Comprehensive Guide to LIC New Money Back Plan 20 Years (Plan 720 / 920 / 820)
For decades, Indian households seeking a harmonious equilibrium between life insurance protection, guaranteed periodic liquidity, and disciplined long-term capital formation have trusted LIC's New Money Back Plan – 20 Years (Plan No. 720 / 920 / Table 820 / UIN: 512N280V02). Offered by the Life Insurance Corporation of India, Plan 720 is a participating, non-linked endowment assurance product that disburses 20% of the Basic Sum Assured at 5-year intervals while keeping the policyholder covered for 125% of the life cover and accumulating compound bonuses across all 20 years.
Unlike standard endowment policies—such as LIC New Endowment (Plan 714 / 914) or LIC Jeevan Anand (Plan 915)—where your funds remain locked until maturity, LIC Plan 720 provides liquidity at critical life stages (Years 5, 10, and 15) without reducing the terminal bonus accrual on the full sum assured!
1. The 4-Stage Guaranteed Cash Flow Architecture
The hallmark feature of LIC New Money Back 20 Years is its structured payout schedule:
- End of 5th Policy Year: 20% of Basic Sum Assured paid tax-free.
- End of 10th Policy Year: 20% of Basic Sum Assured paid tax-free.
- End of 15th Policy Year: 20% of Basic Sum Assured paid tax-free (coninciding with the completion of all premium payments).
- End of 20th Policy Year (Maturity): 40% of Basic Sum Assured + Full Simple Reversionary Bonuses (for all 20 years) + Final Additional Bonus (FAB).
💡 Total Inflow Summary
Total Benefit = 60% Basic SA (Survival Payouts) + 40% Basic SA (Maturity) + 100% Vested Simple Bonuses + FAB = 100% SA + Bonuses + FAB!
2. The Critical Non-Deduction Death Benefit Shield
One of the most compassionate and legally binding features of LIC Money Back Plans is the Non-Deduction Clause.
If the life assured passes away at any time during the 20-year term—even after receiving the 5th, 10th, or 15th year survival payouts—LIC pays the full "Sum Assured on Death" along with all accumulated Simple Reversionary Bonuses and FAB to the nominee.
Survival benefit installments already paid to the deceased policyholder are NOT deducted from the death claim settlement!
"Sum Assured on Death" is legally defined as the highest of:
- 125% of the Basic Sum Assured; or
- 7 times the Annualised Premium; or
- 105% of Total Premiums Paid up to the date of death.
3. Statutory Eligibility Criteria & Commercial Limits
| Parameter | Statutory Specification |
|---|---|
| Plan Number & UIN | Plan No. 720 / 920 / 820 | UIN: 512N280V02 |
| Policy Term | 20 Years (Fixed) |
| Premium Paying Term (PPT) | 15 Years (Fixed) (5 Years Non-Paying Window) |
| Minimum Basic Sum Assured | ₹1,00,000 (Multiples of ₹5,000) |
| Maximum Basic Sum Assured | No Upper Limit (Subject to underwriting) |
| Minimum Age at Entry | 13 Years (Completed) |
| Maximum Age at Entry | 50 Years (Nearest Birthday) |
| Maximum Maturity Age | 70 Years (Nearest Birthday) |
| Payment Frequencies | Yearly, Half-Yearly, Quarterly, Monthly (NACH / ECS / SSS) |
4. High Sum Assured Rebates & Premium Discounts
LIC rewards larger investments with attractive discounts on tabular premiums:
High Sum Assured Rebates (Discount per ₹1,000 Basic SA on annual premium):
- ₹1,00,000 to ₹1,95,000: Nil
- ₹2,00,000 to ₹4,95,000: ₹2.00 per ₹1,000 Basic Sum Assured
- ₹5,00,000 and Above: ₹3.00 per ₹1,000 Basic Sum Assured
Mode Rebates:
- Yearly Mode: 2% Tabular Rebate
- Half-Yearly Mode: 1% Tabular Rebate
- Quarterly / Monthly: Nil
5. Bonus Accrual & Final Additional Bonus (FAB)
Because LIC Plan 720 is a participating "with-profits" policy, policyholders participate in LIC's annual valuation surplus.
