LIC Money Back Plans (Plan 920 & Plan 921): Complete Actuarial Guide
The LIC New Money Back Plans (Table No. 920 for 20 Years and Table No. 921 for 25 Years) are specially engineered participating life assurance contracts designed to provide periodic liquidity to policyholders throughout the policy lifecycle. While regular endowment plans lock in your capital until final maturity, Money Back plans release substantial guaranteed cashflows at fixed 5-year intervals, allowing families to fund recurring life milestones—such as school admissions, home renovations, or anniversary holidays.
Both plans feature a limited premium payment term, meaning your premium liabilities conclude several years prior to the policy expiration date while risk coverage and profit participation continue for the complete tenure.
Comparison: 20-Year (Plan 920) vs. 25-Year (Plan 921)
| Parameter | Plan 920 (20 Years) | Plan 921 (25 Years) |
|---|---|---|
| Policy Term / PPT | 20 Years / Pay for 15 Years | 25 Years / Pay for 20 Years |
| Entry Age Range | 13 to 50 Years (completed) | 13 to 45 Years (completed) |
| Survival Payout Schedule | 20% SA at end of 5th, 10th & 15th Year | 15% SA at end of 5th, 10th, 15th & 20th Year |
| Maturity Payout | Remaining 40% SA + Vested SRB + FAB | Remaining 40% SA + Vested SRB + FAB |
| Minimum Sum Assured | ₹1,00,000 (No upper limit) | ₹1,00,000 (No upper limit) |
No-Deduction Demise Protection Clause
Vital Policyholder Protection
In many private market insurance products, previous survival cash payments are deducted from death benefits. In contrast, under LIC Plan 920 and Plan 921, if the policyholder passes away at any time during the policy tenure, the nominee receives the full Sum Assured on Death (125% of Basic Sum Assured or 7 times annualized premium) plus all accrued Simple Reversionary Bonuses and FAB. None of the survival benefits already paid to the family are ever deducted!
Statutory GST & Income Tax Exemption (FY 2026-27)
GST Application Rules
- Year 1 Premium: 4.5% statutory GST (2.25% CGST + 2.25% SGST).
- Year 2 Onwards: 2.25% statutory GST (1.125% CGST + 1.125% SGST).
Section 80C & Section 10(10D)
Premiums qualify for tax deductions up to ₹1,50,000 under Section 80C. All periodic survival money-back installments and the final maturity amount are 100% tax-free under Section 10(10D) of the Income Tax Act.
Frequently Asked Questions (FAQ)
How do survival benefits work in LIC 20-Year Money Back Plan (Plan 920)?
Under Plan 920, you pay premiums for 15 years while policy coverage lasts for 20 years. LIC pays 20% of the Basic Sum Assured at the end of the 5th, 10th, and 15th policy years. At the end of the 20th year, the remaining 40% of Sum Assured plus all accrued Simple Reversionary Bonuses and Final Additional Bonus are paid out as maturity.
How do survival benefits work in LIC 25-Year Money Back Plan (Plan 921)?
Under Plan 921, you pay premiums for 20 years while policy coverage lasts for 25 years. LIC pays 15% of the Basic Sum Assured at the end of the 5th, 10th, 15th, and 20th policy years. At the end of the 25th year, the remaining 40% of Sum Assured plus all accrued bonuses and FAB are paid out as maturity.
Are previous survival benefits deducted if the policyholder dies during the term?
No! One of the greatest features of LIC Money Back plans is that in the unfortunate event of the life assured's demise, the nominee receives the full 125% of Basic Sum Assured plus all accrued bonuses without any deduction of survival payouts already disbursed.
What are the latest bonus rates for Plans 920 and 921?
Simple Reversionary Bonus rates for Plan 920 (20 Years) historically average around ₹39 per ₹1,000 Sum Assured. For Plan 921 (25 Years), SRB averages ₹44 per ₹1,000 Sum Assured. Terminal Final Additional Bonuses (FAB) also apply at maturity.
Are money back survival payouts and maturity amounts tax-free?
Yes, under Section 10(10D) of the Income Tax Act, all periodic survival money-back installments and the final maturity amount are completely tax-free.
Case Study: ₹10 Lakh Policy Under 20-Year Money Back (Plan 920)
Consider a 30-year-old saver selecting a ₹10,00,000 Sum Assured policy under Plan 920 (20-Year Term, 15-Year PPT):
- End of Year 5 Survival Cashback: 20% of ₹10,00,000 = ₹2,00,000 (Tax-Free).
- End of Year 10 Survival Cashback: 20% of ₹10,00,000 = ₹2,00,000 (Tax-Free).
- End of Year 15 Survival Cashback: 20% of ₹10,00,000 = ₹2,00,000 (Tax-Free). Premium payment stops!
- End of Year 20 Maturity Payout: Remaining 40% of SA (₹4,00,000) + Vested SRB (approx. ₹39 × 1,000 × 20 = ₹7,80,000) + FAB (approx. ₹70,000) = ₹12,50,000.
- Total Payouts Over Term: ₹2,00,000 + ₹2,00,000 + ₹2,00,000 + ₹12,50,000 = ₹18,50,000, all 100% tax-free under Section 10(10D).
