LIC’s new children money back plan (No.832)-Should you invest?
Few days back, LIC has introduced new children's money back plan Table no. 832. It is similar to the money back plan. I have received almost 25+ emails on this subject, whether this LIC new children money back plan is good or not. What are the features of this plan? Does death benefit and survival benefits secure your child's future with this new LIC money back insurance plan? Should you opt for LIC’s new children money back plan at all?
Features of LIC's new children money back plan
- This is Non linked money back plan which is aimed Savings cum protection plan.
- This plan is aimed to meet children education, marriage, etc.,
- Life risk in this child plan is a child and not the parents.
- Age of entry for child – Min 0 years and max 12 years.
- Age of proposer / Parent / Guardian- Min 18 years and max 55 years
- Term of insurance – 5 years to 20 years. However, children maximum age should be 25 by the time policy completes (e.g. If child age is 5, one can consider 20 year policy).
- Minimum Sum Assured – Rs 1 Lakh
- Max sum assured – No limit
- Premium waiver benefit rider available
- Loan facility available
Benefits of this new LIC children money back plan
a) Death Benefit
- If death occurs before commencement of risk, i.e. within 8 years of age, of kid, all premiums paid (excl taxes) would be payable.
- If death occurs after the commencement of risk, i.e. after 8 years of age, of kid, Sum Assured and vested Simple Reversionary Bonuses and Final Additional Bonus, if any, shall be payable.
- This death benefit shall not be less than 105% of the total premiums paid as of the date of death.
- If one opts for Premium waiver benefit rider and if a parent dies, kid will receive all survival benefits.
Sample illustration is shown below
b) Survival benefits
- Child completes 18 years – 20% of Basic Sum Assured is paid
- Child completes 20 years – Another 20% of Basic Sum Assured is paid
- Child completes 22 years – Another 20% of Basic Sum Assured is paid
c) Maturity Benefit
- Maturity (25 years of age) – 40% of Basic Sum Assured along with accrued bonus and final additional bonus (if any) would be paid.
Sample Illustration continued below
What is LIC’s Premium Waiver Benefit Rider applicable in this plan?
LIC’s Premium Waiver Benefit Rider is available as an optional rider on the life of proposer aged between ages 18 to 55 years by payment of additional premium. In case of death of the proposer, the premiums under the basic plan falling due after the date of death shall be waived. The cost of medical and special reports shall be borne by the proposer. This rider shall not operate in the event of death of the proposer by his own hands, whether sane or insane within 12 months from the date of issuance of First Premium receipt or within 12 months from the date of revival.
How are the premiums for this LIC new money back plan?
Following are some of the sample tabular premium rates (exclusive of service tax) per Rs. 1000/- Basic Sum Assured
Age (in years) Premium (Rs.)
You can download brochure of this new LIC money back plan can be downloaded here
Should you invest in LIC’s new money back plan?
Money back plans generally provide 5% to 7% returns along with risk coverage. Here parents are proposers and child’s life is covered. No parent wants to take an insurance plan for their kid and wait for kid’s death to claim the insurance money. I can simply say this is Stupid plan introduced by LIC. I have indicated some of the top children's investment plans to invest in India earlier which you can consider them. Just ignore this LIC new child money back plan.
Readers, what is your view on this LIC’s new child money back plan?
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LIC's new children money back plan (Table no. 832)