LIC has recently come up with a New Children Money Back Plan, providing one more option among the many that are available in the market.
This plan is a non-linked money back plan, which would eventually enable to meet meet the child's multiple financial needs including education, marriage, further studies abroad etc.
The plan also has a survival benefit like most other plans from Life Insurance Corporation.
During the policy term, there is a risk cover on the life of child, which means that if anything were to happen to the child, the parent or the guardian would end up getting the money.
Another interesting feature of the plan is that it also covers risk for a periodic payment on surviving to the end of the specified duration.
LIC New Children Money Back Plan Table 832
|Children Min and Maximum age||0-12|
|Policy term||25 years minus age at entry|
|Minimum and Maximum maturity age||25 years|
|Minimum Basic Sum Assured||Rs 1,00,000|
|Maximum Basic Sum Assured||No Limit|
In event of death before the date of commencement of risk, an amount which is equal to the total amount including premium/s paid excluding taxes, extra premium and rider premium, will be payable.
If the event happens after the date of commencement of risk, death benefit, will be sum assured on death along with bonuses and final additional bonus.
This death benefit shall not be less than 105% of the total premiums paid as on date of death.
|When Child Complete 18 years||20% of Sum Assured|
|When Child Complete 20 years||20% of Sum Assured|
|When Child Complete 22 years||20% of Sum Assured|
|Maturity||40% of the Basic Sum Assured also bonus if any|
Premium waiver can be availed on payment of additional premium. If this rider is opted for, in case of death of the proposer, the payment of the premiums falling due after the date of death shall be waived
High Sum Assured Rebate
|Basic Sum Assured||Rebate|
|Rs 1,00,000 - 1,90,000||Nil|
|Rs 2,00,000-4,90,000||2 % thousand basic sum assured|
|Rs 5 00,000 & above||3 % per thousand of Basic Sum Assured|
|Modes of Premium Payment||All modes i.e. Yearly, Half-yearly, Quarterly and Monthly.|
A loan can also be availed, but that is applicable only after 3 full years of the payment of premiums.
Also, there has to be a declaration from the proposer to the effect that loan is raised for the benefit of the minor life assured. What this essentially means is that the amount has to be used for the benefit of the child.
Should You Buy The LIC New Children Money Back Plan?
The scheme is good for those looking at a predefined target to meet the needs of a child. The returns may not be better then bank interest rates but, it does provide some insurance benefit.
If you have a girl child's education a better prospect would be the Sukanya Samrudhi Yojana Account, where interest income is tax free and the current interest rate is a huge 9.1%.
It gives you tax benefits Under Sec 80C and also the interest income is free from tax.