• Term Life
  • Investment

LIC New Children's Money Back Plan

LIC's New Children’s Money Back Plan is a non-linked participating money back plan from Life Insurance Corporation of India. The plan is specifically designed and customized to take care of higher educational, dream wedding and other needs of children through the Survival Benefits of the policy. In addition to this, the LIC new children money back plan provides for the risk cover on the life of a child during the policy term and for other benefits on surviving till the end of the specified policy duration.

Key features of LIC's New Children’s Money Back Plan

Maturity benefits of the planA maturity benefit will be equivalent to the sum assured on maturity and accrued bonuses (if any) payable
Premium payment frequencyMonthly, quarterly, half-yearly or Yearly
Cooling off period/Free lookThe policy comes with a freelook period of 15 days
Revival conditionsLapsed policies can be revived within the 2 years of the last premium due date as per the terms and conditions.
LoanLoan facility is available in this plan on the surrender value accumulated
Grace periodMonthly payment mode has a grace period of 15 days. The grace period is 30 days for rest of the payment modes i.e. quarterly, half-yearly and yearly
RebateRebate is provided on selecting high sum assured

Benefits of LIC's New Children’s Money Back Plan

  • Death benefit: If the policyholder dies within the duration of the policy before its maturity and the policy is in full force, then the death benefit will be payable. Thus, on the death of the life assured after the date of commencement of risk, the death benefit will be sum assured on death, plus vested simple reversionary bonus and a final additional bonus, if any, will be payable. The sum assured will be higher than 10 times of the yearly premium or equal to basic sum assured to be payable on death. The death benefit will not be lesser than 105% of the total premiums paid as on the date of the death of the life insured. The premiums mentioned will be an exclusion of rider premium, additional premium, and taxes.
  • Survival Benefit: If the life assured survives the policy anniversary and reaches the ages of 18 years, 20 years and 22 years, then 20% of the basic sum assured will be paid on each occasion provided the policy is in full force.
  • Maturity Benefit: If the life assured survives the specified date of maturity, then sum assured on maturity will be 40% of the basic sum assured along with vested Simple Reversionary Bonuses and final additional bonus, if any. The condition is the policy needs to be in full force.
  • Participation in Profits: As this is a participating plan, it is entitled to share the profits of the corporation as per the experience of the corporation. The bonus will be added to the policy when a claim is raised in the policy, either by death or maturity.
  • Optional Benefit: Option to defer the Survival Benefit(s): The policyholder has the option to defer the survival benefit at any time during or after the due date but during the currency of the policy. The benefit of deferment will result in the corporation paying an increased survival benefit to the policyholder as per the terms and conditions mentioned in the policy document. The policyholder will be required to give in writing 6 months before the due date of the maturity of policy/ survival benefits due date to the servicing branch of policy.

Product Specification of LIC's New Children’s Money Back Plan

Sum assured of the planMinimum - INR 1 lakh
Maximum – The plan does not have any upper limit
Coverage of the planMaturity benefit, Death benefit and survival benefit
Policy typeNon-linked participating money back plan
Policy basisIndividual basis
Plan term25 years less age of entry

Premium Details of LIC's New Children’s Money Back Plan

Customers who are going to purchase this policy will need to pay the premium for the entire policy term. The premium payment options are flexible with options to pay on a monthly, quarterly, half-yearly or yearly basis. There is no limit on the amount of the premium payable as it will be decided by the sum assured opted by the individual.

New Children Money Back Policy Details

Grace period - The policy has a grace period of 15 days for monthly premium paying mode, and 30 days for quarterly, half-yearly and yearly premium paying mode. All the benefits will be active in the policy during the grace period. If the individual fails to pay the policy premium during the grace period, then the policy will lapse.

Policy termination - The policy can be surrendered after completion of 3 years of the premium paying term. The surrender value will be a percentage of total premiums paid minus extra premium, rider premium and survival benefits already due or payable. The surrender value will depend on the policy year and term in which the policy is being surrendered.

Free Look period - If the individual or the policyholder is not happy with the terms and conditions of the policy, then he/she has the option to return the policy back to the corporation within a period of 15 days citing the reasons for cancellation. The corporation will cancel the policy and the refund the premium paid, after deducting the proportionate risk premium for the period on a cover and any other applicable charges like stamp duty.

Inclusion

Loan facility - A loan can be taken against the policy as per the surrender value accumulated in the policy. The loan is disbursed as per the terms and conditions which the corporation may specify from time to time.

Exclusions

Suicide clause - If the life assured whether sane or insane commits suicide within 12 months of the inception of the policy or from revival date, then no death benefit is payable. The insurance company will only refund 80% of the premiums paid back to the nominee. The clause is not valid if the age of entry of the life assured is below 8 years.

About riders

LIC’s Premium Waiver Benefit Rider - The LIC's New Children’s Money Back Plan comes with a very useful premium waiver rider which is available on offer for the life of proposer aged between 18 to 55 years. The rider can be attached to the base plan for an additional premium payable. If the proposer dies within the active policy term, then the future premiums under the basic plan will be waived off. The rider benefit will not be given if the proposer commits suicide within the 12 months of commencement of policy or from the revival date of the policy.

Tax Benefits - The premiums paid for the policy can be claimed for tax deduction under Section 80C of the Income Tax Act, 1961. Likewise, the claim amount received from the policy will get tax benefit under Section 10(10D) of the Income Tax Act, 1961.

Documents required for LIC's New Children’s Money Back Plan

  • Valid government ID proof like driving license, passport, aadhaar card, Pan card etc.
  • Age proof
  • Valid address proof like electricity bill, telephone bill , any utility bill
  • Medical history
  • Any KYC documents
  • Medical test if required
  • Any other document which the life insurer may ask for, depending on case to case basis

Eligibility conditions to buy LIC's New Children’s Money Back Plan

Minimum age for entry in policy for life assured0 (last birthday)
Maximum age for entry in policy for life assured12 (last birthday)
Minimum/maximum maturity age for life assured 25 (last birthday)

LIC's New Children’s Money Back Plan Example

Mr. and Mrs. Sharma, parents of 2-year-old Amit, want to understand how this plan works. The couple works as Directors of a company and are well to do, but they want to select an insurance plan to ensure that the financial needs of their child are met in the future. Mr and Mrs Sharma go for a basic sum assured equal to INR 15 lakh, paying a premium of INR 25,000 approximately per year for the same. Mr. Sharma pays this amount as per the policy schedule, ensuring that the plan does not lapse due to non-payment of the policy premium. As part of the benefits, Mr. Sharma receives 20% or Rs.3 lakhs when Amit reaches the age of 18 years. Amit will get additional survival benefits of Rs. 3 lakhs each when he turns 20 and 22 years. When Amit will be of 25 years of age, he will get a sum equivalent to the pending 40% of the sum assured, i.e., Rs.6 lakhs plus any additional benefits in the form of bonuses which have been accrued in the plan as it is a participating plan. If there is an unfortunate demise of Amit during the policy term, the death benefit will be payable to the parents i.e. Mr. and Mrs. Sharma. If the death occurs before the risk has commenced, then only the premiums will be returned to the parents. If the proposer of the policy that is the parents die during the active policy term and they had added the premium waiver rider, then all the future premiums in the policy will be waived off and Amit’s future will be secured. The policy will continue to be active and will pay off the benefits mentioned in the policy document.