LIC offers various child insurance plans, such as LIC New Children’s Money Back Plan and LIC Jeevan Tarun, which are designed to secure a child’s future education and financial needs.
Benefits of LIC Child Education Plan
- Financial Security: LIC child education plans provide financial security to parents by ensuring that funds are available for their child’s education, even if the parent is no longer around to provide for them. In case of the parent’s demise during the policy term, a lump sum or periodic payouts are made to the child or nominee.
- Structured Savings: These plans encourage disciplined savings as they require regular premium payments. This can help parents accumulate a significant sum over the policy term to meet educational expenses.
- Maturity Benefit: Most child education plans provide a maturity benefit, which is a lump sum amount payable to the policyholder or the child when the policy reaches its maturity date. This can be used to fund higher education or other expenses.
- Partial Withdrawals: Some child education plans offer the flexibility of partial withdrawals during the policy term, allowing policyholders to access funds for important milestones in their child’s education.
- Accumulation of Bonuses: Many LIC plans participate in the profits of the corporation, and policyholders receive bonuses declared by LIC. These bonuses add to the policy’s overall value and can boost the savings component.
- Income Tax Benefits: Premiums paid under child education plans are typically eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the maturity or death benefit received is often tax-exempt under Section 10(10D), subject to certain conditions.
- Riders: Policyholders may have the option to add riders to their child education plans for enhanced coverage. Riders can provide additional protection against accidents, disabilities, or critical illnesses.
- Flexible Policy Terms: LIC child education plans often offer a range of policy terms, allowing parents to choose the duration that best aligns with their child’s expected educational needs.
- Choice of Sum Assured: Parents can select the sum assured (coverage amount) based on their financial goals and the estimated cost of their child’s education.
- Death Benefit: In case of the untimely demise of the policyholder, the child education plan typically ensures that the child’s education goals are not compromised. The nominee or child receives the death benefit, ensuring financial stability.
- Options for Guaranteed Payouts: Some plans offer guaranteed payouts at specific intervals during the policy term, ensuring that funds are available at critical junctures in the child’s education journey.
- Fulfillment of Educational Aspirations: These plans are designed to help parents fulfill their child’s educational aspirations by providing a source of funds for tuition, books, accommodation, and other educational expenses.