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.
LIC’s New Plan Jeevan Tarun – Returns Calculation
This plan defeats the whole purpose of insurance. I believe that there is no need to do in-depth analysis on this plan. JUST IGNORE BUYING THIS PLAN!
Life insurance premium quote – LIC Jeevan Tarun (Vs) LIC’s Online Term Insurance plan e-Term :
For a Sum Assured of Rs 1 Lakh, the premium amount on Jeevan Tarun policy is Rs 6,375 (as per the illustration on LIC’s website ).
Whereas, a 30 year old individual can opt for LIC e-Term plan of Sum Assured Rs 50 Lakh at a premium rate of Rs 6,950 (policy term 20 years).
My opinion on LIC Jeevan Tarun Child Plan
As per LIC, Jeevan Tarun plan is specially designed to meet the specific expenses such as children’s education, marriage and other future needs.
But, what is the main purpose of investing in child insurance plans? Most of us may say, ‘ I want to secure my child’s future’ (or) I want to accumulate / create a fund to meet my kid’s education or marriage expenses.
- Cost of Education : We all are aware of the rising costs of higher education. Each year, tuition, books and other expenses increase. Education inflation is definitely in the range of 10% to 15%. Do you agree with me? In this scenario, if you choose to invest in this kind of savings cum protection oriented plan, which can generate returns of around 5% to 6% (or max 7%), your main objective (i.e., to secure your kid’s future) will not be met.
- Also, the survival benefits are payable from the 20th year onwards. Normally the college education (graduation) may start from 18th year onwards. The maturity benefit is payable upon the completion of 25th year only. So, this plan does not serve the purpose.
- You will be better off taking a good Term Insurance Plan (Read my article on “Top 7 best Online Term Insurance Plans“) and invest a portion of your savings in different asset categories. These asset categories can be mutual funds, bank deposits, equity (shares), Public Provident Fund, Sukanya Samriddhi Account Scheme… you have plethora of investment options to choose from. (The premium contribution towards a Term plan can be claimed as Tax deduction under Section 80c)
- Defined Investment plans with names like ‘Child plans’ (or) ‘Retirement plans’ may not meet your actual requirements. These kind of defined packages may attract your attention. But, you can create you own portfolio of investments and aim at beating the inflation. Be aware and beware of these kind of Child Plans.
- Also, do note that the returns from these kind of plans are largely dependent on Bonus rates (which are not guaranteed). The bonuses (if any) are accrued and are payable only on maturity of the policy. So, you are losing the benefit of COMPOUNDING factor.
Before buying a life insurance policy, follow these steps;
- Analyze your life insurance requirements. Calculate the required amount of insurance.
- Understand the plan(s) features / benefits.
- Understand the rate of return calculations & assumptions (if any).
- Check if the sum assured is sufficient to cover your life?
- Ask yourself these questions..Is the premium affordable? Can the family members lead the same standard of living in case of any unfortunate event?
And then take a decision to buy or not..
What is your opinion on LIC Jeevan Tarun Plan? Do you think is it worth to invest in this new policy? Do share your views and comments.
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This post was last modified on July 10, 2023 6:43 pm
View Comments
Hi Sreekanth Sir,
Today my wife met one lic agent. He informed one Jeevan Tarun Plan for my son.
My son age. 3.5 Years.
They suggested ,
1 st year monthly payment 2142/- rupees and from 2 nd year monthly payment till end 2104/- rupees.
Then money back will get 18 to 22 years continuously 5 years * 75000/- rupees, and finally 23rd year will get more than 11 lacks.
How is this policy?
Can you suggest me is it good or not and its correct?
Dear DIBIN,
Did you go through above article??
Kindly read:
Traditional life insurance policy - a terrible investment option?
If life is unpredictable, insurance cant be optional!
Best term insurance plans.
sir just give me simple explanation about what I asked to you
Dear DIBIN ..I have given simple explanation in the above article about this plan.
Personally, I would not buy these kind of insurance plans.
Hey shrikant, I want to know that if i purchase jeevan tarun of 600000/- for my 1 year daughter, so how much will be Quarterly premium for that with ST. please reply fast.
Dear seema ..Did you go through the above article?
If your requirement is insurance/life cover, you may kindly consider a Term insurance plan.
