Children Incurance Plan (Final Data)

8/2/2019 Children Incurance Plan (Final Data)

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CHILDRENS PLANS OF

LIC


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EXICUTIVE SUMMERY

Insurance business has emerged as one of the prominent areas of financial

services during recent times particularly in developing economies where it could not

grow much prior to globalization. Insurance performs remarkable functions by insuring

the insurable public and property located at different places. In view of its great

significance in economic operations it has comprehensively networked itself in almost all

parts of the society today.

In the first chapter there is information about the insurance and the history of the

insurance. In simple terms it is a contract between the person who buys Insurance and an

Insurance company who sold the Policy. The Greeks and Romans introduced the origins

of health and life insurance c. 600 AD when they organized guilds called "benevolent

societies" which cared for the families and paid funeral expenses of members upon death.

In the third chapter there are information about the Life Insurance or life

assurance is a contract between the policy owner and the insurer, where the insurer agreesto pay a designated beneficiary a sum of money upon the occurrence of the insured

individual's or individuals' death or other event, such as terminal illness or critical illness.

In the third chapter there are information about the Life Insurance Corporation of

India and its history, nationalization, current status, technology usage and objectives of

the company.

In the chapter forth there is information about how child plans work and how

regular payment works, etc. The opening of the insurance sector offers ample

opportunities to both existing as well as new players to penetrate into untapped areas,

sectors and sub-sectors and unexploited segments of population as presently both

insurance density and penetration are at a low level.
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In the chapter fifth there is information about the child insurance plans dynamics of

planning for the child's future has changed radically over the years. The conventional method

of providing for the child was to just set aside some amount of money in a savings bank

account. These funds would then be utilized for the child's life stages.

In the chapter sixth there is information about the childrens assurance plans;

there are special provisions to cover contingencies before the deferred date.

In the last chapter i.e. in seventh one there is information about the types of child

insurance policies which includes Child as a Policyholderand Parent as a Policyholder

and child as Beneficiary. Child as a Policyholder there are Jeevan Kishore, Jeevan

Sukanya & Jeevan Balya policies. And in the Parent as a Policyholder and child as

Beneficiary there are Bal Vidya, Jeevan Anurag, Children's Deferred Endowment

Assurance Plan At 21&18, Jeevan Kishore, Child Career Plan, Child Fortune Plus,

Komal Jeevan, Marriage Endowments or Educational Annuity Plan, Jeevan Chhaya,

Child Future Plans. And the types information about the charges, surrender value,

maturity date, etc.

As mentioned earlier, insurance penetration broadly measures the significance of

insurance industry in relation to a countrys entire economic productivity. It indicates

importance of insurance industry in the national economy as a whole. On the other hand,

insurance density reflects upon the countrys insurance purchasing power.


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INDEX

Chapter

No.

CHAPTER NAME Page No.

1. DEFINITION AND MEANING OF INSURANCE 5-7

2. LIFE INSURANCE AND

LIFE INSURANCE CORPORATION OF INDIA

8-13

3 INSURANCE PLANS FOR CHILD'S 25-33

4 TYPES OF INSURANCE PLANS 34-52

QUESTIONER 64

CONCLUSION 65

BIBLIOGRAPHY 66


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CHAPTER 1

DEFINITIONAND

MEANING OFINSURANCE

CHAPTER 1


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DEFINITION AND MEANING OF INSURANCE

Insurance in its basic form is defined as A contract between two parties whereby one

party called insurer undertakes in exchange for a fixed sum called premiums, to pay the

other party called insured a fixed amount of money on the happening of a certain event."

In simple terms it is a contract between the person who buys Insurance and an Insurance

company who sold the Policy. By entering into contract the Insurance Company agrees to

pay the Policy holder or his family members a predetermined sum of money in case of

any unfortunate event for a predetermined fixed sum payable which is in normal term

called Insurance Premiums.

Insurance is basically a protection against a financial loss which can arise on the

happening of an unexpected event. Insurance companies collect premiums to provide for

this protection. By paying a very small sum of money a person can safeguard himself and

his family financially from an unfortunate event.

There are different kinds of Insurance Products available such as Life Insurance, Vehicle

Insurance, Home Insurance, Travel Insurance, Health or Medical Insurance etc.

History of insurance
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In some sense we can say that insurance appears simultaneously with the appearance of

human society. We know of two types of economies in human societies: money

economies (with markets, money, financial instruments and so on) and non-money or

natural economies (without money, markets, financial instruments and so on). The second

type is a more ancient form than the first. In such an economy and community, we can

see insurance in the form of people helping each other. For example, if a house burns

down, the members of the community help build a new one. Should the same thing

happen to one's neighbor, the other neighbors must help? Otherwise, neighbors will not

receive help in the future. This type of insurance has survived to the present day in some

countries where modern money economy with its financial instruments is not widespread.

The Greeks and Romans introduced the origins of health and life insurance c. 600 AD

when they organized guilds called "benevolent societies" which cared for the families and

paid funeral expenses of members upon death. Guilds in the middle Ages served a similar

purpose. The Talmud deals with several aspects of insuring goods. Before insurance was

established in the late 17th century, "friendly societies" existed in England, in which

people donated amounts of money to a general sum that could be used for emergencies.

Englands first fire insurance company, the 'Insurance Office for Houses', at the back of

the Royal Exchange. Initially, 5,000 homes were insured by Barbon's Insurance Office.

CHAPTER 2
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LIFE INSURANCE

AND

LIFE INSURANCECORPORATION OF

INDIA

CHAPTER 2

LIFE INSURANCE


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Life insurance or life assurance is a contract between the policy owner and the insurer,

where the insurer agrees to pay a designated beneficiary a sum of money upon the

occurrence of the insured individual's or individuals' death or other event, such as

terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated

amount called a premium at regular intervals or in lump sums. There may be designs in

some countries where bills and death expenses plus catering for after funeral expenses

should be included in Policy Premium. In the United States, the predominant form simply

specifies a lump sum to be paid on the insured's demise.

As with most insurance policies, life insurance is a contract between the insurer and the

policy owner whereby a benefit is paid to the designated beneficiaries if an insured event

occurs which is covered by the policy.

The value for the policyholder is derived, not from an actual claim event, rather it is the

value derived from the 'peace of mind' experienced by the policyholder, due to the

negating of adverse financial consequences caused by the death of the Life Assured.

To be a life policy the insured event must be based upon the lives of the people named in

the policy.

Insured events that may be covered include:

Serious illness

Life policies are legal contracts and the terms of the contract describe the

limitations of the insured events. Specific exclusions are often written into the

contract to limit the liability of the insurer; for example claims relating to suicide,

fraud, war, riot and civil commotion.

Life-based contracts tend to fall into two major categories:
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Protection policies - designed to provide a benefit in the event of specified event,

typically a lump sum payment. A common form of this design is term insurance.

Investment policies - where the main objective is to facilitate the growth of

capital by regular or single premiums. Common forms (in the US anyway) are

whole life, universal life and variable life policies.

1.1. Overview

1 Parties to contract

There is a difference between the insured and the policy owner (policy holder), although

the owner and the insured are often the same person. For example, if Joe buys a policy on

his own life, he is both the owner and the insured. But if Jane, his wife, buys a policy on

Joe's life, she is the owner and he is the insured. The policy owner is the guarantee and he

or she will be the person who will pay for the policy. The insured is a participant in the

contract, but not necessarily a party to it.

