Child Money Back (932)


Product Summary:
LIC’s New Children’s Money Back Plan is a insurance cum investment plan which can be used for securing the financial needs of a child as they turn 25 years old. It is a participating plan and hence is eligible for bonus depending on the performance of LIC.Please note that in this plan provides a risk cover on the life of the child and not of the parent or grandparent. So, it really does not secure the child’s future in case of death of the parent or the grandparent. This is more of an investment plan keeping in mind the needs to the child when they become 25 years old.

Key Benefits of LIC New Children’s Money Back Plan
• Participating non-linked money back plan eligible for bonus
• Designed to cater to educational, marriage and other needs of growing children
• Offers cover on the life of child during the policy term
• Can be bought by parent or grandparent for a child aged 0 to 12 years

Eligibility conditions to buy LIC New Children’s Money Back Plan
Minimum Sum Assured
Rs. 1,00,000
Maximum Sum Assured
No Limit

Entry Age of Child 0 years 12 years
Policy Term Till the age of the child is 25 years,

Payment Modes
Annual, Half-yearly, Quarterly, Monthly

Benefits in LIC New Children’s Money Back Plan
The following benefits are available in LIC Children’s Money Back Plan.

1. Death Benefit in LIC New Children’s Money Back Plan
Please note that the death benefit is linked to the Commencement of Risk date.
• In case of death of the child before the commencement of risk: All premiums paid are returned to the nominee, excluding taxes and rider premiums.
• In case of death of the child after the commencement of risk: The nominee will receive the “Sum Assured on Death” + Simple Reversionary Bonus + Final Addition Bonus which would be have declared throughout the policy term.
Sum Assured on Death = Higher of the following:
• 10 times the Annualized Premium
• Basic Sum Assured mentioned in the policy

2. Survival Benefit in LIC New Children’s Money Back Plan.
On Policy Anniversary immediately after the child is 18 years old – 20% of Basic Sum Assured
On Policy Anniversary immediately after the child is 20 years old – 20% of Basic Sum Assured
On Policy Anniversary immediately after the child is 22 years old – 20% of Basic Sum Assured

3. Maturity Benefit in LIC New Children’s Money Back Plan
40% of Basic Sum Assured + Simple Reversionary Bonuses + Final Addition Bonus

Every year LIC declares bonuses for various plans. It would depend on the company’s performance. There is no way to know these bonus rates in advance.
LIC Children’s New Money Back Plan Example

Let us understand how this plan works with the help of an example.

Suppose Samik’s parents decide to take this plan for him.
Age of Samik = 5 years
Date of Policy Commencement = 25th July, 2017
Basic Sum Assured = Rs. 1,00,000
Policy Term = 25 – Age = 25 – 5 = 20 years
Premium Payment Term = 20 years
Annual Premium = Rs. 5,586 + Taxes

Since Samik’s age is less than 8, the risk commencement date will be one day before the policy completes 2 years.
Risk commencement date = 24th July, 2019
Scenario 1 –Samik dies anytime before the risk commencement date of 24th July 2019.
Death Benefit = All premiums paid are returned. You will get a minimum of 105% of premiums paid even if he dies after 1 year.

The policy terminates.

Scenario 2 –Samik dies anytime after the risk commencement date of 24th July 2019 but before he turns 18.
The death benefit will depend on the number of annual premiums that have been paid.

Death Benefit = Nominee will get higher of the following:
• 10 times the Annual Premium = Rs. 10,00,000
• Rs. 1,00,000 + Simple Reversionary Bonuses + Final Addition Bonus
The policy terminates.
Scenario 3 –Samik dies at the age of 19.
The nominee would be eligible to receive the 1st tranche of Survival Benefit in addition to the Death Benefit.

Survival Benefit = 20% of Basic Sum Assured = 20% of Rs. 1, 00,000 = Rs. 20,000.

Death Benefit = Nominee will get higher of the following:
• 10 times the Annual Premium = Rs. 10,00,000
• Rs. 1,00,000 + Simple Reversionary Bonuses + Final Addition Bonus
The policy terminates.

Scenario 4 – Samik dies at the age of 21.
The nominee would be eligible to receive the 1st & 2nd tranche of Survival Benefits in addition to the Death Benefit.

Survival Benefit after he turns 18 = 20% of Basic Sum Assured = 20% of Rs. 1,00,000 = Rs. 20,000.

Survival Benefit after he turns 20 = 20% of Basic Sum Assured = 20% of Rs. 1,00,000 = Rs. 20,000.

Death Benefit = Nominee will get higher of the following:
• 10 times the Annual Premium = Rs. 10,00,000
• Rs. 1,00,000 + Simple Reversionary Bonuses + Final Addition Bonus
The policy terminates.
Scenario 5 –Samik dies at the age of 23.
The nominee would be eligible to receive the 1st, 2nd & 3rd tranche of Survival Benefits in addition to the Death Benefit.
Survival Benefit after he turns 18 = 20% of Basic Sum Assured = 20% of Rs. 1, 00,000 = Rs. 20,000.
Survival Benefit after he turns 20 = 20% of Basic Sum Assured = 20% of Rs. 1, 00,000 = Rs. 20,000.
Survival Benefit after he turns 22 = 20% of Basic Sum Assured = 20% of Rs. 1, 00,000 = Rs. 20,000.

Death Benefit = Nominee will get higher of the following:
• 10 times the Annual Premium = Rs. 10,00,000
• Rs. 1,00,000 + Simple Reversionary Bonuses + Final Addition Bonus
The policy terminates.
Scenario 6 – Samik survives the policy term.
The nominee would be eligible to receive the 1st, 2nd & 3rd tranche of Survival Benefits in addition to the Maturity Benefit.

Survival Benefit after he turns 18 = 20% of Basic Sum Assured = 20% of Rs. 1, 00,000 = Rs. 20,000.
Survival Benefit after he turns 20 = 20% of Basic Sum Assured = 20% of Rs. 1, 00,000 = Rs. 20,000.
Survival Benefit after he turns 22 = 20% of Basic Sum Assured = 20% of Rs. 1, 00,000 = Rs. 20,000.
Maturity Benefit = 40% of Basic Sum Assured + Simple Reversionary Bonuses + Final Addition Bonus = 40% of Basic Sum Assured + Simple Reversionary Bonuses + Final Addition Bonus.

The policy terminates.
Tax Benefits in LIC New Children’s Money Back Plan
Tax Benefits on Premiums: under section 80C

Tax Benefits on Death Benefit Amount: under section 10(10D)

Tax Benefits on Survival & Maturity Amount: under section 10(10D)
Optional Benefits in LIC New Children’s Money Back Plan
Defer the Survival Benefit – You have the option of taking the Survival Benefits at a later point of time. There are 3 tranches of 20% of Basic Sum Assured which you can choose to take any time later. In such a scenario, the payouts will be multiplied by a factor.

Premium Waiver Benefit Rider – The proposer of the plan can take a cover as they will be the ones paying the premiums. If this rider is taken and the proposer dies within the policy term, all future premiums will be waived. The age of the proposer has to be between 18 to 55 years to be eligible to take this rider.

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