LIC New Children's Money Back Plan

After holding your child in your arms for the first time, you dream of his/her successful career: "My son/daughter will grow up to be an engineer/ doctor/ astronaut/ artist/ or whatever best you can aspire.” But have you ever wondered about the cost of making the dream come true after 20 years? Something really big that you need to start preparing for today. Investment is the best asset to achieve your goals in future, and when investment comes with the benefits of life insurance, you would never want to miss a chance.

Life Insurance Corporation of India has announced to launch New Children’s Money Back Plan in September 2023. It is specially designed to accomplish the dreams of your growing child, whether it is quality education, an established career, delightful marriage, or settling up their own business. But how? Reading this article will help you look into the LIC New Children’s Money Back Plan details, the working process, and the benefits available to create a financial corpus for your child’s future.

LIC New Children’s Money Back Plan is a Non-Linked, Participating, Individual, Life Assurance money-back plan ready to launch in September 2023. This insurance cum investment plan is specially designed to fulfil the financial needs of your child and secure a bright future. A parent or grandparent can buy this plan for their child between 0-12 years. Except for providing several survival benefits at different life stages of your child, New Children’s Money Back Plan offers a final maturity benefit when they turn 25. Also, the plan provides the risk cover on your child’s life within the policy term.

Below mentioned are the key highlights of the LIC New Children's Money Back Plan

• Policy Type

  Child Plan

• Proposer

  Parents or Grandparents

• Risk Cover

  On Child’s Life

• Entry Age

  0 Days - 12 Years

• Liquidity Facility

  Provided 2 Years’ Premium is Duly Paid

• Premium Payments

  Yearly/ Half-Yearly/ Quarterly/ Monthly

To buy LIC New Children's Money Back Plan for your child, you need to consider the following eligibility criteria:

• Sum Assured

  Rs. 1 Lakh - No Limit

• Policy Term

  [25 - Age at Entry] Years

• Maturity Age

  25 Years

• Policy Paying Term

  [25 - Age at Entry] Years

To prepare a financial cushion for your child’s future, the New Children’s Money Back Plan from LIC of India provides the following benefits

Death Benefit:If the life assured dies during the policy term and all the premiums are duly paid, a death benfit is offered under the following circumstances.

On Death Before the Date of Commencement of Risk: The total premium amount paid, after deducting taxes, extra premium, and rider premium, is payable to the beneficiary.
On Death After the Date of Commencement of Risk: The Death Benefit defined as Sum Assured on Death is paid along with Simple Reversionary Bonuses and a Final Additional Bonus (if any). Where the Sum Assured on Death is higher of

• Basic Sum Assured, or
• 7 times of Annualised Premium

Provided the Death Benefit is not less than 105% of the total premium paid upto date of death.

Survival Benefit: If the life assured survives the policy anniversaries falling on or after the completion of 18 years, 20 years, and 22 years, they receive an amount equal to 20% of the Basic Sum Assured.

Maturity Benefit:If the life assured survives the whole policy term, i.e., outlives the Maturity Age of 25 years, a Sum Assured on Maturity is provided along with vested Simple Reversionary Bonuses and a Final Additional Bonus (if any). The Sum Assured on Maturity is an amount equal to 40% of the Basic Sum Assured.

Participation in Profits :The policy participates in the profits of the corporation and receives Simple Reversionary Bonuses as per the experience of the corporation. A Final Additional Bonus may be declared in the year when the policy is eligible for a claim either by death or maturity. The LIC of India doesn’t offer a final additional bonus for a paid-up policy.

To understand the working process of LIC New Children’s Money Back Plan, let’s consider the example of Mr. & Mrs Verma, the responsible parent of Master Arnav. The couple is working and well paid off. From the birth of the child, they ensure that all the necessities are provided to the child and are planning to buy a Child Insurance Plan for a bright future. After going through multiple plans, they invested in LIC New Children’s Money Back Plan. They opt for a Basic Sum Assured of Rs. 1 Lakh and go through the premium chart available

Consider the following scenario to understand the benefits secured by Arnav clearly

• Age

  12 years

• Policy Term

  13 years

• Premium Paying Mode

  Yearly

• Sum Assured

  Rs. 1 Lakh

• Premium (Excluding Taxes)

  Rs. 9,202

The LIC of India pays the following benefits under different scenarios (the rider is not opted).