The beneficiary receives policy proceeds upon the insured's death. The owner designates

the beneficiary, but the beneficiary is not a party to the policy. The owner can change the

beneficiary unless the policy has an irrevocable beneficiary designation. With an

irrevocable beneficiary, that beneficiary must agree to any beneficiary changes, policy

assignments, or cash value borrowing.

1.2 Contract terms

Special provisions may apply, such as suicide clauses wherein the policy becomes null if

the insured commits suicide within a specified time (usually two years after the purchase
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date; some states provide a statutory one-year suicide clause). Any misrepresentation by

the insured on the application is also grounds for nullification. Most US states specify

that the contestability period cannot be longer than two years; only if the insured dies

within this period will the insurer have a legal right to contest the claim on the basis of

misrepresentation and request additional information before deciding to pay or deny the

claim.

The face amount on the policy is the initial amount that the policy will pay at the death of

the insured or when the policy matures, although the actual death benefit can provide for

greater or lesser than the face amount. The policy matures when the insured dies or

reaches a specified age (such as 100 years old).

1.3 Costs, insurability, and underwriting

The insurer (the life insurance company) calculates the policy prices with intent to fund

claims to be paid and administrative costs, and to make a profit. The cost of insurance is

determined using mortality tables calculated by actuaries. Actuaries are professionals

who employ actuarial science, which is based in mathematics (primarily probability and

statistics). Mortality tables are statistically-based tables showing expected annualmortality rates. It is possible to derive life expectancy estimates from these mortality

assumptions. Such estimates can be important in taxation regulation.

The three main variables in a mortality table have been age, gender, and use of tobacco.

The mortality tables provide a baseline for the cost of insurance. In practice, these

mortality tables are used in conjunction with the health and family history of the

individual applying for a policy in order to determine premiums and insurability.
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The insurance company receives the premiums from the policy owner and invests them to

create a pool of money from which it can pay claims and finance the insurance company's

operations. Contrary to popular belief, the majority of the money that insurance

companies make comes directly from premiums paid, as money gained throughinvestment of premiums can never, in even the most ideal market conditions, vest enough

money per year to pay out claims.[citation needed] Rates charged for life insurance

increase with the insurer's age because, statistically, people are more likely to die as they

get older.

Given that adverse selection can have a negative impact on the insurer's financial

situation, the insurer investigates each proposed insured individual unless the policy is

below a company-established minimum amount, beginning with the application process.

Group Insurance policies are an exception.

Underwriters will determine the purpose of insurance. The most common is to protect the

owner's family or financial interests in the event of the insurer's demise. Other purposes

include estate planning or, in the case of cash-value contracts, investment for retirement

planning. Bank loans or buy-sell provisions of business agreements are another

acceptable purpose.

Life insurance companies are never required by law to underwrite or to provide coverage

to anyone, with the exception of Civil Rights Act compliance requirements. Insurance

companies alone determine insurability, and some people, for their own health or lifestyle

reasons, are deemed uninsurable. The policy can be declined (turned down) or rated.
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Rating increases the premiums to provide for additional risks relative to the particular

insured. Underwriting practices can vary from insurer to insurer which provide for more

competitive offers in certain circumstances.

1.4 Death proceeds

Upon the insured's death, the insurer requires acceptable proof of death before it pays the

claim. The normal minimum proof required is a death certificate and the insurer's claim

form completed, signed (and typically notarized). If the insured's death is suspicious and

the policy amount is large, the insurer may investigate the circumstances surrounding the

death before deciding whether it has an obligation to pay the claim.

Proceeds from the policy may be paid as a lump sum or as an annuity, which is paid over

time in regular recurring payments for either a specified period or for a beneficiary's

lifetime.

1.5 Insurance vs. Assurance

The specific uses of the terms "insurance" and "assurance" are sometimes confused. In

general, in these jurisdictions "insurance" refers to providing cover for an event that

might happen (fire, theft, flood, etc.), while "assurance" is the provision of cover for an

event that is certain to happen. "Insurance" is the generally accepted term; however,

people using this description are liable to be corrected. In the United States both forms of

coverage are called "insurance", principally due to many companies offering both types

of policy, and rather than refer to themselves using both insurance and assurance titles,

they instead use just one.
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2 Types of life insurance

Life insurance may be divided into two basic classes temporary and permanent or

following subclasses - term, universal, whole life and endowment life insurance.

2.1 Temporary Term Insurance

Term assurance provides life insurance coverage for a specified term of years in

exchange for a specified premium. The policy does not accumulate cash value. Term is

generally considered "pure" insurance, where the premium buys protection in the event of

death and nothing else.

There are three key factors to be considered in term insurance:

1. Face amount (protection or death benefit),

2. Premium to be paid (cost to the insured), and

3. Length of coverage (term).

Various insurance companies sell term insurance with many different combinations of

these three parameters. The face amount can remain constant or decline. The term can be

for one or more years. The premium can remain level or increase. A common type of

term is called annual renewable term. It is a one year policy but the insurance company

guarantees it will issue a policy of equal or lesser amount without regard to the

insurability of the insured and with a premium set for the insured's age at that time.

Another common type of term insurance is mortgage insurance, which is usually a level

premium, declining face value policy. The face amount is intended to equal the amount of

the mortgage on the policy owners residence so the mortgage will be paid if the insured

dies.
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2.2 Permanent Life Insurance

Permanent life insurance is life insurance that remains in force (in-line) until the policy

matures (pays out), unless the owner fails to pay the premium when due (the policy

expires OR policies lapse). The policy cannot be canceled by the insurer for any reason

except fraud in the application, and that cancellation must occur within a period of time

defined by law (usually two years). Permanent insurance builds a cash value that reduces

the amount at risk to the insurance company and thus the insurance expense over time.

This means that a policy with a million dollar face value can be relatively expensive to a

70 year old. The owner can access the money in the cash value by withdrawing money,

borrowing the cash value, or surrendering the policy and receiving the surrender value.

The four basic types of permanent insurance are whole life, universal life, limited pay and

endowment.

2.2.1 Whole life coverage

Whole life insurance provides for a level premium, and a cash value table included in the

policy guaranteed by the company. The primary advantages of whole life are guaranteed

death benefits; guaranteed cash values, fixed and known annual premiums, and mortality

and expense charges will not reduce the cash value shown in the policy. The primary

disadvantages of whole life are premium inflexibility, and the internal rate of return in the

policy may not be competitive with other savings alternatives. Also, the cash values are

generally kept by the insurance company at the time of death, the death benefit only to

the beneficiaries. Riders are available that can allow one to increase the death benefit by

paying additional premium. The death benefit can also be increased through the use of

policy dividends. Dividends cannot be guaranteed and may be higher or lower than

historical rates over time. Premiums are much higher than term insurance in the short-

term, but cumulative premiums are roughly equal if policies are kept in force until

average life expectancy.
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2.2.2. Universal life coverage

Universal life insurance (UL) is a relatively new insurance product intended to provide

permanent insurance coverage with greater flexibility in premium payment and the

potential for a higher internal rate of return. There are several types of universal life

insurance policies which include "interest sensitive" (also known as "traditional fixed

universal life insurance"), variable universal life insurance, and equity indexed universal

life insurance.

