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Yogi Zone

Useful articles for your finance management by our team of experts

Best LIC Policy for Children

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licjeevanankurJeevan Ankur is a ‘traditional with profit’ plan designed to take care of education and other needs of your child and your family. In this plan, as a parent, your life will be protected and child will be the nominee. The plan provides the pre-decided Sum Assured and Loyalty Additions if any at the end of the policy term as a maturity benefit. Premiums are usually payable for premium payment term selected at inception of the policy or you may also choose single premium option. This policy not only makes provisions for the family of the Life Assured in the event of his early death as a lump sum benefit for immediate support, but also assures an annual income till rest of the policy term for uninterrupted education of child. It also pays an additional sum assured at the end of the policy term, which can be used for child higher education or any other desired goal. The primary purpose of child plan is protection against the eventualities of life; so that as a parent our dreams pertaining to the child’s future will be fulfilled.

Benefits under Jeevan Ankur policy

Maturity Benefit

1) Sum Assured Plus 2) Loyalty Additions if any

Death Benefit

1) Sum Assured Plus 2) Income Benefit i.e., 10% per annum of Basic Sum Assured till policy term end Plus 3) Sum Assured with Loyalty Additions, if any at the end of the policy term

Additional Protection

1) Accidental Death and Disability Benefit as an optional Rider* 2) Critical Illness as an optional rider with and without Waiver of Premium Benefit**

Tax Benefit

1) Section 80 (C) - Premium paids are exempt from tax 2) Section 10 (10)D – Maturity proceeds are exempt from tax

*The Accidental Death Benefit Rider sum assured may be opted for an amount up to the basic sum assured subject to minimum of Rs.25,000 and maximum of Rs.50,00,000 (including all policies with LIC and other insurers)

** The Critical Illness Benefit Rider sum assured may be opted for an amount up to the basic sum assured subject to minimum of Rs.50,000 and maximum of Rs.5,00,000 (including all policies with LIC)

Who can take this policy- Eligibility Criterion?

Minimum

Maximum

Entry Age for Life AssuredEntry Age for Child

18 years

0 years

50 years

17 years

Maturity Age

-

75 years

Policy Term

Higher of (18 – age of child,8) years

(25- age of child)

years

Premium Paying Term

Single

Regular equal to

policy term

Sum Assured

1,00,000

No Limit

Payment Modes

Single, Yearly, Half-Yearly, Quarterly, Monthly and

SSS

Other options available under Jeevan Ankur

Non- Payment of premium: If it happens within first 3 policy years, the policy will lapse without any value.

And after 3 completed policy years, the policy acquires a Paid-Up Value for a Proportionately Reduced Sum Assured.

Surrender Option: The policy may be surrendered after it has been in force for at least 3 years. There is a Guaranteed Surrender Value (GSV) in case of regular premium after 3 completed policy years i.e., 30% of all premiums paid excluding 1st year’s premium and any extra.

In case of single premium, the minimum Guaranteed Surrender Value will be 90% of single premium paid excluding any extra. Loan: No Loan facility.

Sample Illustration 1 of Jeevan Ankur policy

Age and Gender

35 years Male

Premium Paying Term

25 years

Annual Premium

Rs. 3,587 (exclusive of

service tax)

Total Premium Paid

Rs.89,675 (exclusive of

service tax)

Sum Assured

Rs.1,00,000

Additional Cover –Rider

Not opted

Guaranteed Death Benefit

Rs.1,00,000 payable

immediately

Plus

Rs.10,000 payable on every

policy anniversary after death

till policy term end

Plus

Rs.1,00,000 and Loyalty

Additions if any payable at the

end of policy term

Total Survival Benefit (at the rate 6%p.a )

Rs. 1,07,500

Sample Illustration 2 of Jeevan Ankur policy

Age and Gender

35 years Male

Premium Paying Term

25 years

Single Premium

Rs. 40,900 (exclusive of

service tax)

Total Premium Paid

Rs.40,900 (exclusive of

service tax)

Sum Assured

Rs.1,00,000

Additional Cover –Rider

Not opted

Guaranteed Death Benefit

Rs.1,00,000 payable

immediately

plus

Rs.10,000 payable on every

policy anniversary after death

till policy term end

Plus

Rs.1,00,000 and Loyalty

Add’ns if any payable at the

end of the policy term

Total Survival Benefit (at the rate 6%p.a )

Rs. 1,09,000

Merits of Jeevan Ankur policy

  • Protection for your family against the uncertainties of life like death, disability and disease.
  • Dual Protection with two sum assured
  • Regular Income in case of death till rest of the policy term

Demerits of Jeevan Ankur policy

  • Low Return
  • High Surrender Charges
  • Low Liquidity

At the end, I would say any Child Life Insurance Plan should be used as a protection tool for nonstop child education. So, protect your child through this best lic policy for children or any other child plan of your choice only if you actually think it is essential in your life. Would be happy to hear your views, please share!!!

About the Author:

Gaurav Gahlout is an Insurance Trainer and CFP with great interest in the field of personal finance. He can be reached at expert@investmentyogi.com

  • manish n shah

    Insted of buying this plan,one should take a term plan for that amount and put remaining amount in bank fd, rd, Final amount will be much more than lic

    • Kranthi Kiran

      What makes you say so Manish? Can you please explain?

    • Deepak Singhal

      people will be glad if Manish can put more calculation etc to prove his point

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