LIC’s Best Children’s Insurance Plan
Many people are familiar with the life insurance policies offered by various companies in India. These insurance policies are offered by public and private actors. Insurance policies help individuals protect themselves financially as well as their family members whenever some kind of unforeseen victim strikes the family. One of those types of insurance policy that promises to provide benefits to the insured for an extended period after the policy expires is the LIC Child Future Plan.
The concept of child insurance after the birth of the little one has been prevalent in India for many decades. All parents around the world want to do the best they can for their respective children in terms of food, education, safety, shelter and the list goes on. Child insurance benefits the child because the maturity amount will be received when the child reaches the age of majority and the same can be used for higher education purposes or for marriage. Apart from that, it promises to provide financial security to the child in the event of the death of one or both parents.
Let’s take a look at the future plan of the LIC child and learn more about its features, benefits, and more.
What is child insurance?
Insurance is one way to protect against financial loss. It is a kind of risk management that is used as a hedge against the risk of a possible or uncertain loss in the future. The entity that provides the insurance is called the insurer. The person or entity that takes out the insurance is called the policyholder or insured.
Child insurance is a form of permanent life insurance that insures the life of a minor child. It is purchased for the sole purpose of protecting the life of the child from all sudden and unexpected future events.
What is Premium?
The amount of money charged by the insurer for the stated coverage under the insured’s insurance policy constitutes the policy premium.
What is the LIC Child Future Plan?
The LIC Child Future Plan is a kind of cash endowment plan which is specially designed to benefit a child such that the sum insured and the bonus amount are immediately paid to the candidate in the event of the death of the insured.
The plan is written to meet the growing education, marriage and other expenses of growing children. The plan promises to provide coverage for risks over the life of the child not only up to the term of the policy, but the coverage extends for a period of seven years after the expiration of the policy term.
LIC will be entitled to pay a number of survivor benefits to the surviving child until the end of the specified term, i.e. if the child survives the term of the policy, then the child will be entitled to receive 115% of the sum insured. The child will also receive 25% of the sum insured 5 years before the expiry date of the contract and finally the surviving child will be able to receive 10% of the sum insured during the last 4 years, 3 years, 2 years and 1 year before the final expiry of the child insurance contract. And finally, at the end of the contract, the child will receive 50% of the sum insured as well as the accrued bonus and the final additional bonus, if applicable.
Characteristics of the LIC child’s future plan
Here are the characteristics of the LIC Child Future Plan
â¢ The plan provides risk coverage for the child not only during the term of the policy but also for the extended 7 year term after the policy expires.
â¢ Get an additional waiver of premium rider.
â¢ The survivor’s benefit is 25% and 10% of the sum insured will be paid if the child survives during the term of the contract.
â¢ Compensation at maturity of 50% of the sum insured plus accrued bonus and final additional bonus, if applicable declared, post-maturity of the policy.
Benefits of the LIC Child’s Future Plan
Here are the benefits of the LIC Child Future Plan
â¢ Tax benefit – The amount of life insurance premium paid up to Rs 1,000,000 per year is eligible for deduction under section 80C of the Income Tax Act 1964.
â¢ Death benefit – In the event of the death of the child after the start of the risk, the candidate will be entitled to receive the sum insured, the bonus acquired and the final additional bonus.
In the event that the insured dies before the risk begins, the nominee is entitled to receive the full amount of the basic premium paid up to the date + 3% per annum compound interest.
In the event of death during the extended period, the candidate is only entitled to receive the sum insured.
Risk start date: If the age of the insured (child) is less than or equal to 10 years, then the risk begins either after 2 years from the date of the start of the term of the policy, or from the anniversary of the policy corresponding to or immediately after the completion of 5 years of insured life, whichever is later. In other cases, the risk will begin on the policy anniversary date corresponding to or following the child’s 12th birthday.
â¢ Survival benefit – If the insured survives until the end of the term of the policy, the LIC will be entitled to pay the amount specified below:
|Policy term expires||Sum insured|
|5 years before the expiry date of the contract||25% of the sum insured|
|4 years before the expiration date of the policy term||10% of the sum insured|
|3 years before the expiration date of the contract||10% of the sum insured|
|2 years before the expiration date of the policy term||10% of the sum insured|
|1 year before the expiration date of the policy term||10% of the sum insured|
|On the expiry date of the policy term||50% of the sum insured as well as the simple reversion premiums acquired and the final (additional) premium, if applicable.|
â¢ Maturity benefit – At maturity, the insured (child) will be entitled to 50% of the sum insured + amount of the bonus acquired + additional final bonus if applicable.
