What is LIC money back policy

LIC Money Back Policy — Quick explainer

It's a traditional (non-linked) LIC plan that gives you periodic payouts during the policy term, instead of one lump sum at maturity — plus life cover throughout.

How it works (using the popular New Money Back Plan – 20 years as an example):

• Premiums paid for 15 years, policy runs for 20 years

• If you're alive at the end of the 5th, 10th, and 15th years, you get 20% of the Basic Sum Assured each time as a survival benefit, and the policy continues

• The remaining 40% of the Sum Assured is paid at maturity, along with accrued bonuses

• If the policyholder dies during the term, the full sum assured plus bonuses goes to the family — regardless of how many survival payouts were already made

• It also comes with a loan facility against the policy for liquidity needs

• Other versions exist too — e.g. a 25-year variant that pays a lump sum at maturity instead of periodic installments, and higher-cover options like LIC Bima Shree and LIC Bima Ratna, designed for larger sum assured with structured payouts

Who it's meant for: People who want predictable cash at fixed intervals — e.g., for a child's education milestones or recurring expenses — while keeping some life cover in place.

The catch (worth knowing before buying):

• Money-back plans typically deliver a lower effective return (IRR) than a straight endowment or investment product, because payouts happen early and periodically instead of compounding fully till maturity

• If your total annual premiums across all traditional LIC policies exceed ₹5 lakh, maturity proceeds become taxable at your income slab — which can cut your real, in-hand return by 1–2%

• Life cover here is usually much lower than a term plan for the same premium, since a chunk goes toward the periodic payouts

Money-back plans make more sense only if you specifically value the guaranteed, scheduled liquidity over maximizing returns.

Explain LIC Jeevan Labh

It's a participating, non-linked endowment plan that combines long-term savings with life insurance, designed for people who want guaranteed life cover while building a corpus through bonuses.

Liquidity:
A loan facility is available against the policy once it acquires surrender value — useful for emergencies without terminating the plan