A universal life insurance policy includes a cash account. Premiums increase the cash

account. Interest is paid within the policy (credited) on the account at a rate specified by

the company. Mortality charges and administrative costs are then charged against

(reduce) the cash account. The surrender value of the policy is the amount remaining in

the cash account less applicable surrender charges, if any.

2.2.3. Limited-pay

Another type of permanent insurance is Limited-pay life insurance, in which all the

premiums are paid over a specified period after which no additional premiums are due to

keep the policy in force. Common limited pay periods include 10-year, 20-year, and paid-

up at age 65.

2.2.4. Endowments

Endowments are policies in which the cash value built up inside the policy, equals the

death benefit (face amount) at a certain age. The age this commences is known as the

endowment age. Endowments are considerably more expensive (in terms of annualpremiums) than either whole life or universal life because the premium paying period is

shortened and the endowment date is earlier. Endowment Insurance is paid out whether

the insured lives or dies, after a specific period (e.g. 15 years) or a specific age (e.g. 65).
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2.2.5. Accidental Death

Accidental death is a limited life insurance that is designed to cover the insured when

they pass away due to an accident. Accidents include anything from an injury, but do not

typically cover any deaths resulting from health problems or suicide. Because they only

cover accidents, these policies are much less expensive than other life insurances.

It is also very commonly offered as "accidental death and dismemberment insurance",

also known as an AD&D policy. In an AD&D policy, benefits are available not only for

accidental death, but also for loss of limbs or bodily functions such as sight and hearing,

etc.

Accidental death and AD&D policies very rarely pay a benefit; either the cause of death

is not covered, or the coverage is not maintained after the accident until death occurs. To

be aware of what coverage they have, an insured should always review their policy for

what it covers and what it excludes.

3. Related Life Insurance Products

Riders are modifications to the insurance policy added at the same time the policy is

issued. These riders change the basic policy to provide some feature desired by the policy

owner. A common rider is accidental death, which used to be commonly referred to as

"double indemnity", which pays twice the amount of the policy face value if death results

from accidental causes, as if both a full coverage policy and an accidental death policy

were in effect on the insured. Another common rider is premium waiver, which waives

future premiums if the insured becomes disabled.

Joint life insurance is either a term or permanent policy insuring two or more lives with

the proceeds payable on the first death or second death.
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Survivorship life: is a whole life policy insuring two lives with the proceeds payable on

the second (later) death.

Single premium whole life: is a policy with only one premium which is payable at the

time the policy is issued.

Modified whole life: is a whole life policy that charges smaller premiums for a specified

period of time after which the premiums increase for the remainder of the policy.

Group life insurance: is term insurance covering a group of people, usually employees

of a company or members of a union or association. Individual proof of insurability is not

normally a consideration in the underwriting. Rather, the underwriter considers the size

and turnover of the group, and the financial strength of the group. Contract provisions

will attempt to exclude the possibility of adverse selection. Group life insurance often has

a provision that a member exiting the group has the right to buy individual insurance

coverage.

Senior and preneed products: Insurance companies have in recent years developed

products to offer to niche markets, most notably targeting the senior market to address

needs of an aging population. Many companies offer policies tailored to the needs of

senior applicants. These are often low to moderate face value whole life insurance

policies, to allow a senior citizen purchasing insurance at an older issue age an

opportunity to buy affordable insurance. This may also be marketed as final expense

insurance, and an agent or company may suggest (but not require) that the policy

proceeds could be used for end-of-life expenses.

Preneed (or prepaid) insurance policies: are whole life policies that, although available

at any age, are usually offered to older applicants as well. This type of insurance is

designed specifically to cover funeral expenses when the insured person dies. In many

cases, the applicant signs a refunded funeral arrangement with a funeral home at the time

the policy is applied for. The death proceeds are then guaranteed to be directed first to the
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funeral services provider for payment of services rendered. Most contracts dictate that

any excess proceeds will go either to the insured's estate or a designated beneficiary.

4. Investment policies

Some policies allow the policyholder to participate in the profits of the insurance

company these are with-profits policies. Other policies have no rights to participate in the

profits of the company, these are non-profit policies.

With-profits policies are used as a form of collective investment to achieve capital

growth. Other policies offer a guaranteed return not dependent on the company's

underlying investment performance; these are often referred to as without-profit policies

which may be construed as a misnomer.

Investment Bonds

Investment bonds, also known as insurance bonds, are long term, tax-effective investment

options. They are issued by life insurance companies and enable investors to invest in a

variety of funds that are managed by professional fund managers investment bonds are

used for making one-off, lump sum investment.

An added feature of investment bonds is that they include an element of life insurance

and can be viewed as single-premium life insurance policies. When an investment bond is

taken out, the investors life is insured and the investor has to nominate a beneficiary.

5. Annuities

An annuity is a contract with an insurance company whereby the insured pays an initial

premium or premiums into a tax-deferred account, which pays out a sum at pre-

determined intervals. There are two periods: the accumulation (when payments are paid

into the account) and the annuitization (when the insurance company pays out). IRS rules
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restrict how you take money out of an annuity. Distributions may be taxable and/or

penalized.

6. Criticism

Although some aspects of the application process (such as underwriting and insurable

interest provisions) make it difficult, life insurance policies have been used in cases of

exploitation and fraud. In the case of life insurance, there is a motivation to purchase a

life insurance policy, particularly if the face value is substantial, and then kill the insured.

Usually, the larger the claim, and/or the more serious the incident, the larger and more

intense will be the number of investigative layers, consisting in police and insurer

investigation, eventually also loss adjusters hired by the insurers to work independently.
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LIFE INSURANCE CORPORATION OF INDIA

The Life Insurance Corporation of India (LIC) is the largest life insurance company in

India; it is fully owned by the Government of India. It was founded in 1956.

Headquartered in Mumbai, which is considered the financial capital of India, the Life

Insurance Corporation of India currently has 8 zonal Offices and 101 divisional offices

located in different parts of India, at least 2048 branches located in different cities and

towns of India along with satellite Offices attached to about some 50 Branches, and has a

network of around one million and 200 thousand agents for soliciting life insurance

business from the public.

History

The Oriental Life Insurance Company, the first corporate entity in India offering life

insurance cover was established in Calcutta in 1818 by Bipin Behari Dasgupta and others.

Europeans in India were its primary target market, and it charged Indians heftier

premiums. The Bombay Mutual Life Assurance Society, formed in 1870, was the first

native insurance provider.

The Life Insurance Act and the Provident Fund Act were passed in 1912, providing the

first regulatory mechanisms in the Life Insurance industry. The Indian Insurance

Companies Act of 1928 authorized the government to obtain statistical information from

companies operating in both life and non-life insurance areas. The subsequent Insurance

Act of 1938 brought stricter state control over an industry that had seen several

financially unsound ventures fail. A bill was also introduced in the Legislative Assembly

in 1944 to nationalize the insurance industry.

Nationalization
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In 1955, parliamentarian Ferozi Gandhi raised the matter of insurance fraud by owners of

private insurance companies. In the ensuing investigations, one of India's wealthiest

businessmen, Ram Kishan Dalmia, owner of the Times of India newspaper, was sent to

prison for two months. Eventually, the Parliament of India passed the Life Insurance of

India Act on 1956-06-19, and the Life Insurance Corporation of India was created on

1956-09-01, by consolidating the life insurance business of 245 private life insurers and

other entities offering life insurance services. Nationalization of the life insurance

business in India was a result of the Industrial Policy Resolution of 1956, which had

created a policy framework for extending state control over at least seventeen sectors of

the economy, including the life insurance. The company began operations with 5 zonal

offices, 33 divisional offices and 212 branch office.

