Long-term financial planning often comes with a major dilemma: you want to build a massive corpus for the future, but you also need liquidity for life’s ongoing milestones. Locking your money away for 25 years without any access to it can be daunting.
LIC's New Money Back (Plan 721) Calculator - (25 Years)
Plan No. 721 (UIN: 512N278V03)
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To solve this exact problem, the Life Insurance Corporation of India (LIC) offers the LIC New Money Back Plan-25 Years (Plan No. 721). It is a brilliant financial instrument that provides life insurance coverage for a quarter of a century, while periodically handing you chunks of your money back every 5 years.
Because this policy involves periodic payouts, a limited premium-paying term, and accumulated bonuses, calculating your exact returns manually can be a headache. That is where the LIC New Money Back Plan 721 (25 Years) Calculator becomes your ultimate financial companion. In this comprehensive guide, we will decode how Plan 721 works, analyze its survival benefits, and show you how to use the calculator to plan your family’s future effectively.
What is the LIC New Money Back Plan 721?
The LIC New Money Back Plan 721 is a Non-Linked, Participating, Limited Premium, Individual Life Insurance Savings Plan. Let’s break down what this actually means for your money:
- Non-Linked: Your money is completely safe and is not invested in the volatile stock market.
- Participating:Â You participate in the profits of LIC. As the corporation earns profits, it shares them with you by adding annual bonuses to your policy.
- Limited Premium: Even though the policy covers you for 25 years, you only have to pay premiums for 20 years. You enjoy a 5-year “premium holiday” at the end of the term.
This plan is perfectly suited for individuals who want guaranteed cash flows at regular intervals (like funding a child’s higher education, marriage, or starting a business) while maintaining a robust life insurance cover for their family.
Quick Overview: LIC Plan 721 Parameters
Before you jump into the lic calculator, it is crucial to understand the official eligibility criteria and structure of the policy. Here is a quick snapshot:
| Policy Feature | Detailed Specifications |
|---|---|
| Plan Name & Number | LIC’s New Money Back Plan-25 Years (Plan 721) |
| Policy Term | Fixed at 25 Years |
| Premium Paying Term (PPT) | Fixed at 20 Years |
| Minimum Entry Age | 13 Years (Completed) |
| Maximum Entry Age | 45 Years (Nearer Birthday) |
| Maximum Maturity Age | 70 Years (Nearer Birthday) |
| Minimum Basic Sum Assured | ₹2,00,000 (In multiples of ₹25,000) |
| Maximum Basic Sum Assured | No Upper Limit (Subject to underwriting) |
| Premium Payment Modes | Yearly, Half-yearly, Quarterly, Monthly (NACH) |
Why Do You Need the LIC New Money Back Plan 721 Calculator?
Insurance math can get complicated. If you choose a Basic Sum Assured of ₹10 Lakhs, how much exactly will you pay per month? What will be the exact amount you receive in the 15th year? What about the GST applicable in the first year versus the second year?
The LIC New Money Back Plan 721 Calculator is an advanced online tool that removes the guesswork from your financial planning. By using this tool, you get:
- Exact Premium Quotes:Â Including the 4.5% GST in the first year and 2.25% in subsequent years.
- Clear Payout Timeline:Â It tells you the exact years you will receive your money-back checks.
- Bonus Projections:Â It estimates your final maturity amount by calculating the Simple Reversionary Bonus and Final Additional Bonus based on LIC’s historical data.
- Customization:Â You can easily tweak your Sum Assured to find a premium amount that fits your monthly budget perfectly.
How Do You Get Your Money Back?
The defining feature of Plan 721 is its structured three-way payout system: Survival Benefits, Maturity Benefit, and Death Benefit.
1. The Survival Benefits (Periodic Money-Back)
Under the 25-year plan, LIC pays you 15% of the Basic Sum Assured at the end of the 5th, 10th, 15th, and 20th policy years—provided you are alive and all premiums are paid.
