefits are paid out automatically at the end of the specified policy durations (5th, 10th, and 15th year). If you want to hold them, you would need to manually reinvest the payout into a bank FD or another instrument.
Q4: Does the policy cover death due to suicide?
If the Life Assured commits suicide within 12 months from the date of risk commencement, the nominee will receive 80% of the total premiums paid (provided the policy is in-force). If it happens within 12 months of revival, the higher of 80% of premiums paid or the acquired surrender value is paid.
Q5: Is it mandatory to buy the Accidental Rider?
No, riders are completely optional. However, as seen in the calculator, adding the Accidental Death & Disability Benefit Rider costs a very marginal extra premium but doubles your risk cover in case of an accidental tragedy, making it highly recommended by financial advisors.