* All the data mentioned above are provided from official LIC sources.

Except for the innate benefits, LIC New Children’s Money Back Plan 832 offers some optional benefits to enhance flexibility. The optional benefits are mentioned below

With the appealing benefits mentioned above, several additional features of the plan enhance flexibility and make the plan a suitable buying option for your child. These additional features are mentioned as

The proposer can select the premium payments option at yearly, half-yearly, quarterly, and monthly (through NACH or salary deductions) modes over the premium paying term.

The plan offers a grace period to make the missed premium payments from the date of the first unpaid premium. The policy lapses if the premium is not paid within the grace period. The grace period for the Yearly/ Half-yearly/ Quarterly premium payment mode is 30 days, whereas 15 days for the Monthly mode.

You can revive a lapsed policy within a period of 5 following years from the date of the first unpaid premium. The policy shall be revived after paying all the outstanding premiums with interest. The revival of the riders (if any) is only considered along with the revival of the base policy and not in isolation.

The plan offers rebates to enhance the policy benefits in the following manner.

1. Rebates on Premium Payment Mode

   Mode of Premium Payment	Applicable Rebate
   Yearly	2% of Tabular Premium
   Half-yearly	1% of Tabular Premium
   Quarterly & Monthly	NIL

2. Rebates on High Sum Assured

   Sum Assured	Applicable Rebate
   Rs. 1,00,000 to Rs. 1,90,000	NIL
   Rs. 2,00,000 to Rs. 4,90,000	2 per thousand Sum Assured
   Rs. 5,00,000 and above	3 per thousand Sum Assured

If at least two full years’ premiums are duly paid, and subsequent premiums are not paid, the policy continues as a paid-up policy until the end of the term. Under a paid-up policy, the Sum Assured on Death reduces to a sum called Death Paid-up Sum Assured, and the Sum Assured on Maturity reduces to a sum called Maturity Paid-up Sum Assured.

If two years of premiums are duly paid, the policy can be surrendered anytime and acquires the surrender value. On surrender of the policy, the LIC of India is entitled to pay a surrender value equal to the higher Guaranteed Surrender Value or Special Surrender Value.

If the proposer has duly paid the premiums for at least two years, the policy is eligible to avail of the loan under the following conditions

 

Suppose the policyholder is not satisfied with the policy’s terms and conditions. In that case, they can return the policy to the corporation within 15 days from the date of receipt of the policy document. The policyholder needs to state the reasons for objections to receiving the policy. The corporation shall cancel the policy and return the amount of the premium deposited after deducting applicable charges.

The LIC New Children’s Money Back Plan provides tax exemption for the premium paid under Section 80C and on benefits received under Section 10D of the Income Tax Act, 1961.

If the Life Assured commits suicide, the policy turns void and is not eligible to receive any benefits under LIC New Children’s Money Back Plan as

• If the life assured commits suicide within 12 months from the date of commencement of risk, the corporation provides a claim amount of 80% of the total premium paid. Applicable only if the entry age of the life assured is above 8 years.
• If the life assured commits suicide within 12 months from the revival date, an amount higher of 80% of the total premium paid till the date of death or Surrender Value available as of the date of death. Applicable only if the age of life assured is above 8 years at the time of revival. Nothing is payable under a lapsed policy.

All set to launch in September 2023, the New Children’s Money Back Plan from Life Insurance Corporation of India is an ideal option to invest in for a financially secure future for your children. The attractive benefits and features ensure that you no longer have to worry about the financial security of your children, and they can accomplish their dreams without a single strain of stress. If you want more clarity on LIC Children Money Back Plan, visit the nearest LIC branch or connect with RenewBuy POSP advisors.