What happens when your LIC policy matures?
When your Life Insurance Corporation of India (LIC) policy reaches its maturity date, the policy term ends and LIC pays out the accumulated maturity benefit (such as the sum assured plus vested bonuses or loyalty additions, depending on the plan), provided you have paid all your premiums on time.
What Happens Step-by-Step
- Intimation Letter: About two months before the maturity date, the servicing LIC branch sends a notification letter to your registered address with details of the payable amount.
- Document Submission: You need to submit specific paperwork to the servicing branch or via the LIC Customer Portal:
- Duly completed and signed Discharge Form
- Original Policy Bond
- NEFT Mandate Form along with bank account proof (cancelled cheque or passbook copy)
- KYC documents (ID proof and address proof)
- Payout Processing: Once LIC verifies the documents, the maturity proceeds are credited directly to your bank account via NEFT on or around the due date.
- Coverage Cessation: Once the maturity payout is processed, the life cover under that policy stops.
Important Notes
- Term Plans vs. Endowment/Whole Life Plans: If you hold a pure term insurance policy, it simply expires upon reaching its term with no maturity payout (unless it is a Return of Premium term plan). Endowment, money-back, and whole-life policies carry the savings/maturity benefit described above.
- Unclaimed Amounts: If you do not claim or submit your details immediately, the money remains due to you, and LIC classifies it as an unclaimed amount until you file the necessary discharge documents.
What happens when a 20 year life insurance policy matures?
When a 20-year term life insurance policy reaches the end of its term, your coverage ends, your monthly payments stop, and you do not receive a cash payout. In the insurance industry, this is technically called an expiration rather than a maturity, as explained by Fidelity Life.
Unless you added a rare "return of premium" rider when you first bought the policy, you will not get your past payments back.
What Happens Immediately
- Coverage stops: Your family will not get a death benefit if you pass away after this date.
- Billing stops: You no longer owe any monthly or yearly premium payments.
- No cash value: Standard term plans do not save up money for you to cash out.
Your Options
If your 20-year term is ending, you have four main choices:
- Let the policy lapse: Do nothing if your kids are grown, your mortgage is paid off, and you no longer need life insurance.
- Renew the policy: Keep your coverage active, but expect your monthly payments to increase significantly because you are 20 years older.
- Convert to permanent coverage: Switch your term plan into a whole life or permanent policy without taking a new health exam, if your contract allows it.
- Buy a new policy: Shop for a brand-new term life policy to lock in a new set number of years.
What to do if my LIC policy is matured?
Submit a filled maturity claim form, your original policy bond, and bank details to your servicing LIC Branch to receive your payout.
📋 Required Documents
- Original policy bond document
- Duly filled and signed Discharge Form (Form No. 3825)
- PAN card and Aadhaar card (self-attested copy)
- Bank account details (cancelled cheque or passbook copy for NEFT)
🚶♂️ Steps to Claim
- Step 1: Check Intimation: LIC usually sends a maturity claim discharge form 1 to 2 months before the due date.
- Step 2: Submit Documents: Walk into your servicing LIC branch or any nearby LIC branch to submit your original bond and paperwork.
- Step 3: Direct Credit: Once verified, LIC transfers the maturity proceeds directly to your bank account via NEFT.
Opinions on Reddit are mixed, as some users report receiving funds smoothly if online KYC and bank details are fully updated, while others emphasize that visiting the branch with the physical bond remains the standard requirement.
How much money will I get after 20 years of LIC policy?
The exact amount you will get after 20 years from a Life Insurance Corporation of India (LIC) policy depends heavily on your Basic Sum Assured, your specific plan type, and the annual bonus rates declared by LIC.
Because your exact policy name is missing, we must make a reasonable assumption. A 20-year term typically points to one of LIC's most popular plans: LIC's New Money Back Plan (20 Years - Plan 920). If your policy is a standard Endowment Plan, the math changes slightly since you do not receive intermediate payouts.
Option A: LIC's New Money Back Plan - 20 Years (Plan 920)
If you have a Money Back policy, you receive payouts during the term, meaning your final maturity amount is a remaining percentage of the sum assured plus your total accumulated bonuses.
- Premium Payment Term: You pay premiums for 15 years instead of 20.
- Survival Payouts (During the 20 Years): You get 20% of the Sum Assured at the end of the 5th, 10th, and 15th years.
- Final Maturity Payout (Year 20): You get the remaining 40% of the Sum Assured + Accrued Reversionary Bonuses + Final Additional Bonus (FAB).
