Lic Money Back Policy 20 Years Maturity Calculator

This calculator helps you determine the maturity amount of a LIC Money Back Policy after 20 years. The LIC Money Back Policy is a type of life insurance policy that provides both protection and savings benefits. It offers regular premium payments and partial withdrawals during the policy term, with a final maturity amount paid at the end.

How LIC Money Back Policy Works

A LIC Money Back Policy is a combination of life insurance and savings plan. The policyholder pays regular premiums, and the insurer provides partial withdrawals at specified intervals during the policy term. At the end of the term, the policy matures with a final sum.

The key features of a LIC Money Back Policy include:

Regular premium payments
Partial withdrawals during the policy term
Final maturity amount at the end of the term
Death benefit to the nominee

The policy term is typically 15, 20, or 25 years, with partial withdrawals usually available after 5 years. The maturity amount is calculated based on the premiums paid, the policy's interest rate, and the number of years the policy has been in force.

Calculation Method

The maturity amount of a LIC Money Back Policy is calculated using the following formula:

Maturity Amount = (Annual Premium × Policy Term) + (Annual Premium × Interest Rate × (Policy Term × (Policy Term + 1)) / 2)

Where:

Annual Premium is the amount paid annually
Policy Term is the duration of the policy in years
Interest Rate is the annual interest rate applied to the premiums

This formula accounts for the sum of all premiums paid plus the interest earned on those premiums over the policy term.

Worked Example

Let's calculate the maturity amount for a LIC Money Back Policy with the following details:

Annual Premium: $10,000
Policy Term: 20 years
Interest Rate: 5%

Using the formula:

Maturity Amount = ($10,000 × 20) + ($10,000 × 0.05 × (20 × 21) / 2)

= $200,000 + ($500 × 210 / 2)

= $200,000 + $52,500

= $252,500

The maturity amount for this policy would be $252,500 after 20 years.

Comparison with Other Policies

Here's how a LIC Money Back Policy compares with other common insurance policies:

Policy Type	Premium Payments	Withdrawals	Maturity Amount	Death Benefit
LIC Money Back Policy	Regular annual payments	Partial withdrawals during term	Final maturity amount	Yes
Term Insurance	One-time or regular payments	No	No	Yes
Endowment Policy	Regular payments	No	Yes	Yes
Unit-Linked Insurance	Regular payments	No	Depends on fund performance	Yes

The LIC Money Back Policy stands out for its combination of protection and savings benefits, with the added advantage of partial withdrawals during the policy term.

Frequently Asked Questions

What is the minimum age to invest in a LIC Money Back Policy?: The minimum age to invest in a LIC Money Back Policy is typically 18 years, though some policies may allow entry at a younger age with parental consent.
Can I withdraw money from a LIC Money Back Policy before maturity?: Yes, partial withdrawals are allowed after a certain period (usually 5 years) during the policy term. The amount and frequency of withdrawals depend on the specific policy terms.
Is the maturity amount taxable?: The maturity amount is generally tax-free under the Income Tax Act, 1961, as it is considered a long-term capital gain. However, any withdrawals made during the policy term may be subject to tax.
What happens if the policyholder dies before maturity?: If the policyholder dies before maturity, the nominee receives the death benefit, which is typically the sum of all premiums paid plus any accumulated bonuses or interest.
Can I surrender the policy before maturity?: Yes, you can surrender the policy before maturity, but you will receive only the sum of premiums paid minus any applicable surrender charges. The surrender value is typically less than the maturity amount.