Thank you so much Sreekanth for this insightful review. I fully agree with your views on this plan. I was holding back myself from buying this plan for my child because of the exactly same flaws in the plan as pointed out by you. It’s a bad child plan although not all LICI plans are bad. Jeevan Anurag was one of the best child plans brought forth by LICI but sadly the same has been withdrawn for the reason best known to LICI. At present (as on 5.2.17), such a big corporation as LICI surprisingly has only two types of child plans both of which do not fulfill the basic requirements of a child plan as rightly pointed out by you. Hence I would be very grateful if you could kindly suggest some alternative child plans from other insurance companies at my email id. Thank you once again.
Dear Subba,
May I know if you have adequate life cover in your name?
Suggested reading : If life is unpredictable, insurance cant be optional!
Dear Sreekanth,
I read the reviews of Jeevan Tarun Policy. You have given your unbiased and honest openion. Its 100% right. you should not be bothering about LIC agents troubling or abusing you. Your work is appreciated by followers. Please carry on with your blog and ignore these LIC agents. We know how that company is fooling people. We are with you. Majority of the premium paid by us is eaten by these agents and without any effort they suck the profit of company also. Please go ahead
Regards
RAJ
Dear Raj,
Thank you for endorsing my views.
Not all agents are bad, we do need the intermediaries to spread awareness on importance of insurance.
Mis-guiding & miselling need to be stopped.
Hi Shreekanth,
I would like to take a Jeevan Tarun policy for my grandson of age 2 yrs who's in US. What would be the procedure to go for this policy?.
What all documents needs to be submitted?
Also can you please correct if my understanding is correct regarding this policy? I will be the proposer or policyholder and my grandson will be the life assured.
Also can you please suggest if there is any other plans that I can take for my grandson?
Thanks in advance
hi u can cont me on 9335616137 for taking the policy
Dear Mohan,
Kindly let me know if you have read and understood the points listed in the above article.
Your grandson does not require any life cover.
Good work Sreekanth. Keep going.
Dear Sir,
I have a 2.5 year old kid. I am planning to take a insurance policy for him. I have a policy named LIC Jeevan Anand under my name. Plz suggest any good policy for my child.
Also I dont want to be fix with only LIC for insurance. So can we have a faith on another players in the field
Dear Rastogi,
Kindly let me know if you have gone through the above article or not?
Do you have existing life insurance policies in your name?
Hi Srikanth,
Thanks for your unbiased feedback ,One of LIC agent came to my house and explained about Jeevan Labh..he was telling the plan like if I pay around 8L for 16 years ..at 21st year I would receive 23 L it seems.do you think can I believe these figures?I
Dear Giribabu..May I know if you have any existing life insurance policies?
Suggest you to kindly ignore buying these kind of traditional plans.
If your objective is to get decent life cover then buy a Term insurance plan.
Read:
If life is UNPREDICTABLE, insurance can't be optional.
Term insurance Vs Traditional plans.
Best Term insurance plans.
Best Personal Accident insurance plans.
Hi Sreekanth, I do have Term insurance plan for 50L which is SBI Eshield ..LIC agent was explaining this scheme and was unable to decide his figures or correct or not ..What is your suggestion
Dear Giribabu..Suggest you to ignore buying it.
Hi Sreenkanth, Thanks for your suggestion,I have a Jeevan anand policy which is in-force ,half year primum is around 26K and this was taken on 2012 Nov , I have paid 7 half year premiums till now,I would like to go for Paid -up option..Please suggest what is the procedure for paid up ?should I go for Paid up or surrender which is better ?As I have 50L term insurance and 8k SIP MF investments monthly I would like to go for either paid up /surrender . suggest me.
Dear Giribabu,
As the policy is only 3 years old one, suggest you to surrender the policy and re-invest the surrender value amount in decent investment options based on your financial goals.
Read:
How to get rid of unwanted life insurance policy?
Hi ,
If I am looking for only investment option , Which plan is good ?
Dear naegndra ..Kindly read : List of Best investment options in India.
Sir this is sanjay form Mysore ( Karnataka) working as driver, i have one year old son, can you please recommend which plan is better for my son for his education etc, whatever you suggest i will follow you, because i ask some insurance advisor they will suggest from their beneficial point of view, since my earnings is average, so whatever you suggest i will follow, because i dont want my son to be driver like me , please suggest me
Dear Sanjay,
Do you have any life insurance & health insurance policy in your name?
Meanwhile, kindly go through below articles;
If life is unpredictable, insurance can't be optional.
Best Term insurance plans.