LIC money-back plans are a type of life insurance policy that provides periodic payouts during the policy term, along with life insurance coverage. Here’s a breakdown:
What LIC Money-Back Plans Are:
- Periodic Payouts:
- These plans offer regular payouts, known as “survival benefits,” at predetermined intervals during the policy term.
- These payouts provide a stream of income while the policy is active.
- Death Benefit:
- In the event of the policyholder’s death during the policy term, the beneficiaries receive a death benefit.
- Maturity Benefit:
- At the end of the policy term, if the policyholder survives, they receive a maturity benefit.
- Combination of Insurance and Liquidity:
- Money-back plans offer a blend of life insurance coverage and liquidity through periodic payouts.
- Potential Bonuses:
- Some LIC money-back plans are participating policies, which may offer bonuses based on the company’s performance.
Why Consider Purchasing an LIC Money-Back Plan:
- Regular Income:
- The periodic payouts provide a steady stream of income, which can be used to meet various financial needs.
- Financial Security:
- The death benefit ensures financial protection for your family in your absence.
- Meeting Short-Term Goals:
- The payouts can be used to achieve short-term financial goals, such as children’s education, down payments, or travel.
- Liquidity:
- Money-back plans offer liquidity, as you receive payouts before the policy matures.
- Tax Benefits:
- Like other life insurance policies, money-back plans may offer tax benefits, such as tax-free death benefits for beneficiaries, and potential tax savings on premiums under section 80C, and maturity benefits under section 10(10D).
Key Considerations:
- The periodic payouts may be lower than the potential returns from other investment options.
- It’s essential to understand the policy’s terms and conditions, including the payout schedule, death benefit, and maturity benefit.
- It is important to understand that the total return of the policy may be lower than other investment options.
- Consult with a financial advisor to determine if a money-back plan aligns with your financial goals and needs.
As always, for the most accurate and up to date information, it is best to contact LIC, or a qualified financial planner.
Sakthi Prabhakar 
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