Simulated Returns Example (Assuming a ₹10 Lakh Sum Assured)
Based on historical average LIC bonus estimates (~₹35 to ₹40 per thousand per year):
| Milestone Event | Payout Percentage | Estimated Cash Received |
|---|---|---|
| End of Year 5 | 20% of Sum Assured | ₹2,00,000 |
| End of Year 10 | 20% of Sum Assured | ₹2,00,000 |
| End of Year 15 | 20% of Sum Assured | ₹2,00,000 |
| End of Year 20 (Maturity) | 40% of Sum Assured + Accumulated Bonuses | ₹11,00,000 to ₹12,00,000 |
| Total Lifetime Returns | ~110% to 120% of Base + Bonus | ~₹17,00,000 to ₹18,00,000 |
Option B: LIC Endowment Policy - 20 Years (Plan 914)
If you have a traditional savings/endowment plan, you do not receive money back every 5 years. Instead, you get one large lumpsum amount at the very end.
- Maturity Calculation Formula: 100% Sum Assured + Accrued Bonuses + FAB.
- Simulated Returns (Assuming a ₹10 Lakh Sum Assured): You would receive nothing during the 20 years, but a massive single payout of approximately ₹18,00,000 to ₹19,50,000 at the end of Year 20.
⚠️ Hidden Realities & Advice
Traditional LIC policies are highly secure and provide tax-free maturity benefits under Section 10(10D). However, from a wealth-building perspective, they have a major downside:
- Low Annualized Returns (XIRR): When you factor in the premiums paid over 15 to 20 years against the final payouts, the actual return on your investment usually translates to an annualized rate of only 4% to 6%.
- Inflation Risk: A payout of ₹18 Lakhs 20 years from now will have significantly less purchasing power than it does today.
My primary recommendation is to keep the policy if it is already near maturity to avoid severe early exit/surrender penalties. However, if you are planning new long-term financial goals, look toward a combination of Term Life Insurance (for high life cover protection) and Equity Mutual Funds/PPF (which historically generate 8% to 12%+ yields) to protect your money against inflation.
To calculate your exact final cash figure, could you share:
- What is the exact name or Plan Number of your policy?
- What is your Basic Sum Assured amount?
- How many years of premiums have you already paid?
What is the LIC 20 years money back policy?
LIC's New Money Back Plan - 20 Years (Plan No. 720) is a non-linked, participating, individual life assurance savings plan that provides a mix of life insurance protection and periodic payouts.
Key Features & Eligibility
- Policy Term: 20 years
- Premium Paying Term: 15 years
- Entry Age: 13 to 50 years
- Maximum Maturity Age: 70 years
- Minimum Basic Sum Assured: ₹200,000 (no upper limit)
Payouts and Benefits
- Survival Benefits: You receive 20% of the basic sum assured at the end of the 5th, 10th, and 15th policy years.
- Maturity Benefit: At the end of the 20-year term, you receive the remaining 40% of the basic sum assured plus accrued simple reversionary bonuses and final additional bonuses (if any).
- Death Benefit: If the policyholder passes away during the term, the nominee receives the "Sum Assured on Death" plus accumulated bonuses, without any deduction for the survival benefits already paid out.
Additional Options
- Riders: You can add optional riders like Accidental Death and Disability Benefit or a New Term Assurance Rider.
- Loan Facility: Loans are available after the policy acquires a surrender value.
LIC Maturity claim process in Hindi | LIC Maturity claim documents | LIC maturity claim forms
At what age should you cancel your life insurance?
There is no single fixed age to cancel life insurance, but many people no longer need it once they reach their 60s or retirement age.
When You Might Not Need Life Insurance Anymore
- Your mortgage is paid off: You no longer carry large, long-term debts.
- Your children are grown: Your kids are financially independent and finished with school.
- You have enough savings: Your retirement accounts, investments, and Social Security can fully support your spouse or cover final expenses.
- Your term policy is ending: If your term ends and your financial responsibilities are gone, you can let the policy lapse instead of renewing at a much higher cost. Opinions on Reddit are mixed, with some suggesting you keep cheap near-expiration policies just in case, while others advise dropping unneeded coverage immediately.
When You Should Keep Life Insurance
- You still have dependents: Someone relies on your ongoing income to live.
- You have outstanding debts: Large medical bills, business loans, or a remaining mortgage exist.
- You want to leave an inheritance: You want to provide tax-free wealth or cover estate taxes.
- It is a permanent policy: Whole life policies build cash value, and canceling them can trigger surrender fees or taxes.
You can read more about evaluating your needs at Fidelity Life or check details on buying coverage as a senior via CBS News.
What happens after 10 years of paying life insurance?
What happens after 10 years of paying life insurance depends entirely on whether you have a 10-year term policy or a 10-pay permanent policy.
10-Year Term Life Insurance
If you bought a 10-year term policy, the contract reaches its end date after 10 years.
