LIC’s New Children’s Money Back Plan

LIC’s New Children’s Money Back Plan

LIC’s New Children’s Money Back Plan is a conventional money back plan that helps the parents and guardians in making a stronger and safer future for their child, even if they are no longer around. This plan is a combination of life cover and investment, as it takes care of the child’s growing financial needs when he grows up.

LIC’s New Children’s Money Back Plan is an excellent plan for the child. It not only helps the parent to create a corpus for the child but also provides liquidity during the tenure of the plan so as to meet interim financial requirements.

LIC’s New Children’s Money Back Plan – Key Features

The primary features of the pan are given as follow:

• This is a money back plan which can be purchased by a parent or a grandparent of a child from 0 to 12 years of age.
• This money back plan is a participating plan that comes with the option of a limited premium payment.
• The survival benefits are received at a share of 20% of the sum assured when the insured reached the age of 18, 20 and 22 years.
• If the policyholder wants to defer the survival benefits and receive them at a time he wants.
• After the competition of 18 years of age of the insured individual, the policy will be vested in his/her name.

LIC’s New Children’s Money Back Plan – Specifications

LIC’s New Children’s Money Back Plan-Benefits

There are many advantages to investing in LIC’s New Children’s Money Back Plan. Few of the many benefits are given below:

• Death Benefit
  If the insured individual dies within the policy tenure, the nominee would receive the death benefit and the policy would be terminated.

  There are 2 possibilities for payment of Death Benefit :

  1. Death of the Life Insured before the commencement of risk
     In case of death of the life insured before the life risk on the child’s life starts, Death Benefit = All premiums paid till date would be paid back, excluding taxes to the beneficiary and the policy terminates.
  2. Death of the Life Insured after the commencement of risk
     In case of death of the life insured after the life risk on the child’s life starts, Death Benefit would be paid to the beneficiary and the policy terminates.

  Death Benefit = Sum Assured on Death + accrued Simple Reversionary Bonus + Final Additional Bonus if any.

  Sum Assured on Death is the higher of :

  • 10 X the Annualised Premium
  • Basic Sum Assured of the policy

  Subject to a minimum of 105% of the premiums that have been paid.

• Survival Benefits
  Survival Benefits would be paid to the policyholder on survival on the pre-defined schedule.

  Schedule for Survival Benefit	Survival Benefit paid
  On the policy anniversary after the 18th birthday of the life insured	20% of the Sum Assured
  On the policy anniversary after the 20th birthday of the life insured	20% of the Sum Assured
  On the policy anniversary after the 22nd birthday of the life insured	20% of the Sum Assured
  Maturity Benefit at the end of the policy tenure	The remaining 40% of the Sum Assured is paid along with Simple Reversionary Bonus and Final Additional Bonus

• Maturity Benefit

  Maturity Benefit is paid to the policyholder when he outlives the entire policy tenure.

  Maturity Benefit = The remaining 40% of the Sum Assured is paid + accrued Simple Reversionary Bonus and Final Additional Bonus.

• Rider Benefit

  LIC’s New Children’s Money Back Plan also offers LIC’s Premier Waiver Benefit Rider. The Rider is available for the proposer who is between the age group of 18-55 years.

  Like other add-on Riders, LIC’s New Children’s Money Back Plan can either be purchased at the time of inception of the plan or it may be added on a policy anniversary while the policy is active.

  Rider Benefits
  Under the Premium Waiver benefit Rider, if the proposer dies within the policy tenure, the premiums due after the date of death till the end of the policy tenure would be waived off but the policy would continue to pay the benefits as per schedule.

Sample Premium LIC’s New Children’s Money Back Plan Premium Details

Here are the details of the premium amount for the following particulars

Sample premium rates

Rebates and Discounts: This policy offers a rebate in premium for Annual and Semi-Annual modes and a discount in premium for high sum assured.

Mode Rebate

High Sum Assured Discount

Premium Calculation

So, the premium for a 5-year-old child can be calculated as

Participation in Profits

If the policy is active, it may participate in the profits of LIC conferring to the provisions made in Section 28 of the LIC Act 1956. The policy would eligible for Simple Reversionary bonus at a rate that is specified by LIC depending on its experience.

Other Important Features of LIC’s New Children’s Money Back Plan

Non-Forfeiture Regulations
If at least 3 years’ are paid and the policy lapses, then the regular benefits under this policy also cease and the policy gets converted to a paid-u policy. However, the death benefit continues with reduced paid-up policy coverage. This amount would depend on the number of premiums that have been paid. The accrued bonuses are also not forfeited.
If, however, the first 3 years’ premiums are not duly paid, then the policy does not accrue any paid-up value and thus lapses after the end of the grace period!

Surrender Benefit:
The policy has a Guaranteed Surrender Value when at least 3 years’ annual premium has been duly paid and the policy gets a paid-up value.
Guaranteed Surrender Value = % of Total Premium Paid till the date of Surrender

Deferring the Survival Benefits
The policyholder has the freedom to decide whether he wishes to receive the survival benefit at the time it is due or after the due date, but while the policy is in force. He may also defer the survival benefits that are due. In that case, LIC will then pay him a Survival Benefit that includes Survival benefits, sum assured and factors that are applicable.

Revival Of Lapsed Policy
Non-payment of premium can lead to a lapsed insurance policy. If the due payment is not paid even during the grace period then the policy will lapse. However, LIC provides the policyholder with an option to receive the policy during its lifetime but within 2 subsequent years from the first unpaid premium date. The right to accept the original terms of the policy remain with LIC.

Policy Loan
After paying the due premiums for three full years, the policyholder is eligible to ask for a loan against the surrender value of his policy.

Fee-Look Period
During the 15 day free-look period, if the policyholder is not completely satisfied with the policy that he has purchased, he can return it to LIC. The cancellation, when requested with 15 days of purchase, is carried out by LIC and the premium that has been paid is returned.

How the LIC’s New Children’s Money Back Plan Works?

Let us assume, Mr and Mrs Kumar buy LIC’s New Children’s Money Back Plan for their 10-year old daughter, Sheena.

Survival Benefit schedule

FAQ’s