Current status

Over its existence of around 50 years, Life Insurance Corporation of India, which

commanded a monopoly of soliciting and selling life insurance in India, created huge

surpluses, and contributed around 7 % of India's GDP in 2006.

The Corporation, which started its business with around 300 offices, 5.6 million policies

and a corpus of INR 459 million, has grown to 2,048 offices servicing around 180 million

policies and a corpus of over INR 3.4 trillion.
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The organization now comprises 2048 branches, 100 divisional offices and 8 zonal

offices, and employs over 1 million agents. It also operates in 12 other countries,

primarily to cater to the needs of Non Resident Indians.

With the change in the India's economic philosophy from the early 1990s, and the

subsequent relaxation of state control over several sectors of the economy, the

monopolistic position of the Life Insurance Corporation of India was diluted, and it has

had to compete with a number of other corporate entities, Indian as well as transnational

Life Insurance brands.

In the fiscal year 2006-07 Life Insurance Corporation of India's number of policy holders

are said to have crossed a whopping 200 million (fourth in terms of population of the

countries of the world) Some top agents include Praveen Ranawat Baliwala, Suraj

Kumari Jain who give wonderful and exceptional Service to the clients. Also they are

very honest and dedicated towards their Work. They are Chairman Club Members.

Technology usage

The insurance giant opted for internet services for all its subscribers and developed

massive networking for own usage and internal governance. While the pros and cons of

internal networking remains concealed within the officials and hidden for the common

customers, the customer portal somehow fails to satisfy the 21st century customers.

Apparently, low bandwidth, unwise web page hyper linking, illogical page set ups, all

just contribute to the irritation of common net age customers.

The portal gives opportunity to register any policy to be tagged up with any one. As a

matter of fact, if Mr. 'A' knows the policy number and premium value of certain policy

'X' of Mr. 'B,' 'A' can tag up 'X' with his own Profile in LICI portal and get all the details

of the policy. Moreover, though the organization is officially known as Life Insurance

Corporation of India, abbreviated, LICI, the portal welcomes a customer to LIC. As a

result of all these, online payment of premium through the site could not be a popular
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option for the customers. The site fails to show the details of all its recognized agents in

its Agent locator section.

Objectives of LIC of India

Spread Life Insurance widely and in particular to the rural areas and to the

socially and economically backward classes with a view to reaching all insurable

persons in the country and providing them adequate financial cover against death

at a reasonable cost.

Maximize mobilization of people's savings by making insurance-linked savings

adequately attractive. Bear in mind, in the investment of funds, the primary obligation to its

policyholders, whose money it holds in trust, without losing sight of the interest

of the community as a whole; the funds to be deployed to the best advantage of

the investors as well as the community as a whole, keeping in view national

priorities and obligations of attractive return.

Conduct business with utmost economy and with the full realization that the

moneys belong to the policyholders.

Act as trustees of the insured public in their individual and collective capacities.

Meet the various life insurance needs of the community that would arise in the

changing social and economic environment.

Involve all people working in the Corporation to the best of their capability in

furthering the interests of the insured public by providing efficient service with

courtesy.

Promote amongst all agents and employees of the Corporation a sense of

participation, pride and job satisfaction through discharge of their duties with

dedication towards achievement of Corporate Objective.


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CHAPTER 3

CHILDINSURANCE

PLANS

CHAPTER 4


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INSURANCE PLANS FOR CHILD'S FUTURE

Life insurance plans help in servicing various needs in an individual's financial planning

exercise. One such need happens to be planning for his children's future. Children's

insurance plans help in addressing many of these needs.

While individuals might have a financial plan for themselves in place, it is equally

important that they secure the financial future of their children. For example, suppose an

individual wants to plan for his son's education. A child plan will serve in achieving thisgoal. An illustration will help understand this better.

How child plans work

Sum assured (Rs) 500,000

Age of parent (Yrs) 30

Tenure (Yrs) 22

Annual premium (Rs) 24,000

Maturity amt (@ 6%) (Rs) 319,000

Maturity amt (@ 10%) (Rs) 662,000

Suppose an individual is aged 30 years and has a son who is one year old today. He wants

to plan for his child's education. He would like to receive a fixed sum of money (say

around Rs 100,000) at regular intervals when his son would need it the most i.e. while he

is still pursuing his education.


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In our example, the individual would like to get regular payouts when his son is nearing

graduation (i.e. around 21 years of age). The payouts will help in funding his child's

graduation as well as his post-graduate studies. In addition, he will also like to buy some

life cover for himself in case of an unfortunate eventuality so that his son can continue on

the career path chosen for him without any struggle.

The plan chosen by the individual is for a sum assured of Rs 500,000 for which the

annual premium is Rs 24,000. In case of an eventuality to the individual, his son will

stand to receive the sum assured (i.e. Rs 500,000). He will also receive any bonus

additions that have accrued over the policy tenure.

In addition to the payouts above, this child plan also offers a waiver of premium rider

along with the basic plan. In the event of an eventuality, the family of the insured will not

be burdened with future premium payments on the child plan - the insurance company

will make the premium payments towards the plan. This will go a long way in securing

the financial future of the child as well as relieving the family from financial worries.

How regular payouts work

Age of child (Yrs) Amount receivable (Rs)

19 125,000

20 100,000

21 100,000

22 100,000

23 100,000

The plan chosen by the individual will also help him achieve his goal of regular payouts

once his son crosses his 19th birthday. On that day, the son will receive 25 per cent of the

sum assured i.e. Rs 125,000 in our example. From thereon, the individual will keep


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receiving 20 per cent of the sum assured (i.e. Rs 100,000) every year over the next four

years.

In addition to this, the individual will also stand to receive guaranteed additions plus

bonuses on maturity. The maturity amount in our illustration is approximately Rs 319,000

(@ 6 per cent assumed growth rate) / 662,000 (@10 per cent assumed growth rate). The

maturity amount can help fund the child's post-graduate studies.

Child plans differ across insurance companies. For example, if an individual wants to

plan for say, his daughter's marriage, then he can opt for a child plan that gives him a

lump sum on maturity as opposed to regular payouts. Child plans can also be taken for

building seed capital for his son's future business requirements. Individuals should

therefore evaluate their options with care to secure their child's future.


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CHILD INSURANCE PLANS

Planning does not necessarily mean about what you wish your child wouldgrow up to be, or have certain characteristics, but it also essentially means you as a

responsible parent having various obligations to fulfill that would help him to grow

better in this world.

The first thing that strikes is providing for education (graduation as well as

post graduation).

The most often repeated statement, Assume that a two year MBA program in a

leading business school costs Rs 5 , 00,000 at present. Your child is five years old now and

will pursue the management degree at the age of 20 years. This gives you a time frame of 15

years. Assuming that the inflation rate is 10% per annum, the education would cost Rs

2,088,624. Now that seems a handful, doesn't it?

The dynamics of planning for the child's future have changed radically over the years.

