20-Years Money Back Plan (920)
MONEY BACK Plan is Very Popular in our Country for the Simple Reason that this is the ONLY CONCEPT which gives periodical Returns to the Policyholder in the form of “Money Back” once in 5 years. This Product has an Universal Appeal which is liked tremendously by Lower Middle Class as well as HNI Segments. Anybody aged between 13 years to 50 years can take this Plan. Term is fixed for 20 years but Premium Paying Term is just for 15 years. This Plan has a Premium Holiday of 5 Years.
π― At the End of 5th Year: 20% of the SA
π― At the End of 10th Year: 20% of the SA
π― At the End of 15th Year: 20% of the SA
π― On Maturity, Balance 40% SA + Bonus + FAB
DEATH CLAIM in MONEY BACK is Par Excellence. When Death takes place anytime during the Term, 125% of the Sum Assured + Bonus is payable to the Nominee. There will be NO deduction of already paid Money Back amount from the Death Claim Amount. More on Marketing aspects would be dealt in the Subsequent messages.
How 920 works
Let us assume we are selling Plan 920 to a 25 years HNI for 25 Lacs SA with an Annual Premium of 1.95 Lacs. Benefits are as follows:
π 5,00,000 at the end of 5th Year
π 5,00,000 at the end of 10th year
π 5,00,000 at the end of 15th year
π 30,00,000 at the end of 20th year
In the first 5 years, Client pays 9.75 Lacs and gets back 5 Lacs. Same is the case in 10th & 15 years. So, Clients money that is LOCKED with LIC at the end of 15 years is just 14.5 Lacs. For 14.5 Lacs, Client would be getting 30 Lacs Returns (Tax-Free).
Very Ideal for HNI Businessman from Liquidity Point of View.
I shall continue with the Beauty of 20-year Money Back Plan (920) on Death Claim Aspects:
Money Back is a High Risk Plan which offers 125% of the Sum Assured as Natural Death Coverage. Accident Benefit Cover is another 100%. For a 25 Lacs Policy, the starting Day Natural Risk Cover is 32.25 Lacs. It keeps increasing year-after-year and reaches 51.25 Lacs during the end stages. Such an Increasing Risk Cover is very much needed for HNIs.
The Greatest Humanitarian Gesture on the Part of LIC pertaining to MONEY BACK PLAN is, we don’t deduct the already paid Survival Benefit (money back) from the Death Claim Proceeds. Even if the LA die in the 19th year, his Nominee would be receiving 50 Lacs as Claim Amount without any deduction. Such is the Beauty of Money back plan 920.
25-Years Money Back Plan (921)
Let us now see 25-Years Money Back Plan (921). This is little Economical compared to Plan 920. Also, Bonus and FAB rates in Plan 921 is MORE than in 920. This Product can be taken by anybody aged between 13 years to 45 years. Term is fixed for 25 years but Premium Paying Term is just 20 years. As in Plan 920, we have Premium Holiday for the last 5 years. Let us now see the Money Back payable in Plan 921:
π― At the End of 5th Year: 15% of the SA
π― At the End of 10th Year: 15% of the SA
π― At the End of 15th Year: 15% of the SA
π― At the End of 20th Year: 15% of the SA
π― On Maturity, Bal 40% SA + Bonus + FAB
As you can see above, the Percentage of the Sum Assured payable as Money back every 5 years is 15%. In this Plan too, Death Claim entails 125% of the Sum Assured anytime during the Term of the Policy with NO deduction of already paid Money Back amount.
How 921 works
Assume you are an Upper Middle Class Client aged 30-Years who is interested to save TAX and also to get Periodical Money back. For such Customers, Plan 921 is the BEST of the BEST. Annual Premium for 25 Lacs SA would be Rs.1,52,495 (Very Ideal for 80 C Tax Rebate). He needs to pay it for 20 years. Following are the Benefits:
3,75,000 at the end of 5th Year
3,75,000 at the end of 10th year
3,75,000 at the end of 15th year
3,75,000 at the end of 20th year
43,12,500 at the end of 25th year
In the first 5 years, you pay Rs.7,62,475 to get back more than 50% of what he has paid (Rs.3,75,000). The same happens at the end of 10th, 15th & 20th year. So, Client’s money that is LOCKED with LIC at the end of 20 years is just 15.5 Lacs. For 15.5 Lacs, Client would be getting 44 Lacs (Tax-free) after 5 years on the date of Maturity.
RISK COVER & LIQUIDITY
As already explained in Plan 920, the RISK COVER in MONEY BACK is amazingly awesome with a Starting Day Natural Cover Risk at 125% of the Sum Assured and Accident Benefit Risk at another 100% of the Sum Assured. This Risk Cover keeps increasing YEAR-AFTER-YEAR till Maturity. For a 25 Lacs Policy, the Natural Risk Cover starts at 32 Lacs and goes up to 65 Lacs; the Accidental Risk Cover starts at 57 Lacs and goes up to 90 Lacs. Needless to add, in the event of DEATH CLAIM, already paid Survival Benefit to the Customer is NOT deducted from the death claim amount given to Nominee.
LIQUIDITY in the form of LOAN is available after 2-years. For Businessmen Clients, LIQUIDITY in the form of MONEY BACK (Tax-free) is a BOON. In addition to this Money back, should need arise, Clients can take LOAN also to supplement their FINANCIAL Requirement. So, MONEY BACK PLANS are BEST of the BEST from LIQUIDITY angle also.