Last Updated- June 22, 2020
LIC’s New Children Money Back Plan (Table No. 832) is one of the most popular insurance plans in India which is a non-linked (not linked with stock market), with profits and regular premium payment money back plan. The plan aims to meet various financial needs like education, or the marriage of the child with moneyback returns.
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Benefits and other details of LIC Children Money Back Plan (No.832)
Let’s have a look at the benefits –
Minimum and Maximum Age for Children (Life Insured): 0 to 12 years
Proposer’s age: Minimum – 18 years, Maximum – 55 years (Proposer is parent or guardian who will pay the premium)
Minimum Sum Assured: Rs.1 Lakh
Maximum Sum Assured: No limit
Minimum/Maximum Maturity Age: 25 years
Premium and Policy Term
Policy Term: 25 minus age at entry (Let’s say child’s age is 5 years then the term will be 20 years)
Premium Term: 25 minus age at entry (Let’s say child’s age is 5 years then the term will be 20 years)
New Children Money Back Policy (832) Premium calculator
For instance, assuming a father takes this policy for his 2 years old child and Sum Assured is Rs. 10 lakhs. The premium will be-
Calculation source: Insurancefunda.in
Premium Waiver Benefit (PWB) Rider: Yes, Available as an add-on.
In Premium Waiver Benefit, you can take the risk cover of Proposer who is paying the premium for the policy. In case of his/her death, all the future premiums will be waived off but the child will get all the benefits at maturity.
- Risk coverage starts when Life Assured (Child) turns 8 or after 2 years of policy start whichever completes earlier.
- If the death of Life Assured (child) occurs before the commencement of risk coverage i.e. before the child turns 8, then an amount equal to the total amount of premium paid excluding taxes shall be payable.
- In case, the death of the child occurs after the commencement of risk, then the amount shall be equivalent to
Basic Sum Assured + Simple Reversionary Bonus + Final Additional Bonus
In no case, the death benefit shall be less than 105% of the total premiums paid up to death.
Survival and Maturity Benefits
Age of child
|18 th Year||20 % of Sum Assured|
|20 th Year||20 % of Sum Assured|
|22 nd Year||20 % of Sum Assured|
|25 th Year||40 % of Sum Assur|
Bonus (accrued till date) + Final Addition Bonus
Loan: Loan facility is available after 3 years onwards if premiums paid regularly and the loan should be for the benefit of the Life Assured (child).
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Sum Assured Rebate:
- Up to Rs.1.90 lakhs = Nil
- Rs.2 lakhs to Rs.4.90 lakhs = Rs 2/- per thousand of Basic Sum Assured
- Rs.5 lakhs & above = Rs 3/- per thousand of Basic Sum Assured
- Modes of Premium Payment: All modes i.e. Yearly, Half-yearly, Quarterly, and Monthly.
- Yearly Mode – 2% of Tabular Premium
- Half-Yearly Mode- 1% of Tabular Premium
- Quarterly and Monthly Mode- NIL
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LIC New Children Money Back Plan (No.832)
Let’s understand this with an example, I am assuming Sum Assured is Rs. 10 lakh and the age of the child is 2 years.
Calculation source: Insurancefunda.in
Other benefits of LIC Children Money Back Plan
- You can surrender the policy after paying min. three full-years premium payments.
- The free lookup period is 15 days from the date of receipt. If you are not satisfied with the terms and conditions of the policy, you can cancel the policy within this period along with reasons.
- If the policy has expired, you can revive it within a period of 2 consecutive years from the date of the first unpaid premium and before the maturity date.
- Tax rebate under section 80(C) of Income Tax Act, 1961.
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LIC Children Money Back Plan (Table 832) – Should I buy?
In my opinion, this plan will not suffice the purpose of buying it i.e. securing your child’s future. Life insurance should be for the breadwinner because the family is dependent on him/her. Although there is a benefit of insurance coverage that is worthless as nobody considers the death of the child during the policy term. And to cover the risk of the Proposer, you will have to pay extra on PWB rider.
Along with that, the annual return on this plan is quite low at around 4%-5%. With a meager annual return of 4% to 5%, this plan does not even beat inflation. Moneyback word attracts people but with such a less return, it doesn’t serve the purpose.
Rather, you should invest in other debt instruments like Mutual Funds (ELSS), or Public Provident Fund, and Sukanya Samriddhi Account. That gives a better return than this plan and also gives a tax-free return with 80C deduction on the contribution.
What are your thoughts? Tell me in the comments.