LIC, or Life Insurance Corporation of India, has recently launched a new policy called the Children's Money Back Plan-932. This policy is designed to help parents secure their child's future financially, by providing them with a steady source of income at crucial stages of their life. In this blog post, we will explore the features of this policy and why it may be a good investment for parents.
Features of LIC's New Children's Money Back Plan-932:
- Maturity Benefit: The Children's Money Back Plan-932 offers a maturity benefit, which is paid out when the policy reaches its maturity date. The maturity date is set as the policyholder's child turning 25 years old. The maturity benefit is calculated as the sum of all the guaranteed payouts, as well as any bonuses that have been accrued over the years.
- Survival Benefit: The policy also offers survival benefits, which are paid out to the policyholder's child at various stages of their life. These benefits are designed to provide financial support at crucial stages of the child's life, such as when they are about to start their higher education or when they are getting married. The survival benefits are paid out at ages 18, 20, and 22 years old, and are equal to 20% of the sum assured.
- Death Benefit: In case of the unfortunate demise of the policyholder, the policy provides a death benefit to the nominee. The death benefit is calculated as the sum of the guaranteed payouts and any bonuses that have been accrued up to that point.
- Flexibility: The Children's Money Back Plan-932 offers a lot of flexibility to the policyholder. The premium payment frequency can be chosen as yearly, half-yearly, quarterly, or monthly. The policy also allows the policyholder to choose the sum assured and the policy term, based on their financial goals and requirements.
- Bonus: The policy also provides bonuses, which are declared by LIC from time to time. These bonuses are added to the sum assured and can significantly increase the maturity benefit. The bonus is paid out either at the time of maturity or death, whichever occurs first. The bonus is calculated as a percentage of the sum assured and is declared annually by LIC.
- Guaranteed additions: The policy provides guaranteed additions, which are added to the sum assured at the end of each policy year. The guaranteed addition is a percentage of the sum assured and increases with the policy term.
- Loan facility: The policyholder can also avail of a loan facility against the policy. The loan can be availed once the policy acquires a surrender value, which is usually after three policy years. The loan amount can be up to 90% of the surrender value.
- Surrender value: The policy also provides a surrender value, which is the amount payable to the policyholder in case they want to surrender the policy before maturity. The surrender value is calculated as a percentage of the premiums paid, and the percentage increases with the policy term.
- Premium waiver benefit: The policy provides a premium waiver benefit, which ensures that the policy remains active even if the policyholder passes away during the policy term. The policy premiums are waived off, and the policy continues to provide the same benefits to the child.
- Flexible payment options: The policyholder can choose from various payment options, such as yearly, half-yearly, quarterly, or monthly. This flexibility allows parents to choose a payment option that best suits their financial situation.
Why the Children's Money Back Plan-932 may be a good investment:
- Provides financial security: The Children's Money Back Plan-932 provides parents with the peace of mind that comes with knowing that their child's future is financially secure. The survival benefits ensure that the child has access to funds at crucial stages of their life, while the maturity benefit provides a lump sum amount when the child turns 25 years old.
- Tax benefits: Investing in the Children's Money Back Plan-932 also comes with tax benefits. The premiums paid towards the policy are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The maturity benefit and survival benefits are also tax-free under Section 10(10D) of the Income Tax Act, 1961.
- Guaranteed payouts: The policy provides guaranteed payouts, which ensures that the policyholder's child will receive a steady source of income at various stages of their life. This can be particularly beneficial in times of financial instability.
- Bonuses: The policy also provides bonuses, which are declared by LIC from time to time. These bonuses are added to the sum assured and can significantly increase the maturity benefit.
Eligibility Criteria:
The following are the eligibility criteria for the Children's Money Back Plan-932:
The policyholder should be between 18 years and 55 years of age.
The child for whom the policy is being taken should be between 0 years and 12 years of age.
The minimum sum assured is Rs. 1 lakh, and there is no maximum limit.
The policy term can range from 13 years to 25 years.
The premium payment term is the same as the policy term.
Important details related to LIC's Children's Money Back Plan-932:
- Premiums: The premium payment for the Children's Money Back Plan-932 can be made annually, half-yearly, quarterly, or monthly. The premium payment amount is determined based on the policyholder's age, sum assured, and policy term. The premium payment can be made using any of the following methods:
- Online Payment: The policyholder can pay the premium online through the LIC website or mobile app.
