LIC Child Future Plan – Review, Key Features & Benefits
- Archana Singh
- Sep 8, 2016
- 3 min read
Child plans were introduced by Life Insurance Corporation of India to meet the needs of the growing child. This policy can be taken by a parent or a Grand Parent for a child between the age of 0-12yrs.LIC Child plan was designed to help the parent in meeting the immediate and future needs of their children like education, marriage and other needs like school fees and other expenses through survival benefits. A risk cover is also provided for the life of an insured child during the policy term.
LIC Child Future Plan-Review
LIC Child Plan is a money back endowment policy which provides funds at regular intervals for professional or higher education in the form of 6 money back installments. Under this policy, the sum assured plus bonus is paid immediately to the nominee in case of death of the life insured. In case if the child outlives the entire tenure then he receives 115% of the sum assured. At maturity of policy, the child would receive 50% of sum assured along with bonus and final addition of bonus if any.
LIC of India provides a number of child future plans like LIC Jeevan Tarang, LIC Plan no 184 and LIC Jeevan Ankur, LIC Child Plan Komal Jeevan.
LIC Child Future Plan – Features
1. Risk Cover – This policy provides a risk cover on the life of a child not only during the term of the policy but also during the extended term of 7yrs after the maturity term.
2. Survival Benefit – in the case of life assured surviving the policy term a survival benefit of 25% and 10% of the sum assured is paid.
3. Maturity Benefit – In this plan the maturity benefit is 50% of the sum assured along with final addition and vested bonus if any.
4. Premium Waiver Benefit – benefit of premium waiver is also one of the key features of LIC Child plan.
5. No Loan facility is given under this policy.
6. Surrender of Policy – Surrender value will be paid if the premiums for 3yrs have been paid up.
7. Payment of premium stopped – when there is no premium paid the policy lapses. However, if at least 3 yrs premium have been paid, then the policy acquires a Paid up value and risk cover continues at a reduced sum assured.
LIC Child Plan – Eligibility
1. Entry Age – 0-12yrs
2. Maturity Age – 23-27yrs
3. Sum Assured – 1lakh to 1crore
4. Term of Policy – 11-27yrs
5. Premium payment term – 6 years to policy term minus 5yrs.
6. Mode of Payment – Quarterly, Half yearly, yearly & salary savings scheme.
LIC Child Plan –Benefits
1. Survival Benefit – If the life assured survives till the end of the specified duration, the payment is made as mentioned below –
• In the case of 5yrs before the date of expiry of the policy term, the life assured is paid 25% of the Sum Assured.
• Before 4yrs of the expiry of the policy term, the amount paid is 10% of the sum assured.
• 3yrs or 2yrs or a year before the expiry of the policy term 10% of the sum assured is paid.
2. Death Benefit –
• In case the child dies, the nominee of the plan will receive the sum assured plus vested bonus plus final addition bonus.
• If the child dies before risk commencement, then the nominee will receive all basic premiums paid till date plus 3% p.a. Interest compounded annually.
• If the death if during the extended term, then nominee is paid only the sum assured.
3. Maturity Benefit – On maturity, the insured gets 50% of the sum assured plus vested bonus plus final addition bonus.
4. Income Tax Benefit – Life Insurance premiums paid up to 1lakh are allowed for deduction from the taxable income every year under section 80C.
Thus, LIC Child plan is an attractive policy which provides funds at regular interval and helps in meeting the immediate and future needs with a risk cover on the life of the insured child during the policy term.
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