LIC New Children’s Money Back Plan

Summary of LIC New Children's Money Back Policy

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.
 

Launch Date	Table Number	Product Type	Bonus	UIN
2nd March, 2015	832	Money Back	Yes	512N296V01

 

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

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Eligibility conditions to buy LIC New Children's Money Back Plan

 

	Minimum	Maximum
Sum Assured	Rs. 1,00,000	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.
   
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 Annualised Premium
• Basic Sum Assured mentioned in the policy

 
Click here to know more about the Commencement of Risk in this 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
 
   
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
   
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.
 
   
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.
   
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.
 
   
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.
   
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.
 
   
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 anytime 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.

Additional Information

 

Terms	Explanation
Simple Reversionary Bonus	Simple Reversionary Bonus is declared per thousand Sum Assured annually at the end of each financial year.  Once declared, they form part of the guaranteed benefits of the plan. Bonuses will be added during the selected term or till death, if it occurs earlier. Simple Reversionary Bonus accrues during the premium paying term and is paid at the end of the premium paying term or on earlier death along with the final additional bonus, if any. No bonus is paid on death after the premium paying term.
Final Addition Bonus	Final Addition Bonus may also be payable provided the policy has run for certain minimum period. This is not guaranteed.
Surrender Benefit	The policy can be surrendered for cash provided at least three full years’ premiums have been paid.
Surrender Value	The Guaranteed Surrender value during policy term shall be a percentage of total premiums paid excluding extra premiums and premiums for riders, if opted for. This percentage will depend on the policy term and policy year in which the policy is surrendered.
Policy Lapse	Policy will lapse If the premiums are not paid within the grace period.
Revival	A lapsed policy can be revived within a period of 2 consecutive years from the date of first unpaid premium but before the end of policy term on payment of all the arrears of premium together with interest (compounding half-yearly) at such rate as fixed by the insurer.
Paid-up value	If at least 3 full years’ premiums have been paid, then this policy shall continue as a paid-up policy.  The Basic Sum Assured under the policy shall be reduced to such a sum, called Paid-up Sum Assured and shall bear the same ratio to the Basic Sum Assured as the premiums paid bears to the total number of premiums payable i.e. Basic Sum Assured *(number of premiums paid / number of premiums payable). This Paid-up Sum Assured along with vested simple reversionary bonuses (if any), is payable on maturity or death.
Loan	Available - provided the policy has acquired a surrender value.
Free Look Period	15 days from the date of receipt of the policy document.
Grace period	30 days for all modes 15 days for monthly

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