The New Children’s Money Back Plan from Life Insurance Corporation of India (LIC) is a non-linked, participating, money-back life insurance policy. The plan provides a risk cover for the child, during the policy tenure. In addition, the Survival Benefits payable by this plan are specifically designed to meet the needs and expenses of one’s children.
The policyholder can either claim the survival benefit on its actual due date or choose to take it on a later date, as per his/her requirements. The proposer can also opt to purchase LIC’s Premium Waiver Benefit Rider, which will be applicable on the life of the proposer. Tax benefits, as per prevailing Income Tax laws, can be claimed by the proposer or the policyholder.
Policyholders who would like to purchase this policy will have to ensure that they meet the eligibility criteria set by the insurer.
|Parameters||Criteria for eligibility|
|Minimum age at entry||0 Years|
|Maximum age at entry||12 Years|
|Maximum age at maturity||25 Years|
The sum assured is a guaranteed sum of money that will be paid by the insurer to the policyholder or the nominee, before the inclusion of any bonus. Policy buyers will have to opt for a preferred sum assured amount before the commencement of the risk cover, and the premiums payable will be linked to the sum assured.
|Minimum Sum Assured||Rs.1 lakh|
|Maximum Sum Assured||No limit|
The premium is a certain amount of money that a policyholder pays for the insurance policy in order to enjoy its coverage. For the New Children’s Money Back Plan, the premium payable will vary as per the sum assured, the policy tenure, the life assured’s age at entry, riders opted for, etc. Certain specifics related to your premium payment mode and policy tenure are listed in the table below.
|Policy Tenure||(25 – Life Assured’s Entry Age) years|
|Premium Payment Mode||
*Premiums vary based on age, location, plan term, GST, and other factors.
|Death Benefit||If the life assured passes away after the risk cover has commenced, a death benefit, which will include the Death Sum Assured, Final Additional Bonus, and Simple Reversionary Bonus, will be paid by the insurer.|
|Survival Benefit||If the policyholder survives the policy anniversaries immediately after he/she attains the ages of 18 years, 20 years, and 22 years, 20% of the sum assured will be paid as the survival benefit.|
|Maturity Benefit||If the life assured survives till maturity of the policy, he/she will be paid 40% of the sum assured amount, Final Additional Bonus, and the Simple Reversionary Bonus, as the maturity benefit.|
While purchasing this policy, the proposer can also opt to purchase LIC’s Premium Waiver Benefit Rider. This rider is taken on the proposer’s life by paying an extra premium. In case the proposer passes away during the tenure of the base policy, all premiums payable towards the base policy will be waived off.
The New Children’s Money Back Plan comes with a suicide exclusion. If the policyholder happens to succumb to an untimely death due to him/her committing suicide within 1 year of the commencement of the risk cover, the insurer will return 80% of the premiums paid. No other benefit shall be payable. If the policyholder commits suicide within 1 year of reviving or reinstating the policy, the insurer will return 80% of the total premiums paid till date or the surrender value of the policy, based on whichever is the higher of the two
|Cooling-Off/Free-Look Period||Policy buyers have 15 days from when they purchase the policy to return it if they don’t find the policy terms and conditions to be satisfactory.|
|Policy Loan||Once the plan has acquired a certain surrender value, one can avail a loan against the policy.|
|Surrender Value||Policyholders can surrender their policy if they have paid premiums for at least 3 policy years. The surrender benefit payable will be the Guaranteed Surrender Value or the Special Surrender Value, based on whichever is higher.|
|Paid-Up Value||If premiums for the first 3 years have been paid and the following premium payments have been missed, the policy will be converted into a paid-up policy.|
|Policy Revival||Lapsed policies can be revived within 2 years from the date of the first due unpaid premium. To revive the policy, due premiums need to be cleared with an interest.|
|Deferment of Survival Benefits||The life assured can opt to receive the survival benefit on the actual due date or on a later date that’s within the policy tenure.|
|Participation in Profits||Along with the death and maturity benefit, the policyholder is also eligible to receive the Simple Reversionary Bonus and the Final Additional Bonus, which are declared by the company.|
In addition to the policy benefits that one is entitled to receive, you can also save on tax if you purchase the New Children’s Money Back Policy. Tax benefits, as per Section 80C and Section 10(10D) of the Income Tax Act, can be claimed for the premium amount paid and the payouts received.
The New Children’s Money Back Plan from LIC is a smart option for individuals looking to safeguard the interests of their children, irrespective of what may or may not happen in the future. While rising costs and inflation are a concern for all, the guaranteed benefits payable under this policy can meet whatever financial needs one’s children might have once they grow up.
LIC is one of the most well-reputed life insurance firms in India. Through their years of experience in the life insurance market, they have over-time built a niche for themselves. The company has reported a high claim settlement ratio of 98.33% for FY15-16, which demonstrates how important customer satisfaction is for the insurer. The company also has a range of insurance products on offer, in order to cater to everybody’s needs.