The conventional method of providing for the child was to just set aside some amount of

money in a savings bank account. These funds would then be utilized for the child's life

stages. A few parents would also make investments in fixed deposits with the intention of

utilizing the maturity amount. However, it would be safe to say that such an approach is not

only outdated, but also inadequate in the present scenario.

Life insurance plays an important role in an individual's financial planning

exercise. Insurance can assist individuals in planning for their own life stages as well as

provide for their child's future. It also secures the childs future in case of any unfortunate event.

Various types of child insurance products are available in the market today.

Child insurance plans have traditionally played an important role in securing the child's

future. With a plethora of children insurance plans available in the market, it becomes


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difficult for most parents to evaluate them objectively. Individuals need to understand the

dynamics for planning their children so that they can best utilize the alternatives available in

the market.

Parents must consider at the outset that they would have to build as sufficient corpus for

their children especially if the child is to be sent abroad for education or a professional post

graduation degree from the premier institutes in the country itself. As in our above example, a 15

year planning time frame has raised the amount required considerably; parents must keep this

in mind.

As a parent, one would generally plan from the perspective of making funds available for

Education

Marriage

Seed capital for business

The factors to consider while planning,

Time frame for building a corpus

Age at which the fund would be required.

Approximate amounts to build the corpus.

Investment avenues to be considered.

The amount available to the child in case of death of parents or disability of the

premium-paying parent.


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CHILDRENS ASSURANCE PLANS

Prior to nationalization of life insurance business in 1956 and of a long period

afterwards, childrens assurance plans like the childrens assurance plan, provided risk

cover on life of the child after it had attained age of 18 years. The coverage of risk of the

child was not immediate, primarily because of heavy mortality in childhood.

Insurance covering risk on the lives of children was also not encouraged because

of lack of need for insurance at that stage. Death of a child, who is not earning, does not

place the family at a financial loss. With the improvement of health services in our

country, it is observed that the rate of mortality amongst children is reducing. More

statistics about children mortality is now available and hence it is possible to grant risk

cover plans to children at lower ages.

Since last few years L.I.C. has started offering risk cover plans like limited

payment whole life, an endowment assurance plan from the age of 12 years and money

back plan from the age of 13 years (completed). New+ plans have been specially

designed for children where the risk of the child starts much earlier, say 7 years. Risk

cover may not begin when the policy is issued. The date on which the risk may begin iscalled the deferred date and the period between the deferred date and the date of

commencement of policy is called the deferred period.

As children cannot enter into contract, policies on the lives of children are taken

out by other elders. After some time, when the child becomes major and is competent to

contract, the child may assume the ownership of the policy, either by a specific action of

doing so or automatically by virtue of the provisions of the policy. The policy is then said

to vest in the child. The date on which this happens is called the testing date. On the

testing date, the life insured must have completed 18 years of age.


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(a) Childrens Deferred Assurance PlanThis plan enables a parent or a legal guardian or a relative of the child to provide

a sum for the child by way of a very low premium. It is an endowment assurance plan

with profits the risk for which commences at a selected age.

The policy is in two stages, one covering the period from the date of commencement of

the policy to the deferred date a (the date of commencement of risk on the childs life)

and the other covering the period from the deferred date on which policy emerges as a

claim either by death or on maturity of the policy. A combined policy is issued covering

both the stages. The plans offer two options as regards the age of commencement of the

risk which may be 18 or 21 of the child.

Age at entry : 0-17(when risk starting age 21)

0-14(when risk starting age 18)

Minimum deferred period: 4 years

Sum assured

Minimum : Rs. 20,000

Maximum : twice the sum of the insurance of parents

The main advantage of this plan is that policy for a relatively large amount can betaken for a relatively low premium. This premium will continue even after the deferred

date, irrespective of the state of health of the child then. The proposer has the option to

say that the policy will not continue after the deferred date. In that case, the policy

terminates on that date and cash payment is made to the proposer.

With a view to making life assured, viz., the child, the absolute owner of the policy

after the deferred date, a special provision is made by which the policy automatically

vests in the life assured on the deferred date. Thereafter, the life assured becomes the

absolute owner of the policy. The policy is deemed to be a contract between the insurance

company and the life assured. That is why the testing age has to be at least 18 years.

Otherwise, the assured would remain a minor and there cannot be a valid contract with

the assured.


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(a)Childrens deferred assurance Plan (New)While testing age cannot be earlier than 18, the deferred date (when risk on the life

assured commences) can be earlier than 18. In such cases, deferred date will be different

from the testing date. Under the new childrens deferred assurance plans, children

between the ages of 5 and 11 years are insured, with the risk commencing at age 12.

Under Childrens Assurance Plans, there are special provisions to cover contingencies

before the deferred date. Premiums may be waived if proposer dies before testing date.

the proposer, different from the life assured, can terminate the policy, in which case the

premium will be refunded, subject to conditions. If the life assured dies before the

deferred date, the benefits (return of premiums) follow different specifications.

Participation in surplus normally will commence after the deferred date but can be

effective retrospectively from an earlier date. There are variations in these matters

between different policies.

Advantages of child insurance policies:

When compared with other investment avenues, child insurance policies have some

advantages.

The claims are made out to the children and not to the parents.

They provide for disciplined and committed payment of premiums throughout the

policy period.

There is no liquidity points like loans against policies etc., which ensures the

corpus saved cannot be diverted for any other cause.

The maturity claims are made only at the predetermined periods, thus ensuring a

guaranteed receipt of the money when they are really needed.

The payouts/maturities can be worked out at the beginning only as per the need.

Finally, because of the risk cover provided under these policies, they ensure with

or without the policyholder, the goal will definitely be achieved.


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CHAPTER 4

TYPES OFINSURANCE PLANS

CHAPTER 4

TYPES OF INSURANCE PLANS


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The various children insurance plans available in the market, not only provide the

basic risk cover that is an essential requirement of a long term plan, also provides a very

good tax advantage. It is also be very clear that the risk cover under these policies should

clearly be on the earning parents and childs life should not be covered.

The other LIC Plans for children are as follows:

Child as a Policyholder:

(a)Jeevan Kishore

Under the Jeevan Kishore Plan, children between the ages 1 and 12 years (age last

birthday) are eligible to be insured. Risk commences either two years after the date of

commencement or from the policy anniversary falling immediately after the completion

of 7 years of age, whichever is later. If the childs age is 11 or 12 years when the policy is

taken, the risk will commence at age 12.

(b)Jeevan Sukanya

The Jeevan Sukanya is a limited premium-paying plan on the life of the female child.

Deferment period in the policy is as in the case of jeevan kishore. When she gets married,

the risk cover is extended to the life of her husband, risk on husbands life commencing

three months after marriage, or one month after intimation of marriage or on attainment

of age 20 by the life assured, whichever is the latest. Under this plan premiums will cease

on attainment of age 20 by the life assured. Maturity is at age 50

(c)Jeevan Balya

This plan provides for a monthly income to the child up to the age 21 in case of the

unfortunate death of the parent.


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Parent as a Policyholder and child as Beneficiary:

1. Bal Vidya

Most parents however may not be satisfied with what they provide to the child. They

may aspire to give the child financial security, the best of education and support for

the launch of a carrier. This is where LICs Bal Vidya comes in hand by:

It provides not only life insurance for the breadwinner but also financial

security to the child.

