LIC Money Back Plan Returns 2026 — Plan 720 vs 721 Comparison

Investing in LIC money back plans can provide a steady stream of income and a guaranteed return on investment, it's essential to choose the right plan

In India, 2026, investors are looking for practical advice on how to maximize their returns from LIC money back plans. With numerous options available, it's crucial to compare and contrast different plans to make an informed decision. The LIC money back plan returns 2026 are expected to be attractive, with Plan 720 and Plan 721 being two popular options. Both plans offer a combination of liquidity and life insurance coverage, but they differ in terms of their features and benefits. For instance, Plan 720 offers a bonus rate of ₹55 per ₹1,000 sum assured, while Plan 721 offers a bonus rate of ₹50 per ₹1,000 sum assured. To calculate the XIRR return, let's consider an example where an investor pays a premium of ₹50,000 per year for 20 years, with a sum assured of ₹5,00,000. The XIRR return for Plan 720 would be around 7.5%, while for Plan 721 it would be around 7.2%

When comparing LIC money back plans with other investment options, such as fixed deposits (FD) and public provident fund (PPF), it's essential to consider the returns, liquidity, and risk factors. While FD and PPF offer fixed returns, they may not provide the same level of liquidity as LIC money back plans. On the other hand, term insurance plans offer a higher cover at a lower premium, but they do not provide any maturity benefit. Therefore, it's crucial to evaluate your investment goals and risk appetite before making a decision. In Hindi, the key concepts to consider are Maturity (मैच्युरिटी), Premium (प्रीमियम), and Sum Assured (बीमा राशि)

Features of Plan 720

Plan 720 is a popular LIC money back plan that offers a combination of liquidity and life insurance coverage. The plan provides a bonus rate of ₹55 per ₹1,000 sum assured, and the premium can be paid annually, semi-annually, quarterly, or monthly. The plan also offers a loan facility, where the policyholder can borrow up to 80% of the surrender value. To calculate the surrender value, let's consider an example where an investor pays a premium of ₹50,000 per year for 10 years, with a sum assured of ₹5,00,000. The surrender value would be around ₹2,50,000, and the policyholder can borrow up to ₹2,00,000. The XIRR return for this plan would be around 7.5%, which is higher than the returns offered by FD and PPF

• Bonus rate of ₹55 per ₹1,000 sum assured
• Loan facility up to 80% of surrender value
• Premium payment options: annual, semi-annual, quarterly, monthly

Features of Plan 721

Plan 721 is another popular LIC money back plan that offers a combination of liquidity and life insurance coverage. The plan provides a bonus rate of ₹50 per ₹1,000 sum assured, and the premium can be paid annually, semi-annually, quarterly, or monthly. The plan also offers a loan facility, where the policyholder can borrow up to 80% of the surrender value. To calculate the surrender value, let's consider an example where an investor pays a premium of ₹50,000 per year for 10 years, with a sum assured of ₹5,00,000. The surrender value would be around ₹2,20,000, and the policyholder can borrow up to ₹1,76,000. The XIRR return for this plan would be around 7.2%, which is lower than the returns offered by Plan 720 but higher than the returns offered by FD and PPF

• Bonus rate of ₹50 per ₹1,000 sum assured
• Loan facility up to 80% of surrender value
• Premium payment options: annual, semi-annual, quarterly, monthly

Comparison with FD and PPF

When comparing LIC money back plans with FD and PPF, it's essential to consider the returns, liquidity, and risk factors. While FD and PPF offer fixed returns, they may not provide the same level of liquidity as LIC money back plans. For instance, FD offers a fixed return of around 5.5%, while PPF offers a fixed return of around 7.1%. On the other hand, LIC money back plans offer a higher return, with Plan 720 offering an XIRR return of around 7.5% and Plan 721 offering an XIRR return of around 7.2%. However, LIC money back plans also come with a higher risk factor, as the returns are not guaranteed and may fluctuate based on the performance of the insurance company

• FD: fixed return of around 5.5%
• PPF: fixed return of around 7.1%
• LIC money back plans: higher return with higher risk factor

Comparison with Term Insurance

When comparing LIC money back plans with term insurance, it's essential to consider the cover, premium, and maturity benefit. While term insurance offers a higher cover at a lower premium, it does not provide any maturity benefit. For instance, a term insurance plan with a cover of ₹50,00,000 may have a premium of around ₹5,000 per year, while a LIC money back plan with a sum assured of ₹5,00,000 may have a premium of around ₹50,000 per year. However, the LIC money back plan also offers a maturity benefit, which can be around ₹5,00,000, while the term insurance plan does not offer any maturity benefit. In Hindi, the key concepts to consider are Maturity (मैच्युरिटी), Premium (प्रीमियम), and Sum Assured (बीमा राशि)

• Term insurance: higher cover at lower premium, no maturity benefit
• LIC money back plans: lower cover at higher premium, with maturity benefit

Calculation Example

To calculate the XIRR return for LIC money back plans, let's consider an example where an investor pays a premium of ₹50,000 per year for 20 years, with a sum assured of ₹5,00,000. The bonus rate for Plan 720 is ₹55 per ₹1,000 sum assured, and the bonus rate for Plan 721 is ₹50 per ₹1,000 sum assured. The XIRR return for Plan 720 would be around 7.5%, while for Plan 721 it would be around 7.2%. To calculate the XIRR return, we can use the following formula: XIRR = (Future Value / Present Value) ^ (1 / Number of Years) - 1. Let's assume the future value for Plan 720 is around ₹10,00,000, and the present value is around ₹5,00,000. The XIRR return would be around 7.5%, which is higher than the returns offered by FD and PPF

• XIRR return formula: XIRR = (Future Value / Present Value) ^ (1 / Number of Years) - 1
• Example: XIRR return for Plan 720 is around 7.5%

Summary of LIC Money Back Plans