Country’s largest life insurance company, Life Insurance Corporation of India (LIC), has several policies which people take as per their conveniences. It has policies for people of different age groups, from children to senior citizens.
LIC has a special policy that has been designed for children only. The name of this policy is New Children Money Back Plan. It has two types of benefits which include Simple Revisionary Bonus and Final Additional Bonus.
A proposer who can be the father, mother or guardian of the child takes the policy and pays the premium for the sum assured policy. This policy can be taken in the year in which the child was born and the maximum age limit of the children should be 12 years.
How many years the New Children Money Back Plan: The age of the child has to be deducted from 25 years in order to know the policy term in this plan. For example, if the child is now four-year-old, then it has to be deducted from 25 years, which means the installment has to be paid till the child becomes 21-year-old but the policy will get maturity only when the child attains the age of 25 years.
The minimum sum assured in New Children Money Back Plan: Rs 1 lakh. There is no limit for the minimum sum assured. The premiums can be paid monthly, quarterly, half-yearly and yearly.
LIC waives off premium in New Children Money Back Plan: One of the best features of the New Children Money Back Plan is that LIC waives off the premium in the case of the death of the proposer. However, the proposer should have taken the premium waiver rider.
When the child starts getting life cover in New Children Money Back Plan: The life cover for the children who are between 8 and 12-year-old starts as soon as the policy is received. However, for the children who are below 8 years, then the life cover starts after 2 years of taking the policy. For example, if the policy is taken when the child is 4 years, then the life cover starts only when he becomes 6-year-old.
Surrender value and revival of New Children Money Back Plan: The New Children Money Back Plan has the surrender value. Besides, it has the revival option. If the proposer fails to pay the premium following which the policy gets discontinued, then he/she can revive it within 5 years from the premium due date. However, the proposer has to pay all remaining premiums along with interest.
Loan facility is available in New Children Money Back Plan: The proposer is eligible to take loan if he/she has paid the premium for 2 years.
Understand the New Children Money Back Plan with an example:
Raju who is 40-year-old takes this policy for his 2-year-old child Miku. He has taken the sum assured of the policy of Rs 2 lakh. The age of the child is 2 years, so the policy term will be 25-2 i.e. 23 years. Raju will have to pay premium for 23 years in this plan. He has also taken premium waiver rider in this plan. In case of his untimely death, all premiums for Miku will be waived off. Raman has opted for the monthly premium plan, so Rs 816 will have to be paid every month. The annual premium will be Rs 9,577.
You can get Rs 3,37,000 on maturity: Raju will pay Rs 2,20,481 as a premium during the entire policy term. When Miku is 18 years old, he will get 20 percent of the sum assured i.e. 40 thousand rupees as the first money back. When Miku is 20 years old, then 20% of the sum assured i.e. 40 thousand rupees will be available as second money back. When the child is 22 years old, then 40 thousand rupees will be available as the third money back. When Miku attains 25 years of age, this policy will mature and he will get the remaining 40% of Sum Assured first as maturity i.e. Rs.80,000, Rs 2,07,000 as Vested Revisionary Bonus and as Final Additional Bonus. 50,000 will be available. Adding the total amount, Miku will get Rs 3,37,000.
The money-back that Miku has got in between, if he does not want to take it at that time, then he can get it together later. LIC pays this money along with interest. If Raju dies during the policy then all premiums of this policy run in the name of his child Miku get waived. After the death of his father, Miku will get the benefit of all benefits in the same way as Raju would get at the time of maturity while he was alive.
(With inputs from informalnewz.com)