Many people are aware of the life insurance policies offered by various companies in India. These insurance policies are offered by government and private players. Insurance policies help the individuals to financially secure themselves as well as their family members whenever kind of an unforeseen casualties strikes the family. One such kind of an insurance policy which promises to offer benefit to the insured for an extended period of time post maturity of the policy is the LIC Child Future Plan.
The concept of child insurance, after the birth of the little one is prevailing in India for many decades. All the parents across the globe want to give their best for their respective children in terms of food, education, safety, shelter and the list goes on. Child insurance benefits the child as the maturity amount will be received when the child attains majority and the same can be used either for higher educational purpose or for marriage. Apart from this, it promises to provide financial security to the child in case of death of either of the parent or both the parents.
Let's take a sneak peek into the LIC Child Future Plan and learn more about its features, benefits and so on.
What is a Child Insurance?
Insurance is a means of protecting against financial loss. It is a kind of risk management which is used as a hedge against the risk of a contingent or any kind uncertain loss in the future. The entity which provides insurance is called as an insurer. The person or an entity who buys the insurance is known as a policyholder or insured.
The Child Insurance is a form of permanent life insurance that insures the life of a minor child. It is purchased with a sole intention to secure the life of the child against all the sudden and unexpected future events.
What is Premium?
The amount of money charged by the insurer for the coverage of the set forth as per the insurance policy from the insured constitutes premium of the policy.
What is LIC Child Future Plan?
The LIC Child Future Plan is a kind of money back endowment plan which is designed specially to benefit a child in such a way that the sum assured and the bonus amount is immediately paid to the nominee in case of the death of the life insured.
The plan is drafted to meet the rising educational, marriage and other expenses of the growing children. The plan promises to provide the risk coverage on the life of the child not only till the duration of the policy but the coverage extends for a period of seven years after the expiry of the policy term.
The LIC will be entitled to pay a number of survival benefits to the surviving child till the end of the specified duration, that is if the child outlives the policy tenure, then the child will be entitled to receive 115% of the sum assured. The child will further receive 25% of the sum assured 5 years before the date of expiry of the policy term and lastly the surviving child will be eligible to receive 10% of the sum assured during the last 4 years, 3 years, 2 years and 1 year before the final maturity of the child insurance policy. And finally, when the policy matures, the child will receive the 50% of the sum assured along with the accumulated vested bonus and final additional bonus, if any.
Features of LIC Child Future Plan
The following are the features of LIC Child Future Plan
• The plan provides risk cover to the child not only during the tenure of the policy but also during the extended term of 7 years post maturity of the policy.
• Get additional rider of premium waiver benefit.
• The survival benefit is 25% and 10% of the sum assured will be paid if the child survives during the tenure of the policy.
• Ge maturity benefit of 50% of the sum assured plus vested bonus and final additional bonus, if any declared, postmaturity of the policy.
Benefits of LIC Child Future Plan
The following are the benefits of the LIC Child Future Plan
• Income Tax Benefit - Life insurance premium amount paid up to Rs 1,00,000 per annum is eligible for deduction under Section 80C of the Income Tax Act of 1964.
• Death Benefit - In case of the death of the child after the commencement of risk then the nominee will be entitled to receive the sum assured, vested bonus and final additional bonus.
In case if the insured dies before the commencement of risk, then the nominee is entitled to receive all the basis premium amount paid till date + 3% per annum compounded interest.
In case of death during the extended term, then the nominee is entitled to receive only the sum assured.
Date of commencement of risk:If the age of the life assured (child) is up to 10 years, then risk shall commence either after 2 years from the starting date of the policy term or from the policy anniversary corresponding with or immediately following the completion of 5 years of age of life assured whichever is later. In other cases, the risk will start from the policy anniversary date corresponding with or next following the 12th birthday of the child.
• Survival Benefit - If the life assured survives till the end of the tenure of the policy then the LIC will be entitled to pay the amount specified below:
|Expiry of Policy Term||Sum Assured|
|5 years before the date of expiry of policy term||25% of the Sum Assured|
|4 years before the date of expiry of policy term||10% of the Sum Assured|
|3 years before the date of expiry of policy term||10% of the Sum Assured|
|2 years before the date of expiry of policy term||10% of the Sum Assured|
|1 years before the date of expiry of policy term||10% of the Sum Assured|
|On the date of expiry of policy term||50% of the Sum Assured along with vested Simple Reversionary Bonuses and Final (Additional) Bonus, if any.|
• Maturity Benefit – During maturity, the life insured (child) will be eligible to get 50% of the sum assured + vested bonus amount + final additional bonus if any.
