LIC New Money Back Plan 721 Calculator
Key Features:
- Policy Term: 25 Years (Fixed)
- Premium Payment Term: 20 Years (Fixed)
- Entry Age: 13-45 Years
- Money Back: 15% of Sum Assured at 5th, 10th, 15th & 20th year
- Maturity Benefit: 40% of Sum Assured + Bonuses
Life Insurance Corporation of India (LIC) is a trusted name in Indian insurance, offering various plans to suit different financial goals. One popular choice is LIC New Money Back Plan 721, a savings-cum-protection plan designed to provide periodic payouts along with life cover. To help individuals understand their returns, LIC offers a calculator for this plan. This article explains everything about LIC New Money Back Plan 721 and its calculator in a simple, easy-to-understand way.
What is LIC New Money Back Plan 721?
LIC New Money Back Plan 721 is a non-linked, participating, individual life assurance savings plan offered by LIC. It is a long-term policy with a term of 25 years and a premium payment term of 20 years. The plan combines the benefits of life insurance with periodic money-back payouts and maturity benefits.
Eligibility for this plan includes an entry age of 13 to 45 years, making it suitable for young adults looking for savings and protection. The policy provides:
- Survival Benefits: Periodic payments at specified intervals during the policy term.
- Death Benefit: Financial support for nominee in case of the policyholder’s death during the term.
- Maturity Benefit: A lump sum amount on survival till the end of the policy term.
Features and Benefits of LIC New Money Back Plan 721
Survival Benefits (Money Back Amounts)
The plan offers survival benefits amounting to 15% of the Basic Sum Assured every 5 years. These payouts happen at the end of the 5th, 10th, 15th, and 20th policy years. These amounts provide regular financial support while the policyholder is alive.
Maturity Benefit
At the completion of the 25-year policy term, the policyholder receives the Basic Sum Assured along with the vested Simple Reversionary Bonuses and a Final Additional Bonus (FAB), if declared by LIC. This lump sum payout is the reward for saving regularly through premiums.
Death Benefit
In case of the unfortunate death of the life assured during the policy term, the nominee is entitled to the death benefit, which is the higher of either:
- 125% of the Basic Sum Assured, or
- 7 times the annualized premium.
Additionally, any bonuses vested till that time are also payable. This benefit ensures financial protection for the family.
Bonuses
The Simple Reversionary Bonuses are declared by LIC based on its performance and are added to the plan, increasing the maturity and death benefits. The Final Additional Bonus (FAB) may also be given as a special bonus at maturity.
Loan Facility
The policyholder may avail of a loan against the policy after a certain period, helping meet urgent liquidity needs without surrendering the policy.
Tax Benefits
Premiums paid under this plan qualify for deductions under Section 80C of the Income Tax Act. Moreover, the maturity and death benefits are tax-free under Section 10(10D), making it a tax-efficient investment.
How Does the LIC New Money Back Plan 721 Calculator Work?
Understanding the expected benefits and premium payouts can be complex. The LIC New Money Back Plan 721 Calculator helps by estimating:
- Survival benefits are paid every 5 years.
- Maturity amount including bonuses.
- Death benefit at any point in the policy term.
- The premium amount payable is based on age, sum assured, and mode.
Inputs Needed
To use the calculator, you generally need to provide:
- Age of the policyholder.
- Basic Sum Assured (the amount chosen for insurance).
- Premium payment mode (yearly, half-yearly, quarterly, or monthly).
Using these inputs, the calculator applies LIC’s defined formulas and bonus rates to output the benefits over the policy duration.
Stepwise Explanation of the Calculator
Let’s take an example to understand the calculator better:
Suppose a 30-year-old individual buys the plan with a Basic Sum Assured of ₹5,00,000.
- Survival Benefits:
The policyholder receives 15% of ₹5,00,000 = ₹75,000 at the end of the 5th, 10th, 15th, and 20th years. This totals ₹3,00,000 before maturity. - Maturity Benefit:
At the completion of 25 years, the individual receives the remaining amount of the basic sum assured plus the vested bonuses. For instance, if bonuses amount to ₹50,000, the maturity benefit will be ₹2,50,000 (remaining basic sum assured) + ₹50,000 = ₹3,00,000. - Death Benefit:
In case of death during the policy term, the nominee gets at least 125% of the Basic Sum Assured (₹6,25,000 in this example) or 7 times the annual premium (whichever is higher), plus vested bonuses. - Premium Calculation:
The calculator also estimates the annual premium payable for this sum assured and age, making it easier to budget.
Advantages of Using the LIC New Money Back Plan 721 Calculator
The calculator is a powerful tool for prospective policyholders because it:
- Provides a clear picture of when and how much money will be received.
- Helps calculate exact premiums based on specific needs.
- Assists in financial planning by projecting cash flows at different points.
- Enables easy comparison with other insurance or investment plans.
- Removes confusion related to bonuses and survival payouts.
How to Use the LIC New Money Back Plan 721 Calculator Online
Several websites and LIC-authorized platforms provide this calculator online:
- LIC India official site
- Insurance aggregator websites
- Financial advisory portals like PolicyBazaar and BuyPolicy
- LIC Calculator dedicated websites
Using it is straightforward:
- Visit the online calculator page for LIC New Money Back Plan 721.
- Enter required details like age, sum assured, and premium mode.
- Click Calculate to view survival benefits, maturity amount, death benefits, and premium details.
- Analyze the results to decide on purchasing the plan.
FAQs about LIC New Money Back Plan 721
What is LIC New Money Back Plan 721?
It is a 25-year traditional money-back life insurance plan from LIC that offers survival benefits every 5 years along with maturity and death benefits.
Who is eligible to buy this plan?
The entry age for this plan is from 13 to 45 years. The policy term is 25 years, and premiums are paid for the first 20 years.
What are survival benefits?
Survival benefits are periodic payouts made at the end of the 5th, 10th, 15th, and 20th policy years. Each payout is 15% of the basic sum assured.
What happens on maturity?
On maturity (after 25 years), the policyholder receives the remaining sum assured plus vested bonuses declared by LIC.
What is the death benefit under this plan?
If the policyholder dies during the term, the nominee gets the higher of 125% of the Basic Sum Assured or 7 times the annual premium, plus bonuses.
Is there any bonus declared?
Yes, LIC declares Simple Reversionary Bonuses and sometimes a Final Additional Bonus (FAB), which are added to the maturity and death benefits.
Conclusion
The LIC New Money Back Plan 721 is an excellent choice for individuals seeking a mix of periodic returns, life insurance cover, and savings growth. It suits those who prefer a fixed, long-term commitment with regular money-back payouts and the security of LIC’s bonuses.
Using the LIC New Money Back Plan 721 Calculator before purchasing helps in understanding the exact benefits and premiums, enabling better financial planning.