Lic Money Back Calculator
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Reviewed by Calculator Editorial Team
A LIC Money Back policy is a type of life insurance that provides a guaranteed sum assured at the end of the policy term, while also returning a portion of the premiums paid during the policy term. This calculator helps you estimate your potential returns from a LIC Money Back policy.
How LIC Money Back Policy Works
A LIC Money Back policy is designed to provide financial security to your loved ones while also offering a return on your premium payments. Here's how it works:
Key Features
- Sum Assured: The amount that will be paid to your nominee at the end of the policy term.
- Policy Term: The duration for which the policy remains active.
- Premium Paying Term: The period during which you pay the premiums.
- Money Back Benefits: A portion of your premiums is returned to you during the policy term.
How Premiums Are Calculated
The premium amount is calculated based on factors such as your age, the sum assured, and the policy term. LIC uses actuarial tables to determine the premium amount, which ensures that the policy remains affordable and sustainable.
Money Back Benefits
During the policy term, you receive a portion of your premiums as money back benefits. The exact amount and frequency of these benefits depend on the specific policy you choose.
Maturity Benefits
At the end of the policy term, you receive the sum assured as a lump sum payment. This amount is guaranteed and cannot be reduced due to any claims.
Formula Used
The maturity amount of a LIC Money Back policy can be estimated using the following formula:
Maturity Amount = Sum Assured + (Total Premiums Paid - Total Money Back Benefits)
Where:
- Sum Assured: The amount that will be paid at the end of the policy term.
- Total Premiums Paid: The sum of all premiums paid during the policy term.
- Total Money Back Benefits: The sum of all money back benefits received during the policy term.
This formula provides an estimate of the total amount you will receive at the end of the policy term, including the sum assured and any remaining premiums after accounting for money back benefits.
Worked Example
Let's consider an example to understand how the LIC Money Back Calculator works.
Example Scenario
- Sum Assured: ₹5,00,000
- Policy Term: 20 years
- Premium Paying Term: 20 years
- Annual Premium: ₹20,000
- Money Back Benefit: 10% of annual premium
Calculations
Using the formula:
Total Premiums Paid = Annual Premium × Premium Paying Term
Total Premiums Paid = ₹20,000 × 20 = ₹4,00,000
Total Money Back Benefits = (Money Back Benefit × Annual Premium) × Premium Paying Term
Total Money Back Benefits = (10% × ₹20,000) × 20 = ₹4,00,000
Maturity Amount = Sum Assured + (Total Premiums Paid - Total Money Back Benefits)
Maturity Amount = ₹5,00,000 + (₹4,00,000 - ₹4,00,000) = ₹5,00,000
In this example, the maturity amount is ₹5,00,000, which is the sum assured. This is because the total premiums paid and the total money back benefits are equal.
Frequently Asked Questions
What is a LIC Money Back policy?
A LIC Money Back policy is a type of life insurance that provides a guaranteed sum assured at the end of the policy term, while also returning a portion of the premiums paid during the policy term.
How is the premium amount calculated for a LIC Money Back policy?
The premium amount is calculated based on factors such as your age, the sum assured, and the policy term. LIC uses actuarial tables to determine the premium amount, which ensures that the policy remains affordable and sustainable.
What are the money back benefits in a LIC Money Back policy?
During the policy term, you receive a portion of your premiums as money back benefits. The exact amount and frequency of these benefits depend on the specific policy you choose.
What is the maturity benefit in a LIC Money Back policy?
At the end of the policy term, you receive the sum assured as a lump sum payment. This amount is guaranteed and cannot be reduced due to any claims.
How can I use the LIC Money Back Calculator?
Simply enter the sum assured, policy term, premium paying term, annual premium, and money back benefit percentage into the calculator. Click the "Calculate" button to see your estimated maturity amount and other details.