- End of Year 5:Â 15% of Sum Assured
- End of Year 10:Â 15% of Sum Assured
- End of Year 15:Â 15% of Sum Assured
- End of Year 20:Â 15% of Sum Assured
(By the end of the 20th year, you have already received 60% of your Sum Assured back in cash. Furthermore, your obligation to pay premiums also ends at the 20th year).
2. The Maturity Benefit (The Grand Finale)
If you survive the entire 25-year term, the policy matures. Since you have already received 60% of your money, the final maturity payout consists of:
- The remaining 40% of the Basic Sum Assured
- PLUSÂ Vested Simple Reversionary Bonuses (accumulated over 25 years)
- PLUSÂ Final Additional Bonus (if declared by LIC)
Because the bonuses have 25 years to compound, the final maturity payout is usually massive, often exceeding the entire initial Sum Assured!
3. The Death Benefit (Ultimate Family Protection)
If the policyholder passes away during the 25-year term, the nominee receives the “Sum Assured on Death”.
To ensure maximum protection, LIC defines the Sum Assured on Death as the higher of:
- 125% of the Basic Sum Assured, OR
- 7 times the annualized premium.
The Best Part: Even if the policyholder has already received multiple survival benefits (money-back payouts) before their death, LIC will not deduct those payouts from the final death claim. The nominee receives the full 125% of the Sum Assured along with all accumulated bonuses up to the year of death.
Real-Life Example: Seeing the Calculator in Action
To truly understand how powerful this plan is, let’s look at a practical example using the logic of the LIC New Money Back Plan 721 Calculator.
Meet Rohan (Age 30):
- Rohan buys Plan 721 with a Basic Sum Assured of ₹10,00,000.
- His Policy Term is 25 Years, and he will pay premiums for 20 Years.
- His approximate annual premium will be around ₹58,000 (excluding GST).
Here is Rohan’s Exact Payout Timeline:
- Age 35 (End of Year 5): Rohan receives ₹1,50,000 (15% of ₹10 Lakhs).
- Age 40 (End of Year 10): Rohan receives another ₹1,50,000.
- Age 45 (End of Year 15): Rohan receives ₹1,50,000.
- Age 50 (End of Year 20): Rohan receives ₹1,50,000. (His premium payments stop here).
Age 55 (Maturity at Year 25):
Rohan receives the remaining ₹4,00,000 (40% of SA) PLUS the accumulated Simple Reversionary Bonuses and Final Additional Bonus.
Assuming standard LIC bonus rates over a 25-year period, Rohan’s final maturity check could easily range between ₹12,00,000 to ₹16,00,000.
In total, combined with the survival benefits, Rohan receives an incredibly handsome return on his investment while enjoying ₹12.5 Lakhs of continuous risk cover for 25 years!
Key Features & Hidden Benefits of Plan 721
While the calculator shows you the math, the policy brochure hides several amazing features that add tremendous value to your investment.
1. Settlement Options (Create Your Own Pension)
You don’t have to take your maturity or death benefit as a single lump sum. LIC offers a Settlement Option, allowing you (or your nominee) to receive the maturity/death claim in regular installments over 5, 10, or 15 years. This is a fantastic way to create a steady, tax-free regular income stream for your retirement.
2. Loan Facility for Emergencies
Life is unpredictable. If you need urgent cash but don’t want to surrender your policy, Plan 721 offers a loan facility. Once you have paid premiums for at least two full years, you can take a loan against the surrender value of your policy at very nominal interest rates.
3. Optional Rider Benefits
You can use the calculator to add optional riders to your base plan for a few extra rupees, massively upgrading your protection:
- LIC’s Accidental Death and Disability Benefit Rider: Doubles your sum assured in case of accidental death and waives future premiums in case of accidental disability.
- LIC’s New Term Assurance Rider: Provides additional life cover.
- LIC’s Critical Illness Benefit Rider: Pays a lump sum upon the diagnosis of specified severe illnesses.