- Simple Reversionary Bonus: Historically declared at approximately ₹39 to ₹42 per ₹1,000 Sum Assured per year for the 20-year term.
- Bonus Accrues on Full 100% SA: Even though 60% of the SA is paid back to you in survival installments during the term, the annual bonus is calculated on the entire 100% Basic Sum Assured for all 20 years!
- Final Additional Bonus (FAB): Ranging from ₹50 to ₹250 per ₹1,000 SA paid at maturity for 20-year policies.
6. LIC Plan 720 (20-Yr Money Back) vs. Plan 721 (25-Yr) vs. Plan 736 (Jeevan Labh)
| Feature / Parameter | LIC Money Back 20 Yrs (Plan 720 / 920) | LIC Money Back 25 Yrs (Plan 721 / 921) | LIC Jeevan Labh (Plan 736 / 936) |
|---|---|---|---|
| Policy Term / PPT | 20 Yrs / 15 Yrs PPT | 25 Yrs / 20 Yrs PPT | 16/10, 21/15, 25/16 PPT |
| Survival Benefit Frequency | Every 5th Year (Yrs 5, 10, 15) | Every 5th Year (Yrs 5, 10, 15, 20) | None (Lump Sum Maturity) |
| Periodic Payout % | 20% SA each (60% Total) | 15% SA each (60% Total) | 0% during term |
| Maturity Payout % | 40% SA + Bonus + FAB | 40% SA + Bonus + FAB | 100% SA + Bonus + FAB |
| Death Benefit Base | 125% of Basic SA | 125% of Basic SA | 100% of Basic SA |
7. Taxation Analysis: Section 80C & Section 10(10D)
- Tax Deduction at Entry (Section 80C): Premiums paid qualify for deduction up to ₹1,50,000 per financial year under the Old Tax Regime.
- 100% Tax-Free Payouts (Section 10(10D)): All survival money-back installments received at years 5, 10, and 15, final maturity proceeds, and death claims are 100% exempt from income tax under Section 10(10D) of the Income Tax Act.
8. Liquidity: Policy Loans & Surrender Facilities
- Policy Loan Facility: Available after 2 full policy years of premium payment. Policyholders can borrow up to 90% of the surrender value (80% in paid-up policies).
- Guaranteed Surrender Value (GSV): Policy acquires surrender value after 2 years. Note: Survival benefits already paid are adjusted in the statutory surrender value calculation.
9. How to Buy LIC New Money Back 20 Years Online with Zero Paperwork
- Calculate Quotation: Enter your age and desired Basic Sum Assured in our calculator above.
- Connect on WhatsApp: Share your calculation directly with Authorized LIC Advisor (Agent Code: LIC10031212).
- Digital Paperless KYC: Complete online Aadhaar/PAN validation and digital medical declaration.
- Official Payment: Pay the premium directly on LIC India's official payment gateway.
- Instant DigiLocker Policy Bond: Receive your digitally signed policy document within 24 to 48 hours.
10. Related LIC Planning Calculators & Resources
- LIC Jeevan Labh (Plan 736 / 936) Calculator – Limited pay endowment with maximum bonus yields.
- LIC Bima Platinum (Plan 770) Calculator – Guaranteed 10% annual income and 70% booster payout.
- LIC New Jeevan Sathi Single Premium (Plan 888) Calculator – Joint life single premium plan.
- LIC New Jeevan Sathi Limited Premium (Plan 889) Calculator – Joint life limited pay with premium waiver.
- LIC New Bima Jyoti (Plan 890 / 860) Calculator – ₹50/1k Guaranteed Additions savings plan.
- LIC Jeevan Anand (Plan 915) Calculator – Living maturity with whole life risk cover.
- Official LIC India Web Portal – Policyholder services and payment gateway.
- Insurance Regulatory and Development Authority of India (IRDAI) – Consumer protection guidelines.