Parenting today involves more than love, care, and good schooling. It’s also about securing your child’s financial future. With rising costs for education, marriage, and living standards in India, picking a suitable insurance-savings plan from LIC can give you peace of mind. In this article at Money Moksh we will guide you on how to choose the right LIC plan for your child, what to consider, and how you can ensure your child is financially protected.
Why a Child-Focused LIC Plan Matters
- Thinking about a child’s future can mean many things : higher education, first job, marriage, or health emergencies. A plan from LIC of india tailored for children provides you with two main benefits:
- Protection : If something unfortunate happens to you, the plan ensures your child has support.
- Savings growth : Over the years, the plan builds a corpus that your child can use for significant events like college or marriage.
- For Example : LIC’s “Plans for Children’s Future” page lists products such as the New Children’s Money Back Plan (Plan No. 732) and Jeevan Tarun (Plan No. 734), which target children aged 0-12 years.
If you’re a parent or grandparent reading this on Money Moksh, you’re already on the right track by recognizing the need. Now, let’s ensure you choose wisely.
What You Need to Check – 5 Key Factors
When selecting the right LIC of india plan, focus on these five areas :
1. Entry age, policy term, and maturity age
Check the age at which your child can be enrolled (often 0-12 years for child plans) and when the plan matures. For example :
- In the New Children’s Money Back Plan, the entry age ranges from 0 years to 12 years, and the maturity age is 25 years.
- In newer plans like Amritbaal, the entry age goes up to 13 years, with maturities ranging from age 18 to 25.
Why this matters? : If the maturity is too early, your child may still be studying or not earning. If it’s too late, it may no longer be relevant. Choose a term that matches your goals, like college at age 18 or marriage around age 25.
2. Survival benefits, maturity, and death benefits
Look for these term in lic of india :
- Death benefit : What happens if the policyholder (you) dies or the child passes away?
- Survival/maturity benefits : When does your child receive payouts? Are there periodic payments (money-backs) or only at maturity?
For Instance : the New Children’s Money Back Plan offers survival benefits at ages 18, 20, and 22 (20% of the basic sum assured each time), and upon maturity, a lump sum equal to 40% of the basic sum assured plus bonuses.
3. Premium paying term and flexibility
- Evaluate how many years you must pay premiums : whether you can select limited payment options. Some plans allow you to pay for 5-7 years, even though maturity may be much later.
- For example : the Amritbaal plan offers short premium payment terms of 5, 6, or 7 years, while the total term can last up to 25 years.
Why it’s important? : If you expect your income to increase later, you might prefer a longer payment term. If you want to finish paying earlier, choose a shorter term.
4. Liquidity and riders
- Check whether the plan allows loans (for emergencies), if there’s a premium-waiver rider in case you pass away, and whether you can defer survival benefits or take installment options for maturity.
- In the New Children’s Money Back Plan, there is a Premium Waiver Benefit Rider, and you can choose maturity in installments over 5, 10, or 15 years.
5. Bonus , Returns and company strength
- Since you’re trusting the insurer with your child’s future, its stability is essential. LIC is India’s largest life insurer and has a strong reputation. Also, check how the plan participates in profits ( bonuses )
- what the projected returns are, especially compared to inflation and rising education costs.
- Industry insights suggest child plans are gaining popularity in India due to increasing education costs. Parents are seeking more than just simple savings.
Step-by-Step: How to Choose for Your Child
Let’s simplify the decision process for you :
- Define your goal : Is it for age 18 (college), or age 23-25 (post-studies/marriage)?
- Select an amount : Estimate how much your child might need (today’s cost times expected inflation).
- Check your budget for premiums : Can you commit monthly or annually? Choose a payment term accordingly.
- Choose plan features : Do you want money-back at 18/20/22 OR full maturity? Do you want extra coverage for yourself in case of your death (premium waiver)?
- Compare multiple LIC child plans : for example, New Children’s Money Back, Jeevan Tarun, Amritbaal, etc. Use eligibility and benefit charts.
- Review for inflation and cost increases : Given rising education and living costs, the corpus you aim for might need to be higher than you expect.
- Regular monitoring : After purchasing, revisit the plan in 5-10 years, as economic or personal situations can change.
- Document and keep updated : Ensure nominee details are correct, the policy is active, and premiums are paid on time.
Avoiding Pitfalls
- Don’t under-insure : If the plan sum assured is too small, you may fall short when needed.
- Don’t over-commit : A premium that is too high and strains your finances is a risk.
- Don’t choose a plan just because it’s new or promoted : Understand the terms, waiting periods, and exclusions.
- Don’t overlook inflation : College fees today will be much higher in 10-15 years.
- Remember : Buy through authorized LIC channels or certified agents; verify plan UINs.
Current Trends and News You Should Know
Recent developments make this an important time to invest in your child’s future :
LIC of India has introduced a new child-savings plan called Amritbaal, designed specifically for accumulating funds for higher education with short premium payment terms. Industry experts note that child plans are rapidly growing in India due to the increasing costs of education and the need for early financial planning. At a broader corporate level, LIC of india set a world record for the highest number of life insurance policies sold in a single day, showcasing its brand trust and market presence.
What this means for you? : As LIC of india launches child-specific savings protection plans and the market shows strong demand, now is a good time to secure a plan for your child’s future. Early action allows you to catch lower premiums and build capital over more years.
Diving Deeper : What the Numbers and Fine Print Tell You
When you examine product brochures, you’ll find key details. Here are some areas to focus on :
- Sum Assured on Death : For children’s plans, LIC defines it as the higher of the basic sum assured, 7 times the annual premium, or a minimum of 105% of total premiums paid.
- Commencement of Risk : For children under age 8, the risk may start only after a waiting period (e.g., 2 years) or when the child turns 8.
- Survival Benefit Schedules : For example, in one plan, 20% of the basic sum assured is payable at ages 18, 20, and 22.
- Bonus Participation : Many LIC child plans participate in profits, meaning you receive bonuses depending on the corporation’s performance. Check details in the brochure.
- Flexibility Options : Options exist to defer survival benefits, get installment maturity payouts, or take out loans against the policy.
- Premium Paying Term vs. Policy Term : A short premium paying term is a valuable feature. You pay early, while the sum accumulates. For example, Amritbaal offers 5-7 years of premium payments for a term up to 25 years.
Understanding these finer points ensures you aren’t just buying “a plan,” but a structured financial product that supports your child’s life stages—education, early adulthood, and marriage.
Conclusion
Securing your child’s future isn’t just about saving; it’s about picking the right option that offers protection, savings, flexibility, and reliability. As readers of Money Moksh, you are in the perfect mindset to act carefully.
When choosing a Life Insurance Corporation of India plan for your child :
- Start early. An entry age of 0-12 gives you the longest time frame.
- Choose a savings goal that matches your child’s future needs.
- Select a premium payment period and plan format that you can stick to.
- Understand the benefits, risks, and details in the plan brochure.
- Check in regularly and adjust if your situation changes.
With careful planning, you can turn what may seem like “just an insurance policy” into a solid support for your child’s dreams and achievements. The growing interest in child plans in India means you are stepping into a world of more choices and opportunities.
So today, take a moment to review your budget, list your child’s goals, and discuss with a LIC-certified advisor which LIC child plan is the best fit. At Money Moksh, we believe your child deserves a strong financial base, and the right plan can provide that.