LIC Jeevan Tarun

Life Insurance Corporation of India (LIC) is launching a New Child plan called as ‘LIC Jeevan Tarun‘. This new plan from LIC is a traditional, Non-linked, with-profits and Limited Premium Payment Option plan. It also has an optional Money back feature.

In the month of March (2015), LIC had launched New Children’s Money back plan. Jeevan Tarun plan is very similar to it, but it offers more Survival Benefit options to the policyholder.

I am against these kind of so called ‘CHILD PLANS’. Before analyzing the details and returns of this new LIC child policy, if you understand how this child plan works, I am sure you as a parent / guardian of your child, may definitely ignore these kind of meaningless schemes.

Under this plan, you (parent / guardian) are the proposer. Whereas, your kid’s life is covered. Your baby’s life is insured. Sounds stupid? Yes, generally you would like to have a risk cover on your name/life, so that in case of any unfortunate event, your kid / legal heir/ nominee will receive the claim amount.

In this plan, in any unfortunate event (on kid’s death, can’t even imagine this happening!), you (parent) will receive the death benefits. If kid survives till maturity, he/she will receive the money-back payments (survival benefits) at periodic intervals (after 20 years of child’s age)

Unfortunately, if parent dies, kid will receive all survival benefits, only if ‘Premium Waiver Benefit Rider’ is selected.

Its very disappointing and disheartening to see LIC come up with  bad schemes like these. If you are convinced about my views, you may ignore buying this plan. Need more details?…ok..here you go!

Features of LIC Jeevan Tarun Plan

• Minimum & Maximum Entry Age : 90 days to 12 years (Kid’s age)
• Life Assured / Insured : Your kid’s life is insured under this plan
• Proposer’s Minimum / Maximum Age : 18 years / 55 years (Proposer can be Kid’s parent / guardian)
• Policy Term : Maximum upto 25 years of kid’s age. ( 25 years – Age at entry. For example, ff kid’s age is 10 years, policy tenure is 15 years)
• Premium Paying Term (PPT) : Maximum upto 20 years. (20 years – Age at entry. For example, if kid’s age is 10 years, PPT is 10 years)
• Minimum Sum Assured : Rs 75,000
• Maximum Sum Assured : Not Applicable (No limit)
• Premium Waiver Benefit Rider (optional) : Available. (LIC’s Premium Waiver Benefit Rider is available as an optional rider on the life of proposer aged between ages 18 to 55 years by payment of additional premium. In case of death of the proposer, the premiums under the basic plan falling due after the date of death shall be waived.)
• The policy’s maturity amount is payable on completion of 25 years only(insured’s age).
• Depending on the requirement, the proposer (parent / guardian) can choose any of the 4 options for SB (Survival Benefit) payments from 20 to 24 years of age.

LIC’s New Plan – Jeevan Tarun : Death Benefits, Maturity & Survival Benefits details:

• Death Benefit :
  • If death occurs before the commencement of risk, an amount which is equivalent to the premium payments is paid.
  • If death of the proposer occurs after the commencement of risk, death benefit amount which includes ‘Sum Assured on death + Accrued Bonuses + Final Additional Bonus‘ will be paid.(Commencement of risk is linked to kid’s age. If kid’s age is above 8 years, date of commencement of risk is immediate. Sum Assured on death is higher of 10 times of annualized premium or Absolute amount assured to be paid on Death i.e. 125% of Basic Sum Assured.)
• Maturity Benefit: On Survival of the life assured till the end of the policy term, maturity benefit will be paid as below.

Maturity Benefit = Sum Assured on maturity + vested Simple Reversionary Bonuses + Final Additional Bonus (if any)

• Survival Benefits & Maturity Benefit – Options under Jeevan Tarun Policy (Money Back payments) : In this plan, the policy holder can opt for any of the below 4 options.