How to Use LIC Money Back or Survival Benefit Wisely – A Smart Investor’s Strategy

 Many policyholders receive LIC Money Back or Survival Benefit every END OF 5TH year. Most people either keep this money in cash OR BANK SAVING or use it to pay future policy premiums. But if you truly understand personal finance, you know that keeping cash or paying more than six months of advance premium is not a smart move. Instead, you can invest this money back smartly and make it work for you.

Let’s understand this with a real-life example.

1️⃣ Step 1 – Pay Your Six-Month Premium and Invest the Balance

Suppose you received ₹20,000 as LIC money back. Your six-month premium is ₹4,196. You can pay that amount to keep your policy active and invest the remaining ₹15,000 in a productive way.

One of the best ways is to buy shares of LIC itself. Yes, investing in the same company where you are a policyholder creates a perfect balance between expense and income.

2️⃣ Step 2 – Create a Circle of Financial Growth

Every time you pay a premium, you are spending money that increases LIC’s profits. So why not earn a part of those profits back? When you buy LIC shares, you become a part-owner of the company and get dividends every year.

If your premium is ₹700 per month, aim to earn at least ₹700 monthly as dividend income from LIC shares. This way, the company pays you back for being a loyal customer.

For example, if i already had 2 shares and bought 18 more using your survival benefit, you now have 20 shares. Over time, LIC’s dividends will help you cover future premiums without any burden from MY pocket.

1. Benefit from Both Dividend and Capital Growth

LIC is a strong and long-term company. As the share price increases, your investment also grows in value. If you ever need money to pay your next six-month premium, you can sell a small portion of your shares.

If the price falls, don’t panic — use it as an opportunity to buy more shares using SIP (Systematic Investment Plan) every month. This will help you reach your goal of earning ₹700 per month in dividends faster.

2. Convert Survival Benefit into Warren Buffett’s “Float”

Warren Buffett built his fortune using the insurance float concept — the money insurance companies hold temporarily before paying claims. He invested that “free money” in strong businesses, growing his wealth massively.

Your LIC money back works the same way. It’s not new income — it’s a temporary return of your own money. But if you treat it as investment capital, you create your personal float.

Your LIC money back or survival benefit should never sit idle as cash. By investing it back into LIC shares, you build a self-sustaining financial system where your expenses turn into income.

This strategy not only secures your insurance but also helps you achieve financial independence. So next time you receive your money back from LIC, remember — don’t just spend it, make it grow.

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