Money in regular monthly instalments and in lump sums at specific

points of time.

These can take care of most of the expenses of the family- on school,

college and professional education, health care, starting a career, etc.

2 Jeevan Anurag

Benefits

LICs Jeevan ANURAG is a with profits plan specifically designed to take care of the

educational needs of children. The plan can be taken by a parent on his or her own life.

Benefits under the plan are payable at prespecified durations irrespective of whether the

Life Assured survives to the end of the policy term or dies during the term of the policy.

In addition, this plan also provides for an immediate payment of Basic Sum Assured

amount on death of the Life Assured during the term of the policy.

Assured Benefit:

Payment of 20% of the Basic Sum Assured at the start of every year during last 3 policy

years before maturity. At maturity, 40% of the Basic Sum Assured along with


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reversionary bonuses declared from time to time on full Sum Assured for the full term

and the Terminal bonus, if any shall be payable. For example, if term of the policy is 20

years, 20% of the Sum assured will be payable at the end of the 17th,18th, 19th year and

40% of the Sum Assured along with the reversionary bonuses and the terminal bonus, if

any, at the end of the 20th year.

Death Benefit:

Payment of an amount equal to Sum Assured under the basic plan immediately on the

death of the life assured.

Eligibility conditions and other restrictions

For basic plan

Age at entry: Age of the Life Assured- 20 to 60 years (age nearest birthday)

Age of the Life Assured at maturity: Maximum 70 years (age nearest birthday)

Term: All terms from 10 to 25 years. In case of single premium mode minimum term

shall be 5 Years.

Minimum Sum Assured: Rs. 50,000 /-

Maximum Sum assured: No limit. Sum Assured will be in multiples of Rs.5 , 000 /-only.

Mode: Yearly, Half-yearly, Quarterly, Monthly or through salary deductions in case of

regular premiums

For term assurance rider

Age at entry: Age of the Life Assured- 20 to 50 years (age nearest birthday)

Age of the Life Assured at maturity: Maximum 60 years (age nearest birthday) Term: NIL

Minimum Sum Assured: Rs. 1, 00,000 /-

Maximum Sum assured: An amount equal to the Sum Assured under Basic Plan subject

to the maximum of Rs. 25 lakh overall limit taking all term assurance riders availed under


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all existing policies of the life assured and the term assurance rider under the new

proposal into consideration.

Mode: NIL

The Term Assurance Rider Sum Assured will be in multiples of Rs.25, 000 /-.

For critical illness rider

Age at entry: Age of the life Assured- 20 to 50 years (age nearest birthday)

Age of the Life Assured at maturity: Maximum 60 years (age nearest birthday)

Term: NIL

Minimum Sum Assured: Rs. 50,000 /-

Maximum Sum assured: An amount equal to the Sum Assured under Basic Plan subject

to the maximum of Rs. 5 lakh overall limit taking all critical illness riders availed under

all existing policies of the life assured and the critical illness rider under the new proposal

into consideration.

Mode: NIL.

The Critical Illness Rider Sum Assured will be in multiples of Rs.10,000 /-.

Premium optionOptions of payment of premium:

Following premium paying terms are offered:

(i) Single Premium- One Year

(ii) Regular Premium payable during (n-3) Years, where n is the policy term

(iii) Regular Premium payable throughout the policy term.

3 Children's Deferred Endowment Assurance Plan

At 21&18


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Features

Product Summary:

This is an Endowment Assurance plan designed to enable a parent or a legal guardian or

any near relative of the child (called proposer) to provide insurance cover on the life of

the child (called life assured). The plan has two stages, one covering the period from the

date of commencement of policy to the Deferred Date (called deferment period) and the

other covering the period from the Deferred Date to the date of maturity. The insurance

cover on the childs life starts from the Deferred Date and is available during the latter

period.

The Deferred Date in case of Plan No 41 is the policy anniversary date coinciding with or

next following the date on which the child completes 21 years of age. In case of Plan No

50 it is the policy anniversary date coinciding with or next following the 18th birthday of

the child.

Premiums:

Premiums are payable yearly, half-yearly, quarterly or monthly and this shall cease on the

death of the life assured. Premiums are waived on death of Proposer provided this benefit

is availed.

Bonuses:

This is a with- profits plan and participates in the profits of the Corporations life

insurance business after the deferred date. It gets a share of the profits in the form of

bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually

at the end of each financial year. Once declared, they form part of the guaranteed benefits

of the plan.

Benefits


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Death Benefit:

The Sum Assured along with vested bonuses is payable in a lump sum upon the death of

the life assured after the deferrement period. If death occurs before the deferrement

period all premiums paid is refunded.

Maturity Benefit:

Sum assured along with all bonuses declared up to maturity date is payable in lump sum.

Supplementary/Extra Benefits:

These are the optional benefits that can be added to your basic plan for extra

protection/option. An additional premium is required to be paid for these benefits.

Surrender Value:

Buying a life insurance contract is a long-term commitment. However, surrender values

are available on the plan on earlier termination of the contract.

4 Jeevan Kishore

Features

Product summary:


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This is an Endowment Assurance Plan available for children of less than 12 years of age.

The policy may be purchased by any of the parent/grand parent.

Commencement of risk cover:

The risk commences either after 2 years from the date of commencement of policy or

from the policy anniversary immediately following the completion of 7 years of age of

child, whichever is later.

Premiums:

Premiums are payable yearly, half-yearly, quarterly or monthly throughout the term of

the policy or till earlier death of child.

Bonuses:

This is a with- profits plan and participates in the profits of the Corporations life

insurance business. It gets a share of the profits in the form of bonuses. Simple

Reversionary Bonuses are declared per thousand Sum Assured annually at the end of

each financial year. Once declared, they form part of the guaranteed benefits of the plan.

A Final (Additional) Bonus may also be payable provided policy has run for certain

minimum period.

Benefits

Death Benefit:


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The Sum Assured along with vested bonuses, if any, is payable in a lump sum upon the

death of the life assured after the commencement of the risk. If death occurs before the

commencement of the risk, the premiums paid excluding the premiums for the Premium

Waiver Benefit, if any, will be refunded.

Maturity Benefit:

Sum assured along with all bonuses declared during the policy term is payable in a lump

sum on survival to the end of the policy term.

Premium Waiver Benefit:

This is an optional benefit that can be added to your basic plan. An additional premium

is required to be paid for this benefit. By payment of this additional premium, the

proposer can secure the benefit of cessation of premiums from his/her death to the end of

the deferment period. The deferment period for this purpose is to be taken as 18 minus

age at entry of child.

5 Child Career Plan

Features

Introduction:

This plan is specially designed to meet the increasing educational and other needs of

growing children. It provides the risk cover on the life of child not only during the policy

term but also during the extended term (i.e. 7 years after the expiry of policy term). A

number of Survival benefits are payable on surviving by the life assured to the end of the

specified durations.


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Options:

You may choose Sum Assured (S.A.), Maturity Age, Policy Term, Mode of Premium

payment and Premium Waiver Benefit.

Payment of Premiums:

You may pay the premiums regularly at yearly, half-yearly, quarterly or through Salary

deductions over the term of policy. Premiums may be paid either for 6 years or upto 5

years before the policy term.