4. Premium Rebates (Discounts)
- Mode Rebate: Pay your premium Yearly and get a 2% discount. Pay Half-Yearly and get a 1% discount.
- High Sum Assured Rebate: If you choose a Sum Assured of ₹5,00,000 or above, LIC gives you an automatic discount of ₹3.00 per ₹1,000 of the Sum Assured.
Comparison: LIC Plan 721 (25 Years) vs. LIC Plan 720 (20 Years)
A common dilemma buyers face is choosing between the 20-year and 25-year Money Back plans. Here is a quick comparison to help you decide:
| Feature | Plan 720 (20 Years) | Plan 721 (25 Years) |
|---|---|---|
| Premium Paying Term | 15 Years | 20 Years |
| Survival Benefits | 20% at 5th, 10th, 15th year | 15% at 5th, 10th, 15th, 20th year |
| Maturity Benefit | 40% + Bonuses | 40% + Bonuses |
| Bonus Accumulation | Good (20 Years of compounding) | Excellent (25 Years of compounding) |
| Ideal For | Medium-term goals | Long-term goals & higher final returns |
Expert Advice: Because bonuses compound over time, the 25-year plan (721) generally yields a much higher final maturity amount compared to the 20-year plan.
Tax Benefits Under LIC Money Back Plan 721
For Indian investors, saving on income tax is just as important as the investment return itself. Plan 721 is a highly tax-efficient instrument.
- Section 80C: The premiums you pay every year are fully eligible for a tax deduction up to ₹1.5 Lakhs under Section 80C of the Income Tax Act.
- Section 10(10D): Because the death cover is 125% of the Sum Assured, the policy perfectly complies with tax laws. As a result, all your periodic Survival Benefits, the Final Maturity Amount, and the Death Benefit are 100% Tax-Free.
Conclusion:
The LIC New Money Back Plan 721 is a masterpiece of financial engineering. It acknowledges that human beings need motivation to save. By rewarding you with 15% of your Sum Assured every 5 years, it keeps you motivated, provides liquidity for your family’s evolving needs, and builds a massive, tax-free corpus for your later years.
Don’t leave your family’s future to chance. Use the LIC New Money Back Plan 721 (25 Years) Calculator today. Enter your age, play around with different Sum Assured amounts, and lock in a premium that fits your budget. Secure your life, secure your milestones, and enjoy the peace of mind that comes with India’s most trusted insurance provider.
FAQs
Q1: Can I buy LIC New Money Back Plan 721 for my minor child?
The minimum entry age for this plan is 13 years (completed). If your child is 13 or older, you can definitely buy this policy in their name. For younger children, you should look at the LIC New Children’s Money Back Plan 732.
Q2: What happens if I fail to pay the premium after 4 years?
If you have paid premiums for at least two full years and then stop, your policy will not lapse completely. It will convert into a “Paid-Up Policy.” Your Sum Assured will decrease proportionately based on the number of premiums you paid, and future survival benefits will be paid based on this reduced amount.
Q3: Can I surrender the policy and get my money back?
Yes, the policy acquires a Guaranteed Surrender Value after you have paid premiums for at least 2 full years. However, surrendering a life insurance policy usually results in a financial loss. It is always better to use the Policy Loan Facility instead of surrendering.
Q4: Do the survival benefits earn any interest if I don’t withdraw them?
No. Under Plan 721, the survival benefits are paid out to your bank account at the end of the 5th, 10th, 15th, and 20th years. If you want them to earn interest, you must manually invest that payout into a Fixed Deposit, Mutual Fund, or other investment vehicles.
Q5: Is a medical test required to buy this policy?
Whether a medical test is required depends on your age, your chosen Basic Sum Assured, and your family’s medical history. For younger individuals and moderate Sum Assured amounts, LIC often issues the policy on a “Non-Medical” basis (based solely on your declaration of good health).