- Coverage ends: Your protection stops, and no death benefit is paid out if you outlive the term.
- No money back: Term insurance does not build cash value, so you do not get your paid premiums back (unless you bought a rare return-of-premium rider).
- Your options: You can let the policy expire, apply to renew it at a much higher rate based on your current age, or convert it to permanent coverage if your policy allows.
10-Pay Whole Life Insurance
If you bought a specialized 10-pay whole life policy, you planned to finish all required payments in 10 years. Read more details on how this works via Western & Southern.
- Policy is paid-up: You no longer owe any monthly or annual premium payments.
- Lifelong coverage: Your permanent death benefit stays active for the rest of your life.
- Cash value continues: The accumulated cash value inside the policy keeps growing on a tax-deferred basis, and you can still borrow against it if needed.
How much is a $250000 life insurance policy for a 60 year old man?
For a healthy, non-smoking 60-year-old man, a $250,000 life insurance policy typically costs anywhere from $77 to $254 per month for term life coverage, or roughly $253 to $761+ per month for whole life coverage.
The final rate depends heavily on the policy type, the term length, and your specific health profile.
Cost Breakdown by Policy Type
| Policy Type & Duration | Average Monthly Cost Range (Non-Smoker) | Why It Varies |
|---|---|---|
| 10-Year Term | $77 – $125 | Lowest cost; covers you until age 70. |
| 20-Year Term | $168 – $254 | Mid-range cost; guarantees protection until age 80. |
| Whole Life (Permanent) | $253 – $761+ | Expensive; locks in lifelong coverage and builds cash value. |
⚠️ Hidden Drivers That Will Jack Up Your Premium
- Tobacco Use: If you smoke or use nicotine products, your premiums will easily double or triple compared to the rates above.
- Skipping the Medical Exam: "No-exam" or guaranteed-issue policies are highly convenient if you have severe health issues, but they carry significantly higher premiums for the same $250,000 payout.
- Waiting Even a Few Years: Life insurance rates escalate sharply once you hit your 60s. Locking a rate in at age 60 is much cheaper than waiting until 62 or 65.
My Recommendation
If your primary goal is covering temporary liabilities like a remaining mortgage or income replacement until your partner retires, a 10- or 15-year term policy provides the strongest protection for your dollar.
To narrow this down: What specific final goal or debt are you trying to protect with this coverage? Let me know if you have any existing pre-existing conditions, as that will alter which carrier gives the best rate.
Can we close the LIC before maturity?
Yes, you can close a Life Insurance Corporation of India (LIC) policy before its maturity date through a process called surrender. However, doing so is generally not recommended because you will lose your life cover and receive a lower payout than waiting until maturity.
Key Rules and Conditions
- Lock-in Period: You cannot surrender a regular or limited premium policy immediately. You must pay premiums for at least 2 to 3 years (depending on the policy term) before it acquires a surrender value. Single-premium plans can generally be surrendered after 1 year.
- Free-Look Period: If you bought the policy recently, you can cancel it within 15 days of receiving the documents for a full refund (minus minor risk charges).
- Loss of Benefits: Once surrendered, your life insurance cover stops immediately, future bonuses are forfeited, and you cannot restart the policy.
- Surrender Value: The amount you receive (the surrender value) is often a fraction of the total premiums paid, especially if closed in the early years.
Alternatives to Surrendering
If you need money or want to stop paying, consider these options instead of a full closure:
- Make the policy Paid-Up: Stop paying premiums, and the policy will continue with a reduced sum assured value until maturity.
- Take a Loan: You can borrow money against your LIC policy if it has acquired a surrender value, keeping your insurance active.
Can I get a refund for my lapsed LIC policy?
You cannot get a direct refund of past premiums for a lapsed Life Insurance Corporation of India (LIC) policy, but you may be eligible for a surrender value or paid-up value if you paid premiums for at least three consecutive years.
Check your account options or policy details on the Life Insurance Corporation of India Portal.
Refund and Payout Rules
- No Direct Refund: When a policy lapses due to unpaid premiums after the grace period, coverage stops, and premiums already paid go into the general life fund.
- Surrender Value: If you paid your premiums for 3 full years or more, the policy may acquire a guaranteed surrender value that you can claim by surrendering the policy.
- Paid-Up Value: If you stop paying after 3 years, the policy can automatically convert to a paid-up policy with a reduced sum assured payable at maturity or death, rather than a cash refund today.
Alternative Options
- Revival: You can revive your lapsed policy within 2 to 5 years from the date of the first unpaid premium (depending on the plan) by paying the overdue amounts, late fees, and fulfilling health requirements.
- Check Status: Log into your customer account on the official portal or visit a local branch office to see if your specific policy qualifies for a surrender payout.