• Auto Cover – During the period of auto cover, one or more installments of premiums with interest can be paid without submission of evidence of health. If any subsequent premium amount is not duly paid post two years of payment of premiums, then the death cover on the life assured will continue for a period of two years from the due date of the First Unpaid Premium (FUP) period.
• Premium Waiver Benefit – The proposer can opt for this benefit if they are in the age range of 18-55 years and are medically fit. This option provides a waiver of premiums in the event of the death of the proposer. The benefits will remain in force during the auto cover period and any unpaid premium amount and not paid during the tenure of the auto cover period will be waived off. This benefit will not be applicable in the event of suicide by the proposer within a period of one year of the purchase of the policy.
• Options - The proposer can choose for Sum Assured (S.A.), Mode of Premium Payment, Maturity Age, Premium Waiver Benefit, Policy Term at the time of filling up the application form.
Eligibility Criteria for LIC Child Future Plan
|Entry Age||0 years (last birthday)||12 years (last birthday)|
|Maturity Age||23 years (last birthday)||27 years (last birthday)|
|Sum Assured||Rs. 1,00,000||Rs. 100,00,000|
|Policy Term||11 years||27 years|
|Premium Paying term||6 years||Policy term less 5 years|
Premium Payment Mode
The insurer can pay the premiums in any of the following modes, as per their convenience.
• Half -Yearly
• Through Salary Deductions over the tenure of the policy.
• Premiums can also be paid either for 6 years or up to 5 years before the policy term.
Note: Single Premium Payment mode is not available for LIC Child Future Plan.
The premiums can be either paid directly to the respective LIC branch offices where the policy is opened or it can be paid through bank accounts through NEFT or even through net banking or phone-banking.
Benefits of paying premiums through net banking or phone banking:
• Can save time for making the payment instantly.
• Need not have to wait in queues to make payment.
• Payment can be made within the comfort of home or office and one can avoid a personal visit to the branch.
• The policyholder can pay anytime in a day 24X7 from anywhere and anytime access to the internet.
• Payment instructions can be given by comfortably sitting at home or office premises and one can avoid personal visit to the LIC branch.
• One can save time by not waiting in queues for paying the premium amount.
• Avail free service from LIC as there is no charges to LIC or its authorized agents by using the facilities.
• One has the privilege to decide the date in advance on which the account has to be debited as per the convenience of the policyholder.
The following documents are required to be submitted along with the duly filled in application form bearing the signature of the policyholder at the time of proposal of LIC Child Future Plan:
• Child's Birth Certificate (if age is below 5 years) or School ID Card (if age is above 5 years).
• Policy Holder's Address Proof
• Policy Holder's age proof with relevant identity card
• Income Proof (previous 3 months salary slip, previous 3 years ITR/Form 16)
• Policy Holder's and child's passport size photos
What is Grace Period?
Under the LIC Child Future Plan, a grace period is one calendar month but not less than 30 days will be allowed to the insured for the payment of the premium amount.
How to revive the policy?
In case of the lapse of the policy, the same can be revived by paying the arrears of premium along with interest charges within a period of five years, subject to the submission of satisfactory evidence of continued insurability. The applicable rate of interest is fixed by the corporation from time to time.
What is cooling off period under LIC Child Future Plan?
If the policyholder is not satisfied with the terms and conditions of the policy then they can return the policy to the LIC within a period of 15 days from the date of purchase of the policy.
Is there any loan facility available under LIC Child Future Plan?
No, any kind of loan facility be it a housing loan facility or loan against LIC Child future plan is not available under the LIC Child Future Plan to the policyholder.
Can a policyholder Surrender the Policy? What is the Surrender Value?
Yes, the policyholder can surrender the policy in return for cash after completing at least three years of paying premiums. The guaranteed surrender value will be as mentioned below:
Before the commencement of risk
The policyholder will get 90% of the total amount of premiums (excluding the first year premium) paid.
After the commencement of the risk
The policyholder will get 90% of the total amount of premiums (excluding the 1st year premium) paid before commencement of the risk and will also earn 30% of the premiums paid on and after the commencement of risk.