â¢ Automatic cover – During the period of automobile cover, one or more installments of premiums with interest may be paid without presentation of proof of health. If a subsequent premium amount is not duly paid after two years of premium payment, the death cover of the insured will continue for a period of two years from the due date of the first non-premium period. paid (FUP).
â¢ Premium waiver benefit – The applicant can opt for this service if he is between 18 and 55 years old and if he is medically fit. This option provides for a waiver of premiums in the event of the death of the applicant. Benefits will remain in effect during the Auto Coverage Period and any unpaid and unpaid Premium Amounts during the Auto Coverage Period will be forfeited. This guarantee will not be applicable in the event of the applicant’s suicide within one year of taking out the contract.
â¢ Options – The applicant can choose the sum insured (SA), the method of payment of the premium, the maturity age, the waiver of the premium, the duration of the policy when filling out the application form.
Eligibility criteria for the LIC child’s future plan
|Entry age||0 years (last birthday)||12 years (last birthday)|
|Age of maturity||23 years old (last birthday)||27 years old (last birthday)|
|Sum insured||Rs. 1,000,000||Rs. 100,000,000|
|Policy term||11 years old||27 years|
|Premium payment term||6 years||Policy term less 5 years|
Premium payment method
The insurer can pay the premiums in one of the following modes, as they see fit.
â¢ By payroll deductions during the term of the policy.
â¢ Premiums can also be paid for 6 years or up to 5 years before the term of the policy.
To note: The single premium payment method is not available for the LIC child’s future plan.
Premiums can either be paid directly to the respective LIC branches where the policy is open, or paid via bank accounts via NEFT or even via net banking or phone-banking.
Advantages of paying premiums by net banking or phone banking:
â¢ Can save time to make payment instantly.
â¢ No need to wait in line to make payment.
â¢ Payment can be made from the comfort of home or office and a personal visit to the branch can be avoided.
â¢ The policyholder can pay anytime in the 24X7 day from anywhere and anytime for Internet access.
â¢ Payment instructions can be given by sitting comfortably at home or in the office space and a personal visit to the LIC office can be avoided.
â¢ Time can be saved by avoiding queues to pay the premium amount.
â¢ Benefit from the free service of LIC as there is no charge for LIC or its authorized agents using the facilities.
â¢ We have the privilege of deciding in advance the date on which the account should be debited according to the convenience of the policyholder.
The following documents must be submitted together with the completed application form bearing the signature of the policyholder at the time of the LIC Child Future Plan application:
â¢ Child’s birth certificate (if the age is less than 5 years old) or school identity card (if the age is over 5 years old).
â¢ Proof of address of the policy holder
â¢ Proof of age of the policy holder with relevant identity card
â¢ Proof of income (payslip for the previous 3 months, RTI for the last 3 years / form 16)
â¢ Passport-sized photos of the policy holder and the child
What is the grace period?
Under the LIC Child Future Plan, a grace period is one calendar month but no less than 30 days will be granted to the insured for payment of the premium amount.
How to relaunch the policy?
If the policy lapses, it can be reinstated by paying the arrears of premiums and interest charges within five years, subject to the presentation of satisfactory proof of continued insurability. . The applicable interest rate is fixed by the Company from time to time.
What is the period of reflection under the Plan for the Future of the Child LIC?
If the policyholder is not satisfied with the terms and conditions of the policy, then he can return the policy to LIC within 15 days from the date of purchase of the policy.
Is there a loan facility available under the LIC Child’s Future Plan?
No, no type of loan facility, whether it is a home loan facility or a LIC Child Future Plan loan, is not available as part of the LIC plan. future of the child LIC for the policyholder.
Can an insured surrender the policy? What is the cash value?
Yes, the policyholder can surrender the policy for cash after paying at least three years of premiums. The guaranteed cash surrender value will be that mentioned below:
Before the risk begins
The policyholder will receive 90% of the total amount of premiums (excluding the first year premium) paid.
After the risk begins
The policyholder will receive 90% of the total amount of premiums (excluding the 1st year premium) paid before the start of the risk and will also receive 30% of the premiums paid at the start of the risk and after.
For investment related articles, business news and mutual fund advice