LIC Child Plans: Types, Features and Benefits

Every parent strives to secure their child's future, including their higher education. Saving for this purpose is essential, but what happens in case of a parent’s untimely demise? In such situations, LIC child plans, also known as child future plans, come to the rescue. 

Established in 1956, LIC is India's oldest life insurance company and offers a range of plans, including child insurance plans, to help parents create a secure financial foundation for their children.

What are LIC Child Plans?

Life Insurance Corporation (LIC) of India offers specialised child plans tailored to suit the financial needs of children and their future goals. These plans provide financial protection, savings and investment opportunities for children's education, marriage or other milestones. 

These plans offer either a lump sum or regular payouts, helping parents pool funds for their child's future expenses. In the event of the death of the policyholder during the life of the policy, these plans provide financial security for the child through death benefits. 

Some of the LIC child plans include the LIC New Children’s Money Back Plan and LIC Jeevan Tarun Plan. Let's take a closer look at these policies, including their features and benefits.

What are the Different Types of LIC Child Plans?

Here are the top 2 LIC Child Plans for your children’s secured future: 

1. LIC Jeevan Tarun Plan 

Jeevan Tarun Plan is a unique insurance and savings option tailored for children, providing financial security and growth. It meets the evolving needs of children as they grow. The plan provides an annual survivor benefit from age 20 to 24, and the maturity of this scheme is at age 25. 

These critical years often involve higher education, which requires funds for various purposes such as course fees and hostel expenses. Policyholders can choose a percentage of the sum assured as an annual survivor benefit paid from the policy anniversary year. 

2. LIC New Children’s Money Back Plan

LIC's New Children's Money Back Plan caters to your child's future financial requirements, including higher education and marriage. It offers lifetime coverage for your child throughout the policy term and provides survival benefits at the age of 18, 20 and 22, which is equivalent to 20% of the sum assured. 

After surviving the policy term, the maturity benefit includes 40% of the sum assured and reverse and final bonuses, if applicable. This participation insurance contributes to the financial security of your child. 

In addition, optional additional insurance is available to increase the total sum insured. Parents or grandparents of children between the ages of 0 to 12 years can opt for this plan.

Benefits of LIC Child Plans

Each of these LIC child plans comes with distinguishing features and benefits. Here is how each of them can benefit your child’s present and future: 

1. LIC Jeevan Tarun Plan 

• Death benefit: If the policyholder dies during the policy term, the nominee will receive the higher of 125% of the sum assured, 7 times the annual premium or a minimum of 105% of the total premium paid, along with any bonuses.
• Survival benefit: If the policyholder reaches 20 years, a certain percentage of the sum assured is given as survival benefit for the next 4 years of the policy term.
• Maturity benefit: If the policyholder survives the entire policy term, the remaining amount of the basic sum assured plus accrued bonuses is paid as a maturity benefit.

2. LIC New Children’s Money Back Plan

• Death benefits: If the life insured passes away during the life of the policy, the benefits are as follows:
  • Termination before the start date of the risk: A refund of the premium will be paid (excluding extra premium, excess insurance and taxes, if any).
  • Termination after the commencement date of risk: The sum assured will be paid on death, along with the final additional bonus awarded and the simple surrender bonus (if any). The sum insured in case of death is higher than the basic sum assured, 7 times the annual premium, or a minimum of 105% of the total premium paid.
• Survival benefits: If the insured survives to the age of 18, 20 or 20 years, 20% of the basic sum assured will be paid on each occasion.
• Maturity benefits: 40% of the principal sum assured will be paid on survival to the maturity date, along with the final additional bonus awarded and a simple surrender bonus (if any).

How do I buy a LIC Child Plan?

You can conveniently buy these plans through LIC's official website. Below are the steps you need to follow: 

Step 1: Go to the official website of LIC. 

Step 2: Click on “Products.” 

Step 3: Under that, find “Insurance Plan”. Click on that. 

Step 4: Choose “Money Back Plans” and select “LIC New Children’s Moneyback Plan”. 

Step 5: Enter the details and click “Submit”. 

Step 6: Check the payable premium and make your transaction via debit/credit card or net banking. 

Step 7: You will receive your policy documents in your mail. 

It should be noted that the LIC Jeevan Tarun Plan is not available for purchase online. To buy this policy, please visit the nearest LIC office or reach out to their customer care. 

Key Features of LIC Child Plans

Here are some exclusive key features of LIC Child Plans: 

• An essential feature in every LIC child plan is that it provides insurance benefits to a child even if their parent dies before paying the entire premium.
• Insurance premiums paid are eligible for tax exemption under Section 80C of the Income Tax Act, and claim proceeds are exempt under Section 10(10D).
• Loans are available in selected LIC Education Plans for children, enabling parents to meet urgent educational expenses through loan facilities.
• Some plans offer a grace period where no benefits are paid. Life cover starts after this period, allowing for alignment with key milestones in a child's life.
• Participating in  LIC Child Plans may help in earning bonuses based on the company's profit experience, including return bonuses and a termination bonus at the end of the plan.

Eligibility Conditions and Other Restrictions

Here are the eligibility criteria for different LIC Child Plans that are mentioned above: 

1. LIC Jeevan Tarun Plan 

• Minimum Sum Assured: Rs.75,000
• Maximum Sum Assured: None 
• Minimum Age: 90 days (3 months)
• Maximum Age: 12 years
• Maximum Maturity Age: 25 years 
• Policy Term: [25 – Age at entry] in years
• Premium Paying Term: [20 – Age at entry] in years

2. LIC New Children’s Money Back Plan

• Minimum Sum Assured: Rs.1,00,000
• Maximum Sum Assured: None 
• Minimum Age: 0 years 
• Maximum Age: 12 years 
• Policy Term: [25 – Age at entry] in years
• Premium Paying Term: [25 – Age at entry] in years

Conclusion 

Although LIC has discontinued some child insurance plans, new options may emerge in future. LIC Child Plans serve as a strategic means of managing the rising costs of education and ensure a solid financial foundation for your child's known and unexpected needs.