Why Should You Invest in LIC’s New Children Money Back Plan?

By carefully planning the tenure of the policy, you will easily be able to arrange money for their marriage and other important stages in their life. The policy also provides health cover for your kids by choosing this policy. Let us look into the amazing features of this policy.

Basic Overview of New Children’s Money Back Policy

• The basic sum assured has a minimum cap of Rs. 1,00,000/- (One Lakh Rupees)
• There is no upper limit on this sum assured and you can increase the value in multiples of Rs 10,000/-
• The minimum age for entry is 0 (zero) years. Thus, you can buy the child policy even for your newborn child.
• The maximum age for entry is 12 years.
• The maximum tenure of the policy is 25 years and your policy tenure depends on the age of your child when you buy the policy.
• It offers different payment modes and you can choose monthly, quarterly, half-yearly, or annual premium payment options, according to your convenience.
• The coverage of the policy includes survival benefits, benefits on the maturity of the policy, and even death benefits.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

1. When Does the Risk Cover Begin Under This Plan? 

   If your child is more than 8 years old when buying the policy, the risk cover will begin immediately. However, if the child is less than 8 years, you need to wait for nearly 2 years from the commencement of policy to get the risk cover. The risk cover will begin a year after the commencement of policy if the child has completed 8 years by that time.

2. Flexible Options to Pay Premium and Sample Rates

   You can choose any mode of payment at your convenience. There are options to pay the premium monthly, quarterly, half-yearly, and even annually. If you own a business, you can choose to pay the premium annually so that you will not have a monthly commitment. On the other hand, if you are a salaried person, you can choose a monthly premium as this can become part of your savings plan. You can choose to pay the premium through Electronic Clearing Service or Salary Savings Scheme mode, according to your convenience.

   The rates for the premium depend on the age of the child for whom the insurance policy is taken and it increases as the entry age increases.

   • If you begin the policy within one year after the child is born, you will be paying the least premium at the rate of Rs. 44 (approximately) per Rs. 1,000 sum assured.
   • For children under the age of 5, the premium rate is Rs. 57 per Rs. 1,000 sum assured.
   • The premium increases when you take the policy at a later stage and you need to pay Rs. 80 premiums for Rs. 1,000 sum assured when your child is below the age of 10 at the entry stage.
   • For children aged under 12 years, the rate is nearly Rs. 93 per Rs. 1,000 sum assured.

   When you take a look at the above rates, you can clearly note that the rates increase a lot when you enter the policy at a later stage. For this reason, you should make it a point to begin saving at an early stage and get the best premium rates from the company. Keep in mind that the premium rates mentioned are approximate and they do not include service tax.

Rebates Available Under This Plan

You will be glad to know that you can even get some rebates when you choose some mode of payment and these are also applicable for high-value sum assured policies.

• The rebates for an annual mode of premium payment are at 2% of the premium amount.
• When you choose the half-yearly mode, you will get a discount of 1% on the premium amount.
• There are no rebates for quarterly and monthly payment modes.
• In the same way, for policies with less than 2 lakh sum assured plans, there are no rebates.
• For plans of less than 5 lakhs and more than 2 lakhs, you can get Rs. 2 for every Rs. 1,000 of the sum assured.
• For policies of sum assured more than 5 lakhs, the rebate is calculated at Rs. 3 per Rs. 1,000 of the sum assured.

1. Grace period and Revival Options

   It is not possible to pay the premium on time on a regular basis. In some cases, there may be a slight delay due to unforeseen circumstances. There is no need to worry about this aspect as the company provides a grace period for the payment of the premium amount. In the same manner, it is also possible to revive the policy if it has lapsed due to the non-payment of the premium amount.

   • The grace period for the monthly premium payment mode is 15 days.
   • The grace period for annual, half-yearly, and quarterly premium plans is 30 days.
   • If the policy has still not reached the maturity date, you can revive it even if it has lapsed.
   • You can revive the plan within 2 years from the date of payment of the last premium.
   • However, you need to pay the pending premiums along with the interest set by the company to revive the policy.

2. Paid-up and Surrender Value

   There is no risk of the policy becoming void if you have paid the premium for the entirety of two years. It acquires the status of a paid-up policy and the value will be determined depending on the sum assured and the number of premiums paid along with the pending premiums.

   For some reason, if you are not able to continue with the policy, you can even surrender it and get your savings back. However, the policy needs to have completed three full years with regular premium payments to avail of this option. There will be some service tax deduction along with a few other deductions before the savings are paid back to you.

3. Is It Possible to Avail Loan On the Policy?

   A loan can be availed only after 2 successful years of complete premium payment. It also depends on the terms and conditions of the corporation that changes from time to time.

   The Maximum loan that can be availed are as follows:

   • 90% for policy in force
   • 80% for paid-up policy

4. Tax Benefits of availing Children’s Money Back Policy from LIC

   • Under section 80C, you can get tax benefits on the premium amount paid for the policy.
   • Under section 10(10D), it is possible to get tax benefits on the amount received as death benefits.
   • Under section 10(10D), you can get tax benefits on the total maturity amount and survival benefits.

What is the cooling-off period in this policy? 

If you are not completely satisfied with the terms and conditions mentioned in the policy, you even have the option of returning the policy within 15 days after the commencement of the policy. After you clearly mention the reason for rejecting the policy, the company will deduct some amount and pay back the premium amount to you.

Benefits of LIC Children’s Money Back Policy

There are different benefits of availing of this policy for your children. Let us look into each one of them in detail.

1. Survival Benefits for the policyholder

   If the child has survived throughout the tenure of the policy, you can get 20% of the sum assured after the child completes the age of 18. In the same way, 20% of the basic sum assured will be given on the occasion of completion of 20 years and 22 years as long as the policy is active.

2. Maturity Benefits

   At the time of the policy’s maturity, the remaining 40% of the basic sum assured along with bonuses will be paid to the insured.

3. Death Benefit

   • If the policyholder dies before the commencement of risk cover, the entire premium paid along with other benefits will be paid back to the beneficiary.
   • If the policyholder dies after the commencement of risk cover, the whole sum assured with other bonuses will be paid to the beneficiary.

4. Bonus

   The company also gives a bonus on the sum assured amount as long as the policy is active. It is given at the maturity of the policy or when the person dies after commencement of risk cover.

   *All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Important Note About the Policy

You must understand that you can take this policy as a parent or grandparent for your child. In this case, the benefits will be paid only on the death of the child and this does not protect the future of the children if the proposer dies before the completion of the policy. In order to secure this aspect, you can choose the Premium Waiver Benefit Rider option and this gives complete protection even for the children. In this scenario, if the proposer dies during the tenure of the policy, there is no need to pay further premiums and the child will get all the benefits upon maturity of the policy.

This is the complete overview of the Children’s Money Back Policy from the LIC of India. You can get in touch with your insurance advisor and fill up the application form to get the policy. You may also need to undergo medical tests as per the guidelines of the company.

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