Here are the key benefits of such plans:
1. Financial Protection
Provides life insurance cover on the child’s life (or sometimes on the parent’s life, depending on the plan).
In case of the proposer’s (usually the parent’s) death, future premiums may be waived, but the policy continues, ensuring planned benefits.
2. Maturity Benefits
The child receives a lump sum amount at the maturity of the policy, which can be used for education, higher studies, or marriage.
3.
The LIC Jeevan Labh (Plan No. 936) is a limited premium, non-linked, with-profits endowment plan that combines savings and protection, making it a suitable option for securing a child’s future. Opting for a 25-year policy term with a 16-year premium paying term can align the policy’s maturity with significant milestones in a child’s life, such as higher education or marriage.
Key Benefits for a Child’s Future
1. Maturity Benefit
Upon surviving the policy term, the life assured receives:
Basic Sum Assured
Vested Simple Reversionary Bonuses
Final Additional Bonus (if any)
This lump sum can fund higher education, start-up ventures, or wedding expenses.
2. Death Benefit
In the unfortunate event of the life assured’s demise during the policy term, the nominee receives:
Sum Assured on Death (higher of 7 times the annual premium or the Basic Sum Assured)
Vested Bonuses
Final Additional Bonus (if any)
The death benefit is at least 105% of all premiums paid.
3. Premium Waiver Benefit Rider
When the policy is taken for a child, adding the Premium Waiver Benefit Rider ensures that in case of the proposer’s (usually the parent’s) death, future premiums are waived, and the policy continues to provide benefits to the child.
4. Loan Facility
After paying premiums for at least two full years, policyholders can avail loans up to 90% of the surrender value, providing liquidity in times of need.
5. Tax Benefits
Premiums paid are eligible for tax deductions under Section 80C, and the maturity proceeds are tax-free under Section 10(10D) of the Income Tax Act.
6. Settlement Option
Policyholders can choose to receive the maturity or death benefits in installments over 5, 10, or 15 years, aiding in planned financial support for the child’s future needs.
Suitability for Child’s Milestones
Higher Education (16-Year Term): Funds become available when the child is around 18-20 years old, suitable for undergraduate studies.
Entrepreneurship or Post-Graduation (21-Year Term): Maturity aligns with the child’s age of 23-25, ideal for starting a business or pursuing higher studies.
Marriage or Major Life Events (25-Year Term): Provides a substantial corpus when the child is around 28-30 years old.
In summary, LIC Jeevan Labh with a 25-year term and 16-year premium paying term offers a structured approach to accumulating funds for a child’s significant life events, combining insurance protection with savings growt. G.D. Pandey (A to Z Insurance Agenc