LIC Child Plans

What are LIC Child Plans?

Child Plans offered by the LIC of India are specifically designed to cater to children's financial needs and future aspirations. These plans aim to provide financial protection, savings, and investment opportunities for children's education, marriage, or any other milestones they may have.

LIC Plans for a girl child offers a lump sum or periodic payouts at specified intervals to help parents accumulate funds for their child's future expenses. In the event of the policyholder's unfortunate demise during the policy term, these plans ensure that the child's financial well-being is safeguarded through death benefits.

Best Child Insurance Plans Offered by LIC

LIC SIIP Plan

This unit-linked insurance plan means the insurance holder must invest in the equity market to grow their wealth. The insurance buyer can choose a policy term that aligns with their child’s education goals. Once they hit that age and the policy matures, they can receive the accumulated returns and the fund value in instalments or as a lump sum, depending on the circumstances.

Benefits of LIC SIIP Plan

• LIC SIIP allows policyholders to invest their premiums in various investment funds such as equity, debt, or balanced funds. These investments have the potential to generate higher returns over the long term, enabling wealth creation. If the policyholder dies within the policy term, their family receives the benefit amount.

• After the lock-in period is completed, policyholders can make partial withdrawals from their accumulated fund value in case of any financial emergencies or immediate financial requirements.

• The plan offers flexibility in terms of premium payment frequency (monthly, quarterly, half-yearly, or yearly) and the choice of investment funds. Policyholders can switch between funds based on their investment preferences and market conditions.

LIC New Jeevan Anand

LIC New Jeevan Anand is an endowment plan that provides the combination of life protection and savings. These plans provide your child with with a financial protection if something happens to you, as well as on the other hand allows the policyholder to plan for their child’s future through maturity benefits.

Benefits of LIC’s New Jeevan Anand Plan:

• On the completion of the policy term, the plan provides a maturity benefit to the policyholder, which includes the sum assured along with any applicable bonuses. This lump sum amount can be utilized for various purposes such as retirement planning, meeting financial goals, or any other personal requirements.

• In the unfortunate event of the policyholder's demise during the policy term, the plan pays a death benefit to the nominee, which is the higher of the sum assured or the accumulated value of the policy. This ensures financial protection to your girl child and boy child and helps meet their immediate financial needs.

• Even after the completion of the policy term, LIC New Jeevan Anand continues to provide life insurance coverage for the entire lifetime of the policyholder. The death benefit is payable to the nominee upon the policyholder's demise, providing additional financial security to the family.

LIC New Children’s Money Back Plan

This money-back plan caters to marriage, education, and other needs of growing kids via Survival Benefits. Moreover, it offers a risk cover on the child’s life during the policy term and offers survival benefits surviving to the end of the stipulated duration.

Benefits of LIC’s New Children’s Money-Back Plan:

• The plan offers regular money-back payouts to the policyholder during the policy term. These money-back instalments can help meet various financial needs such as education expenses, extracurricular activities, or other milestones of the child's life.

• If the policyholder survives, the plan provides a lump sum maturity benefit at the end of the policy term. This lump sum can be utilized for higher education, marriage, or any other financial requirement of the child.

• In the unfortunate event of the policyholder's demise, the plan waives future premiums and continues to provide life insurance coverage for the remaining policy term. This ensures that the child's financial needs are cared for, even in the parent's absence.

LIC Jeevan Tarun

LIC Jeevan Tarun is a limited premium payment plan which offers the combined benefit of savings and life protection features for children. The plan caters to growing children's educational and other financial needs.

Benefits of LIC Jeevan Tarun Plan:

• The plan offers survival benefits through a percentage of the sum assured to the child at specific intervals during the policy term. These payouts can be utilized for various needs such as education expenses, skill development, or other financial requirements as the child grows.

• On maturity of the policy, the child receives the remaining sum assured along with any vested bonuses. This lump sum can support the child's future aspirations, such as higher education or setting up a business.

• LIC Jeevan Tarun provides flexibility in choosing the benefit pattern. Policyholders can select one of the four benefit options at the policy inception, which determines the percentage of the sum assured payable as survival benefits. The options range from 5% to 20% of the sum assured.

Benefits of LIC Child Plans

1. Supports Child's School Fees

   If the policy covers the parent’s life, the insurance company immediately pays the death benefit amount on their demise. At the end of the policy term, it pays the child the assured fund value or maturity amount. These payouts help to comfortably take care of the school fees in the absence of the breadwinner parent.

2. Helps Fund Higher Education & Marriage

   The cost of education is rising consistently. Coupled with inflation, college and higher education fees can burden the family. If a parent takes a child plan when the child is small, the money-back under a LIC child education plan can be aligned to the child's higher educational requirements.

   One may also use the lump sum for their child’s marriage.

3. Avoids Capital Erosion

   Market volatility may lead to capital erosion. With LIC SIIP, you can choose how you want your money to be invested. You get 4 fund options to choose from depending on your risk appetite. These plans are an excellent way to invest a small portion regularly to enjoy market-linked returns.

Key Features of LIC Child Plans

If you are wondering how to choose the best LIC child education plan, look for a combination of the following features.

• Premium Waiver Benefit - This is an essential feature of every LIC Child Plan. It ensures that the child qualifies for all the policy benefits even if the parent dies before paying all the due premiums.

• Deferment Feature - Some child plans have a concept of 'deferment'. During this period, no benefit is payable. If your child is life assured, you can align the end of the deferment period with a key milestone in their life. The life cover only starts after the deferment period.

• Loans - These can be availed under some of the best LIC child education plans to fund urgent education costs.

• Bonuses - If it is a participating LIC child plan, it is eligible to earn bonuses depending on the company’s profit experience. Simple reversionary bonuses and a final bonus at the end of the plan are payable under such child plans.

• Tax Benefit - Tax benefit is available on the premium paid and the claim received. The premiums paid are exempt from taxation under Section 80C of the Income Tax Act, and the claim received is exempt under Section 10(10D).

Why choose LIC Child Plans?

Let's understand this with an example:

Mr. A, with a child currently aged 5 years, buys a child plan with a 20 years tenure. The child policy promises money-backs on the 15th, 17th, and 20th policy anniversary. Mr. A planned the money-back periods to coincide with the child's educational milestones.

This way, he would receive the funds when the child reaches 20 years, 22 years, and 25 years. The funds will be utilized to take care of the higher education of his child.

If Mr. A dies, the plan will not be terminated, and future premiums and the money-backs will be paid as and when promised. Thus, the money will be utilized only for the child's education which was the actual rationale behind buying the child education plan.

Applying for a LIC Child Plan from the company

You can apply for LIC Child Plans both - online and offline mode.

1. Online

   The company offers specific LIC child plans, which are available online only. The customer only needs to log into the company's website, choose the required LIC child plan, choose the coverage, and provide the details. The premium will be determined using the filled details. The customer then needs to pay the premium online through credit card, debit card, or net banking facilities, and the LIC child education plan policy will be issued.

2. Intermediaries

   LIC child plans, which are not available online, can be purchased from agents, brokers, banks, etc. The intermediaries help with the application process.

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