LIC Jeevan Tarun: A Money-Back Policy For Young Population, Children Plan

LIC's Jeevan Tarun money-back plan has been designed specifically to benefit the young population of India, meet the educational and other needs of growing children. They will be entitled to gain annual Survival Benefit payments from ages of 20 to 24 years, and the Maturity Benefits will be given at their age of 25 years. This article has discussed this money back plan by LIC, along with a benefit calculation, that you can have an approximate idea about how much will you benefit from a certain amount of investment.

Eligibility criteria and sum assured for LIC's Jeevan Tarun

To apply for the LIC's Jeevan Tarun, the Minimum Age at entry should be 90 days, and the Maximum Age at entry is 12 years, hence a parent can opt for this plan, on behalf of a child. The Minimum or Maximum Maturity Age 25 years. The Minimum Sum Assured is Rs. 75,000, and there is no limit Maximum Sum Assured. The Sum Assured shall be in multiples of Rs. 5,000 from Sum Assured Rs. 75,000 to Rs. 100,000 and Rs. 10,000 for Sum Assured above Rs. 100,000. The Policy Term for the LIC's Jeevan Tarun is 25, while the Premium Paying Term (PPT) is 20 years. This plan is a non-linked, life assurance savings plan for children, which will offer both protection and savings.

Maturity Benefits

Maturity benefits are quite lucrative for the LIC's Jeevan Tarun plan. It has been mentioned before, that the Maturity Age under the policy is 25 years. The "Sum Assured on Maturity" along with vested Simple Reversionary Bonuses (and Final Additional Bonus, if any) will be paid by LIC under maturity benefits to the policyholder. The Sum Assured for the maturity benefits varies upon the 4 different options. Under option 1 the maturity benefits will be 100% of the Sum Assured, under option 2 the maturity benefits will be 75% of the Sum Assured, under option 3 the maturity benefits will be 50% of the Sum Assured, and under option 4, the maturity benefits will be 25% of the Sum Assured.

There are also few settlement options for receiving the Maturity Benefit in installments. You can receive the benefits over the chosen period of 5 or 10 or 15 years, instead of lumpsum. One can exercise this option during the minority of the Life Assured or by Life Assured aged 18 years and above.

Death Benefits

On death before the date of commencement of risk, a refund of premium(s) paid excluding taxes, extra premium, and rider premium, if any, without the interest will be paid by LIC. Death Benefits, of LIC Jeevan Tarun, is the Sum Assured on Death. According to the corporation, the Sum Assured on Death is as Higher of 7 times of annualized premium or 125% of Sum Assured. This Death Benefit will not be less than 105% of the total premiums paid up to the date of death.

There is also an option for the policyholder's family to get death benefit in installments for 5 or 10 or 15 years instead of the lump sum. For a monthly period, it will be Rs. 5,000, for quarterly it will be Rs. 15,000, for half-yearly it will be Rs. 25,000, and for the yearly period it will be Rs. 50,000.

Survival Benefits

You can choose the proportion of Survival Benefits to be availed during the term of the policy in 4 options. Under Option 1, there is no survival benefit, and the Maturity Benefit is 100% of Sum Assured. Under Option 2, the Survival Benefit is 5% of Sum Assured every year for 5 years, and the Maturity Benefit is 75% of Sum Assured. Under Option 3, the Survival Benefit is 10% of Sum Assured every year for 5 years, and the Maturity Benefit is 50% of Sum Assured. Under Option 4, the Survival Benefit is 15% of Sum Assured every year for 5 years, and the Maturity Benefit is 25% of Sum Assured.

A fixed percentage of Sum Assured will be paid, on each policy, anniversary coinciding with or immediately following the completion of 20 years of age and thereafter on each of the next 4 policy anniversaries. As per LIC, these fixed percentages will depend on the options chosen.

Benefits calculations

As mentioned above, there are 4 available options for the plan. The below calculation has been done considering the entry age is 12 years, with option 2, where the Survival Benefit is 5% of Sum Assured every year for 5 years, and the Maturity Benefit is 75% of Sum Assured. With 12 years as the entry age, the policy term will be for 13 years, and the Premium paying term (PPT) will be 8 years. The money-back will be given for a total of 5 years.

Sum assured (INR)	Death benefits	Money back at 20-24 years	Bonus	Total approximate return
100000	125000	5000	45500	145500
500000	625000	25000	227500	727500

Calculated using the official 'all in one calc' mobile app.

Additionally, LIC said, a grace period of 30 days will be allowed under the plan, for payment of yearly or half-yearly, or quarterly premiums, and 15 days for monthly premiums from the date of the first unpaid premium.

(Also read: LIC Jeevan Lakshya For A Promising Future Of Your Child)