- Auto-Debit: The policyholder can set up an auto-debit facility for the premium payment, where the premium amount is deducted automatically from their bank account.
- ECS: The policyholder can opt for the Electronic Clearance Service (ECS) facility, where the premium amount is directly debited from their bank account.
- Grace Period: The policyholder has a grace period of 30 days to pay the premium, after the due date. If the premium is not paid within the grace period, the policy will lapse, and the policyholder will lose all the benefits of the policy.
- Nomination: The policyholder can nominate a person to receive the benefits of the policy in case of their demise. The nomination can be made at the time of buying the policy or later.
Explain With A Simple Example
Suppose Mr. Sharma is 35 years old and has a 5-year-old son. He decides to invest in LIC's Children's Money Back Plan-932 with a sum assured of Rs. 10 lakhs for a policy term of 20 years. The premium payment term is also 20 years, and Mr. Sharma chooses to pay the premium annually.
The premium payment for this policy will be approximately Rs. 56,000 per year. At the end of every 5 years, Mr. Sharma's son will receive a guaranteed payout of Rs. 2 lakhs. At maturity, Mr. Sharma's son will receive a bonus amount, which varies based on the policy's performance.
Assuming the bonus amount to be Rs. 5 lakhs, the total payout that Mr. Sharma's son will receive at maturity will be Rs. 15 lakhs (Rs. 2 lakhs x 4 times + bonus amount of Rs. 5 lakhs). In case of Mr. Sharma's unfortunate demise during the policy term, his son will receive a death benefit of Rs. 10 lakhs.
Apart from the guaranteed payouts and death benefit, Mr. Sharma can also avail of tax benefits under Section 80C and Section 10(10D) of the Income Tax Act. The premium payment towards the policy is eligible for tax deductions under Section 80C, and the returns received from the policy are tax-free under Section 10(10D) of the Income Tax Act.
Therefore, by investing in LIC's Children's Money Back Plan-932, Mr. Sharma can secure his child's financial future while also availing of tax benefits.
Conclusion:
The Children's Money Back Plan-932 offered by LIC is a good investment for parents who want to secure their child's future financially. The policy provides a steady source of income at crucial stages of the child's life, along with tax benefits and guaranteed payouts. The flexibility offered by the policy allows parents to choose a sum assured and policy term that best suits their financial goals and requirements. Overall, the Children's Money Back Plan-932 is a wise investment that can provide parents with the peace of mind that comes with knowing that their child's future is financially secure.
FAQ
Q. What is LIC's Children's Money Back Plan-932?
LIC's Children's Money Back Plan-932 is a life insurance policy that provides financial security for the child's future. It offers guaranteed payouts at regular intervals during the policy term, along with a lump sum payout at maturity.
Q. What are the benefits of investing in LIC's Children's Money Back Plan-932?
The benefits of investing in LIC's Children's Money Back Plan-932 include guaranteed payouts at regular intervals, a lump sum payout at maturity, tax benefits, and financial security for the child's future.
Q. What is the policy term and premium payment term for LIC's Children's Money Back Plan-932?
The policy term for LIC's Children's Money Back Plan-932 is 25 years, and the premium payment term is 20 years.
Q. What is the minimum and maximum age limit for the child to be insured under LIC's Children's Money Back Plan-932?
The minimum age limit for the child to be insured under LIC's Children's Money Back Plan-932 is 0 years, and the maximum age limit is 12 years.
Q. Is the premium payment towards the policy eligible for tax deductions?
Yes, the premium payment towards the policy is eligible for tax deductions under Section 80C of the Income Tax Act.
Q. Are the returns received from the policy taxable?
No, the returns received from the policy are tax-free under Section 10(10D) of the Income Tax Act.
Q. Can the policyholder avail of a loan against the policy?
Yes, the policyholder can avail of a loan against the policy after completion of 3 policy years. The loan can be taken for the education or marriage of the child.
Q. What happens if the policy is surrendered before maturity?
If the policy is surrendered before maturity, the surrender value received is eligible for tax deduction under Section 10(10D) of the Income Tax Act. The surrender value received will be tax-free, and the policyholder will not have to pay any tax on the amount.
Read Also
