New Children’s Money Back Plan
LIC New Children Money Back Plan is a simple Money Back Traditional Plan with Bonus facility.
Eligibility Conditions – New Children’s Money Back Plan
It can be taken for any child between 0 to 12 years of age and can be continued till the child is 25 years old. In this plan, premium needs to be paid yearly, quarterly or monthly as chosen and needs to be paid for the entire policy tenure.
Death Benefit – New Children’s Money Back Plan
The risk on the child’s life starts on when he is 8 years old or after 2 years of the policy commencement date, whichever is earlier. So, in this plan, if the Life Insured dies within the policy tenure but before the Risk Commencement, the premium paid less tax is returned to the policyholder.
However, if the life insured dies after the risk commencement date, the Sum Assured on Death + accrued Simple Reversionary Bonus + Final Additional Bonus, if any would be payable to the Policyholder and the policy would be terminated.
The Sum Assured on Death has been defined as the higher of:
- 10 times the annualized premium or
- The Basic Sum Assured
Subject to a minimum of 105% of total premium paid till date
Survival and Maturity Benefit – New Children’s Money Back Plan
This policy pays 20% of the Basic Sum Assured when the child completes 18 years, 20 years and 22 years respectively as Survival Benefit and the remaining 40% of the Basic Sum Assured + accrued Bonuses would be payable at the end of the Policy Tenure as Maturity Benefit.
There is an option to defer the Survival Benefit in this plan for which an interest would be payable for the interim period.
Additional Rider Benefit – New Children’s Money Back Plan
This plan also offers and additional Premium Waiver Benefit option wherein if the Policyholder dies within the policy tenure, the future premiums would be waived but the policy continues to pay the Survival and Maturity Benefits as per schedule.
New Children’s Money Back Plan
Thus, this is a simple Money Back Plan which can be opted for the children with scheduled money back options at various milestones which can be planned ahead of time
LIC’s new policy called Children Money Back Policy is like a simple money back plan with pre-set intervals for the survival benefits to be paid but since it has been designed especially for the children, it has quite a few unique features only to suit the needs of parents with children.
This policy is a Traditional Money Back Plan with Profit, i.e. with Bonus facility. Thus in this plan, simple Reversionary Bonus + Final Addition Bonus, if any would be payable to the policy on Death of the Life Insured within the policy tenure or on Policy Maturity, whichever is earlier.
Survival Benefit under this plan is as under:
On completion of the Policy Tenure, i.e. when the child is 25 years of age, the remaining 40% of the Basic Sum Assured + accrued simple Reversionary Bonus + Final Addition Bonus, if any would be paid to the policyholder as Maturity Benefit and the policy would be terminated.
New Children’s Money Back Plan has Surrender options available after completion of 3 policy years. There is a Guaranteed Surrender Value available for this plan and even accrued Bonuses would be payable under certain circumstances.
Loan facility is also available in New Children’s Money Back Plan after completion of 3 policy years but provided the loan has to be taken for the child’s benefit only. Loan can be granted upto 90% of inforced plan and 80% of Paid Up Policies and the loan amount and interest payable would be recovered from the due Survival Benefits as per schedule.
The usual Tax Benefit is also available in New Children’s Money Back Plan wherein the premium payable is tax free under section 80C and the Maturity Benefit is tax free under section 10(10)D since the life coverage is 10 times of the annualized premium. These features along with the liquidity makes this plan quite a desired option for many.