Should you invest in LIC Jeevan Tarun Insurance Plan for Children?

LIC Jeevan Tarun Insurance Plan for childrenShould you invest in LIC Jeevan Tarun Insurance Plan for Children?


Few days back, LIC has introduced one more children money back plan Table no. 834 called LIC Jeevan Tarun Insurance Plan. It is similar to earlier money back policy. This LIC Jeevan Tarun Insurance Policy is non linked with a profit plan offering 4 options to plan for children's education and other requirements. In this article, I would review this new LIC Jeevan Tarun Life Insurance Plan. What are the features of this plan? Does death benefit and survival benefits secure your child's future with this new Jeevan Tarun Insurance Plan of LIC? Should you invest LIC’s Jeevan Tarun Policy Insurance Plan?

Features of LIC Jeevan Tarun Insurance Plan


  • Non linked endowment insurance plan.
  • Savings cum protection plan.
  • LIC indicates that this plan is aimed to meet children education, marriage, other needs etc.,
  • Age of entry for child – Min 90 days and max 12 years.
  • Term of insurance – 25 years from age entry. Means you can take maximum period where your child attains 25 years of age.
  • Minimum Sum Assured – Rs 75,000
  • Max sum assured – No limit
  • Limited premium payment options available.
  • Premium waiver benefit rider available
  • Loan facility available

Also Read: What are the Best Child Investment Plans to invest in India?

Benefits of this LIC Jeevan Tarun Insurance Plan


Death Benefit


  • If death occurs before commencement of risk, i.e. within 8 years of age, of kid or within 2 years from the date of policy, 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 or after 2 years from the date of policy, Sum Assured + Bonus + 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 / maturity benefits.

Survival and Maturity benefits


There are 4 options available on survival and at maturity.

  • Option 1 – At maturity, 100% of Sum Assured + Bonus + Final additional bonus would be paid. No survival benefit.
  • Option 2 – At maturity, 75% of Sum Assured + Bonus + Final additional bonus would be paid. In addition, as survival benefit, 5% of Sum Assured would be paid every year for 5 years.
  • Option 3 – At maturity, 50% of Sum Assured + Bonus + Final additional bonus would be paid. In addition, as survival benefit, 10% of Sum Assured would be paid every year for 5 years.
  • Option 4 – At maturity, 25% of Sum Assured + Bonus + Final additional bonus would be paid. In addition, as survival benefit, 15% of Sum Assured would be paid every year for 5 years.

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.

How are the premiums for this LIC Jeevan Tarun Insurance plan?


Premium charts are not yet available now. However, if you see earlier children money back plan launched in Mar-15, following are some of the sample tabular premium rates (exclusive of service tax) per Rs. 1000/- Basic Sum Assured. We expect that it would not be different from them.

Also Read: Which are the best investment plans to make Rs 1 Crore?

Age (in years) Premium (Rs.)

0                   44.15

5                  57.00

10                80.60

12                93.90

Should you invest in LIC’s Jeevan Tarun Insurance plan?


As indicated in my earlier reviews, money back plans of LIC generally provide 5% to 7% returns along with risk coverage. Inflation is between 5% to 7 and education inflation cost is over 10%. Hence investing in such plans would not beat your education inflation costs. If you do not believe in equity investments, you can simply consider such plans. Choose option no. 1 where you would get a lump sum at maturity and you can invest them in a simple FD and get higher returns. Alternatively, you can consider the term insurance plan and invest the balance in Sukanya Samriddhi Yojana Scheme (if you have girl child) or invest in top mutual funds and redeem them and use for your child education needs. You can read my recommendations on some of the top children's investment plans to invest in India posted earlier.

Readers, what is your view on this LIC’s new Jeevan Tarun Plan for children?

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Suresh
Should you invest in LIC Jeevan Tarun Insurance Plan for Children

Suresh KP

14 comments

  • ramakrishna

    can a lic agent take up other insurance companies agencies, plz clarify, if yes what is the procedure

  • Bhanu

    good job, suresh.

  • Debasis Sil

    A good analysis of the plan but I believe that one part of the product has not been looked upon.

    A term plan will give a lump sum immediately in case of death but it will not be adequate when the child will actually need the money, as any lump sum the family receives will be spent on the upbringing of the child. So Term plans are good for lumpsum payments but this plan is not for lumpsum payment . It has some specific need fulfilment.

    This plan will take care of the child’s need for higher education and future planning at the stipulated age, even if the proposer dies. In this plan, the child need not bear any future premium if, unfortunately the parent dies.

    It is much like your mutual funds SIP s or Recurring deposits in banks will continue to run even if the parent dies and the returns will be made available at the stipulated age. As this is not going to happen , so this plan cannot be an alternative to Term plan and mutual funds or Recurring Deposits in banks.

    Alternatively, you can take a term plan and invest in this plan with premium waiver benefit, so in case of unfortunate death, lump sum takes care of the child’s growing age and immediate family contingencies and the child plan takes care of regular return at the childs stipulated age, as planned by you, without paying anything.

    Debasis Sil
    Financial Architect,
    MDRT, USA

  • ratilal j. shethia

    really goog article

  • Satyanarayan Vishwaroop

    Very nice article. Very helpful for investors.

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