Mode and High S.A. Rebates:

Mode Rebate:

Yearly mode 2% of Tabular Premium

Half-yearly mode 1% of the tabular premium

Quarterly & Salary deduction NIL

Sum Assured Rebate:

Sum Assured Rebate (Rs.)

1,00,000 to 2,99,999 Nil

3,00,000 to 4,99,999 1.5 %o S.A.

5,00,000 and above 2 %o S.A.


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(ii) On death during the Extended Term - Sum Assured is payable.On death (before the Date of Commencement of Risk) - All the premiums paid

(excluding extra premium and premium for premium waiver benefit, if any,) along with

interest of 3% p.a compounding yearly shall be payable.

Eligibility Conditions and Other Restrictions:

(a) Minimum Entry Age 0 years (last birthday)

(b) Maximum Entry Age 12 years (last birthday)

(c) Minimum Maturity Age 23 years (last birthday)

(d) Maximum Maturity Age 27 years (last birthday)

(e) Minimum Sum Assured Rs. 1,00,000

(f) Maximum Sum Assured Rs. 100,00,000

(g) Policy term 11 to 27 years

(h) Premium Paying term 6 years and Policy term less 5 years

Surrender Value:

You may surrender the policy for cash after at least three full years premiums have been

paid. The Guaranteed Surrender Value will be as under:

i. Before commencement of risk: 90% of the total amount of premiums (excluding

premiums for the first year) paid.

ii. After commencement of risk: 90% of the total amount of premiums (excludingpremium for the first year) paid before commencement of risk and 30% of

premiums paid on and after the commencement of risk.

The Guaranteed Surrender value calculated above will be subject to the deduction of the

total amount of survival benefits that might have become due on or before the date of

surrender. Further all extra premiums and/or any other premium including premium for


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Premium Waiver Benefit shall not be considered in the premiums refunded.The cash

value of any existing vested bonuses, if any, will also be paid if not paid earlier.

Corporation may, however, pay Special Surrender value as the discounted value of Paid

up value and existing vested bonus, if not paid earlier, as applicable on date of surrender.

The Special Surrender value will be subject to the deduction of the survival benefits

which have become due on or before the date of surrender.

The Special Surrender value will be payable provided the same is higher than Guaranteed

Surrender value.

Grace Period:

A grace period of one calendar month but not less than 30 days will be allowed for

payment of premiums.

Cooling-off period:

If you are not satisfied with the Terms and Conditions of the policy you may return the

policy to us within 15 days.

6 Child Fortune Plus

Features

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS

BORNE BY THE POLICYHOLDER

LICs Child Fortune Plus is a unit linked plan which offers you a solution to meet your

childs educational and other needs. You can insure yourself under this plan if you are the


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parent of a child upto the age of 17 years last birthday in case of single premium policies

and age of 10 years last birthday in case of regular premium policies. The child named

under the policy shall be the nominee. There will not be any insurance coverage on the

life of the child, but the policy will be allowed based on the age of the child. The policy

will continue till the child attains the age of 25 years last birthday or till you (life assured)

attain the age of 75 years nearest birthday, whichever is earlier.

You can pay the premiums either in lump sum (single premium) or regularly throughout

policy term. The death benefit under the policy shall be the Sum Assured. You can

choose the level of cover (Sum Assured) within the limits, which will depend on whether

the policy is a Single premium or Regular premium contract, your age and the amount of

premium you agree to pay. In addition, for regular premium policies, in case of death of

the life assured during the term of the policy, the plan also provides for waiver of all

future premiums including outstanding premiums, if any, provided life cover is in force.

You will also have an option to make additional investments under the policy through

Top-up premiums.

Four types of investment Funds are offered. Premiums paid after allocation charge will

purchase units of the Fund type chosen. The Unit Fund is subject to various charges and

value of units may increase or decrease, depending on the Net Asset Value (NAV).

Payment of Premiums:

You may pay premiums regularly at yearly, half-yearly, quarterly or monthly (through

ECS mode only) intervals over the term of the policy. Alternatively, a Single premium

can be paid.

Eligibility Conditions and Other Restrictions:


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(a) Minimum Age at entry for Life

Assured

18 years (age last birthday)

(b) Maximum Age at entry for Life Assured 55 years (age nearer birthday)

(c) Minimum Age at entry for child 0 years (age last birthday)

Regular premium [10] last birthday

Single premium [17] last birthday

(d) Maximum Maturity Age [25] last birthday of child or [75] nearest

birthday of life assured, whichever is

earlier

(e) Policy Term (25 age last birthday at entry of life

assureds child) or (75 - age nearest

birthday at entry of life assured),

whichever is lower

(f) Minimum Premium:

Regular Premium Policies (other than

monthly (ECS) mode):

Rs. [10,000] p.a

Regular premium (for monthly (ECS)

mode):

Rs. [1,000] p.m

Single Premium Policies: Rs. [40,000] p.a.

(g) Sum Assured- Single Premium:

Minimum Sum assured 1.25 times the single premium

Maximum Sum assured 5 times of the single premium if age at

entry is upto 35 years

2.5 times of the single premium if age at

entry is from 36 to 45 years

1.25 times of the single premium if age at

entry is 46 years and above.

Regular Premium:


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Minimum Sum assured: 5 times the annualized premium.

Maximum Sum assured: 25 times of the annualized premium if age at entry is upto 45

years 15 times of the annualized premium if age at entry is 46 years and above.

Where the minimum Sum Assured is not in the multiples of Rs. 5,000, it will be rounded

off to the next multiple of Rs. 5,000. Annualized Premiums shall be payable in multiple

of Rs. 1,000 for other than ECS monthly. For monthly (ECS), the premium shall in

multiples of Rs. 250/-.

The benefits payable under the policy in different contingencies during the above

said period shall be as under:

A) In case of death of Life Assured, if the child is alive: Sum Assured shall be paid to

the nominee and payment of all future premiums due under the policy (in case of regular

premium policies) shall be waived. Units equivalent to an amount equal to all future

premiums including outstanding premiums, if any, (i.e. sum total of all premiums payable

under the policy total premiums paid under the policy) shall be credited to the

policyholders fund. The units shall be allocated at the unit price applicable for the fund

type opted for under the policy on the date of notification of death. The policy shall

continue.

B) In case of death of the Life Assured, after the death of the child: Sum Assured plus

Policyholders Fund Value together with an amount equal to all future premiums

including outstanding premiums, if any, (i.e. sum total of all premiums payable under the

policytotal premiums paid under the policy) shall be payable to the nominee/ legal heir,

as the case may be, at that time and the policy shall terminate.

C) In case of death of child before life assureds death: The policy will continue till

maturity or till the life assured survives, which ever is earlier.


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D) In case of death of child after life assureds death: An amount equal to the Fund

Value of units shall be payable to the legal heir of life assured and the policy shall

terminate.

E) On maturity: The Policyholders Fund Value.

F) In case of Surrender (including Compulsory Surrender): The Policyholders Fund

Value. The Surrender value, however, shall be paid only after the completion of 3 policy

years.

G) In case of Partial Withdrawals: Partial withdrawals shall be allowed subject to a

minimum balance of two annualized premiums in the Policyholders Fund Value.

Where at least 3 years premiums are not paid, and the policy lapses, the Life Cover and

Premium Waiver Benefit cover shall cease and no charges for these benefits shall be

deducted. However, deduction of all the other charges shall continue. The benefits under

such a lapsed policy shall be payable as under:

H) In case of Death of Life Assured: The Policyholders Fund Value.

