LIC Children's Deferred Endowment Assurance Plan

About LIC’s Children's Deferred Endowment Assurance Plan

It is a deferred endowment child plan by LIC that enables parents to cover the lives of their children. This means that the child is the life assured and the parent is the proposer of the plan. The LIC CDA plan vesting occurs when the child turns 21 years of age. This is when the life cover starts and the child becomes the owner of the policy.

Key Features of the Children's Deferred Endowment Assurance Plan

• Premiums are payable Monthly, Quarterly, Half-yearly, or Yearly. 

• LIC adds a bonus to the sum assured on death and maturity based on its profits in a financial year.

• If the deferment stage is more than 10 years, medical tests are not required. 

• The policy can be surrendered after 3 years of premium payment. 

• The death benefit is not applicable if the child dies during the deferment stage. 

Eligibility Criteria

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Benefits of LIC’s Children's Deferred Endowment Assurance Plan

• Death Benefit - Sum assured on death plus bonuses is payable to the family of the child on his/her death. In case the parent dies, premiums are waived off, however, only if one has added the premium waiver option at the time of purchase.

• Maturity Benefit - The child receives the sum assured on maturity plus bonuses at the end of the policy term. 

• Rider Benefit - This is extra protection available at an additional premium amount. The riders available with the Children's Deferred Endowment Assurance Plan are Premium Waiver Benefit Rider and Accidental Benefit Rider. 

• Tax Benefit - The premium paid and the money received from the policy are eligible for tax benefits U/S 80C and 10(10D) of the Income Tax Act of 1961. 

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How Does Children's Deferred Endowment Assurance Plan Work?

LIC CDA endowment vesting at 21 plan works in two stages -

1. Deferment Stage - 

   • It starts from the date of policy purchase and lasts till the deferred date or till the child turns 21 years. 

   • This is the period when parents start paying premiums for the policy so that the child can benefit from the lump sum maturity proceeds.

   • If the child dies during this period, parents will receive a refund of the total premiums paid. 

2. Insurance Period - 

   • It starts from the deferred date and continues till the end of the policy term or maturity date. 

   • This is the period during which the child gets life insurance protection from LIC. 

   • If the child dies during this period, parents can claim the sum assured on death along with applicable bonuses. 

   • If the child survives, they will receive the sum assured on maturity along with accrued bonuses. 

Surrendering Children's Deferred Endowment Assurance Plan 

Surrendering this CDA vesting plan at 21 is only possible after paying premiums for 3 years regularly. You will not get the entire sum assured but LIC will pay you a reduced amount called the Guaranteed Surrender Value (GSV). Here are some conditions to surrendering LIC Children's Deferred Endowment Assurance Plan - 

• Policy surrender in stage I - LIC pays you 90% of all the premiums paid minus 1st year’s premium. 

• Policy surrender in stage II - GSV depends on the deferment period. 

• Less than 10 years - You get back 90% of premiums paid till the deferred date plus 30% of premiums that are paid after completion of the deferred date. This is excluding 1st year's premiums. 

• Greater than or Equal to 10 Years - You get 90% of the cash here plus 30 percent of the paid premiums that are paid after completion of the deferred date.