LIC's New Children Money Back Plan

The future of the world depends on the strength of the children today. But if they are not prepared for that purpose, the dream will be unattainable. This is why there are certain premium policies available for children to secure their future on the whole. LIC's New Children Money Back Plan is especially known for its benefits for growing children. Two features why parents and grandparents choose this policy for their beloved children are- security given till 25 years and then offering maturity with a lump sum amount for fulfilling important tasks.

Eligibility for this policy: The minimum age for applying for this plan is right after birth and the maximum age of entry is 12 years. The maturity age is 25 years.

Features of this plan

There are certain features of this plan:

● This plan is a non-linked money back policy for growing children.
● Each plan can be subjected for one individual at one time.
● The policy term will be based on the maturity age (25 years) minus the entry age. For example, if the entry is age is 8 years, then the term will be 25 – 8 = 17 years.
● The maturity benefit will be the total sum of the base sum assured at the time of plan purchase, applicable bonuses with it.
● The premiums can be paid depending on various options available with plans. In this case, a person can pay the premiums monthly, quarterly, half-yearly and yearly.
● There is a special feature that lets the policyholder find loans from this plan.
● The delayed payments or grace period varies with frequencies of premium payments. If the person is paying monthly then the grace period is about 15 days and for other frequencies, it will be 30 days.
● The plan can be returned after purchase within 15 days from the purchase date.
● There is an opportunity of reviving of the policy within 2 years by clearing all unpaid premiums together.
● The basic sum assured ranges from a minimum of Rs 100000 to the maximum of no upper limit.
● There are specifically three main benefits found from this policy namely maturity benefit, death benefit and survival benefit.
● The chances of getting High sum assured Rebate are dependent on the mode of rebates. In the yearly mode, it will be 2% of the tabular premium and in the half-yearly mode, it will be 1% of the tabular premium. But for the quarterly and monthly mode, there are no rebates payable.
● If the premiums and all other subsequent payments are cleared for three years, then this plan offers Paid-up value. This policy then will not be considered as a void plan and will be reduced to certain plans as such:

1. "Death Paid-up Sum Assured" after the untimely death of the policy holder. The amount payable will be the total of premiums paid/ total number payable yet x Sum Assured on Death.
2. "Maturity Paid-up Sum Assured" after the maturity which will be (the total of premiums paid/ total amount payable) x (Sum Assured on Maturity + Total Survival Benefits payable under the rules and regulations of that policy) – Total amount of Survival Benefits already paid.

● The policy can be surrendered after completing three full year’s payment of premiums. In that case, the surrender value will be a total of percentage value of premiums paid till date which will be excluded from any extra premiums paid and premium rider values (if there is any) – survival benefits that are already due and still payable to the policyholder.
● The subscriber can actually choose an option called “Premium Waiver Benefit Rider”. This is when all premiums will be waived after the death of that subscriber or the person who pays the premiums.

Benefits of the plan

There are three main benefits attached with the plan:

1. Maturity benefit In this case total of sum assured after maturity will be paid with all bonuses added to the sum.

2. Death benefit:

If the policy holder dies untimely, then the sum payable will be the total of the sum assured at death and all bonuses added to it.

3. Survival benefit: This is when, after reaching a certain age the policyholder can receive an amount from the policy. That is 20% of the basic sum assured.

There are other benefits found in this policy as well:

● Corporation profits: In this case, the policyholder can participate in the profit earning opportunity given to them by the LIC and there they can also get bonuses out of it.
● Surrender amount: The surrender amount is assured from the date of purchasing this plan. But this will only be applicable if the premiums and all payments are cleared without any delays for 3 years.
● Rebates and discounts: LIC will provide rebates or discounts on any high premium values. This way the policyholder can save their money.

Essential documents required

● The policyholder has to fill in the application form or the proposal application form.
● The complete medical history of the policy name holder will be required.
● KYC documents are required with the current address proof.
● There might be some occasions when the policy holders are required to go through some medical examinations. But that depends on the sum assured and also the age of the child.

Exclusions under certain cases

There are some circumstances when the policy will not be cleared:

● If the policyholder commits suicide within 12 months from the date of commencement of risk, then LIC will only pay the 80% premium paid till date which will be excluded from extra premiums and also service taxes. This too will not be applicable if the entry age is below 8 years old.
● If the policyholder commits suicide within 12 months of the revival plan, then the Corporation will only pay an amount higher than 80% premium paid till date of death and survival value which will be excluded from any service taxes and extra premium paid till date.

This scheme will not be entertained in case of the age of the policy name holder is below 8 years old at the time of revival policy and also if the policy lapsed even without getting the paid up value.