I) In case of Surrender (including Compulsory Surrender): Policyholders Fund

Value / monetary value of units, as the case may be, shall be payable after the completion

of the third policy anniversary. No amount shall be payable within 3 years from the date

of commencement of policy.

Risks borne by the Policyholder:

a.LICs Child Fortune Plus is a Unit Linked Life Insurance product which is different

from the traditional insurance products and is subject to the risk factors.

b. The premium paid in Unit Linked Life Insurance policies are subject to investment

risks associated with capital markets and the NAVs of the units may go up or down based


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on the performance of fund and factors influencing the capital market and the

policyholder is responsible for his/her decisions.

c. Life Insurance Corporation of India is only the name of the Insurance Company and

LICs Child Fortune Plus is only the name of the unit linked life insurance contract and

does not in any way indicate the quality of the contract, its future prospects or returns.

d. Please know the associated risks and the applicable charges, from your Insurance agent

or the Intermediary or policy document of the insurer.

e. The various funds offered under this contract are the names of the funds and do not in

any way indicate the quality of these plans, their future prospects and returns.

f. All benefits under the policy are also subject to the Tax Laws and other financial

enactments as they exist from time to time.

Cooling off period:

If you are not satisfied with the Terms and Conditions of the policy, you may return the

policy to us within 15 days. The amount to be refunded in case the policy is returned

within the cooling-off period shall be determined as under:

Value of units in the Policyholders Fund Plus unallocated premium. Plus Policy

Administration charge deducted less charge @ Rs.0.20per thousand Sum Assured under

Basic plan Less Actual cost of medical examination and special reports, if any.


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Benefits

A)Death Benefit:

On death of Life Assured, if the child is alive:

The nominee child shall get the Sum Assured. Also, in case of regular premium policy,

when the cover is in full force, payment of all future premiums due under the policy

including outstanding premiums, if any, shall be waived. Units equivalent to an amount

equal to all future premiums including outstanding premiums, if any, (i.e. sum total of all

premiums payable under the policy total premiums paid under the policy) shall be

credited to the policyholders fund. The units shall be allocated at the unit price

applicable for the fund type opted for under the policy on the date of notification of

death. The policy shall continue.

On death of the Life Assured, after the death of the child:

Sum Assured plus Policyholders Fund Value together with an amount equal to all future

premiums including outstanding premiums, if any, (i.e. sum total of all premiums payable

under the policytotal premiums paid under the policy) shall be payable to the nominee/

legal heir, as the case may be, at that time and the policy shall terminate.

On death of child before life assureds death:

The policy will continue till maturity or till the life assured survives, which ever is

earlier.

On death of child after life assureds death:

An amount equal to the Fund Value of units shall be payable to the legal heir of life

assured and the policy shall terminate.


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B)Maturity Benefit:

On the Life Assured or child surviving the maturity date of the contract, an amount equal

to the Policyholders Fund Value is payable.

Surrender:

The Surrender value, if any, is payable only after completion of the third policy

anniversary both under Single and Regular Premium contracts. The surrender value will

be the Policyholders Fund Value at the date of surrender. There will be no Surrender

charge.

The policy can be surrendered by Life Assured. After the death of Life Assured during

the policy term, the policy can be surrendered by the nominee (the child named under the

policy) if he/she is major or by the appointee (in case the nominee is a minor) subject to

an undertaking given by the appointee that the policy is surrendered solely for the benefit

of minor child named in the policy. If you apply for surrender of the policy within 3 years

from the date of commencement of policy, then the Policyholders fund value shall be

converted into monetary terms. No charges shall be made thereafter and this monetary

amount shall be paid on completion of 3 years from the date of commencement of policy.

In case of death of the policyholder after the date of surrender but before the completion

of 3 years from the date of commencement of policy the monetary value payable on

completion of 3 years shall be payable to the nominee/ legal heir of life assured on the

date of notification of death.


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7 Komal Jeevan

Features

Product summary:

This is a Children's Money Back Plan that provides financial protection against death

during the term of plan with periodic payments on survival at specified durations. This

plan can be purchased by any of the parent or grand parent for a child aged 0 to 10 years.

Commencement of risk cover:

The risk commences either after 2 years from the date of commencement of policy or

from the policy anniversary immediately following the completion of 7 years of age of

child, whichever is later.

Premiums:

Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary

deductions, as opted by you, up to the policy anniversary immediately after the life

assured (child) attains 18 years of age or till the earlier death of the life assured.

Alternatively, the premium may be paid in one lump sum (Single premium).


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Benefit:

Survival Benefit:

The percentage of sum assured as mentioned below will be paid on survival to the end of

specified durations:

On the policy anniversaryimmediately following the

Life assured attains the ageof

% of Sum Assured

18 years 20%

20 years 20%

22 years 30%

24 years 30%

Death Benefit:

In case of death of the life assured before the commencement of risk, the policy shall

stand cancelled and premiums paid (excluding the Premium for Premium waiver Benefit)

under the policy will be refunded. However, if death occurs after the commencement of

risk but before the policy matures, the full Sum Assured plus Guaranteed Additions

together with Loyalty Additions, if any, is payable.

Maturity Benefit:

The Guaranteed Additions together with Loyalty Additions, if any, is payable in a lump

sum on survival to the end of the policy term.


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Premium Waiver Benefit:

This is an optional benefit that can be added to your basic plan. An additional premium

is required to be paid for this benefit. By payment of this additional premium, the

proposer can secure the benefit of cessation of premiums from his/her death to the end of

the deferment period. The deferment period for this purpose is to be taken as 18 minus

age at entry of child.

Surrender Value:

Buying a life insurance contract is a long-term commitment. However, surrender value is

available on the plan on earlier termination of the contract.

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3 years or more. The

Guaranteed Surrender Value before the date of commencement of risk is 90% of the

premiums paid excluding the premiums paid during the first year and any extra premium

paid. After the date of commencement of risk, the Guaranteed Surrender Value is 90% of

the premiums paid before the date of commencement of risk excluding the premiums

paid during the first year and any extra premium paid plus 30% of the premiums paid

after the date of commencement of risk.

8 Marriage Endowments or Educational Annuity Plan

Features

A plan suitable for making provision for start in life, marriage or education of children.

Risk coverage for the breadwinner.

A plan with-profits


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Product summary:

This is an Endowment Assurance plan that provides for benefits on or from the selected

maturity date to meet the Marriage/Educational expenses of the named child.

Premiums:

Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary

deductions, as opted by you, throughout the term of the policy or earlier death.

Bonuses:

This is a with-profit plan and participates in the profits of the Corporations life insurance

business. It gets a share of the profits in the form of bonuses. Simple Reversionary

Bonuses are declared per thousand Sum Assured annually at the end of each financial

year. Once declared, they form part of the guaranteed benefits of the plan. Such bonuses

are to be added till maturity even if the life assured dies before the maturity date. Final

(Additional) Bonus may also be payable provided a policy is of a certain minimum term.

9 Jeevan Chhaya

Features

This is an ideal policy to make provision for a childs higher education.

Money back paid in instalments starting three years proceeding the year of

maturity.

A with -profit plan.

Product summary:

This is an Endowment Assurance plan that provides financial protection agai

Documents

Children Incurance Plan (Final Data)