LIC Child Plan 734 - Detailed Explanation
The LIC Child Plan 734 is a money-back policy designed to secure a child's future by providing financial support at crucial stages of their life (such as education or marriage).
Key Features of LIC Child Plan 734:
| Feature | Details |
|---|---|
| Policy Term | 25 years minus the age of the child at entry (minimum age: 0 years, maximum: 12 years) |
| Premium Payment Term | Premiums are paid until the child reaches 18 years of age |
| Sum Assured & Benefits |
|
| Bonus | Yearly Simple Reversionary Bonus added to maturity benefit |
| Tax Benefits | Section 80C (premiums) and Section 10(10D) (maturity) |
Example Scenario
Policy Details:
- Child's Age at Entry: 5 years
- Policy Term: 20 years (25 - 5)
- Sum Assured (SA): ₹10,00,000
- Premium Payment Term: 13 years (till child turns 18)
Payout Schedule:
| Age | Policy Year | Benefit Amount |
|---|---|---|
| 18 years | 13th year | 20% of SA = ₹2,00,000 |
| 20 years | 15th year | 20% of SA = ₹2,00,000 |
| 22 years | 17th year | 20% of SA = ₹2,00,000 |
| 25 years (Maturity) | 20th year | 40% of SA + Bonuses ≈ ₹4,00,000 + (₹10L × Bonus Rate × 20 years) |
Total Payouts (Excluding Bonus):
₹2L + ₹2L + ₹2L + ₹4L = ₹10,00,000 (excluding bonuses)
Death Benefit Scenario:
If parent dies during policy term:
- All future premiums are waived
- Child receives full ₹10L + bonuses at predefined payout stages
Who Should Buy This Plan?
- Parents looking for long-term savings for child's education/marriage
- Those who want waiver of premium in case of parent's death
- Investors preferring guaranteed returns + bonuses over market risks
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