LIC Jeevan Tarun policy is a non-linked insurance plan for children with guaranteed money back. With this plan, the policyholder will get assured returns while paying limited premiums. It caters to different needs of the children from education to marriage and several other things. There are four maturity options for this policy and the policyholder can also vouch for money back option.
As a part of the survival benefit of the plan, some percentage of the total sum assured will be returned, starting from the 20th birthday of the child and the policy will mature when the child reaches the age of 25. At the time of maturity, the remaining percentage along with revisionary bonus and final addition bonus will be paid off to the insured. The maturity option chosen out of the all four will become the permanent part of the policy and it is not possible to make any change to that in the future.
LIC Jeevan Tarun Key Features
- This is a non-linked traditional limited pay plan.
- The premium for this plan needs to be paid up till the 20th birthday of the child while the policy will mature once the child becomes 25 years of age.
- The risk cover for the child starts from the 8 years of age or the second anniversary of the policy commencement depending on whichever is early.
- There are four maturity options; of which one is for total money back.
- The premium needs to be paid until the child becomes of age 20 but the policy continues till the child becomes 25 years of age. Hence, for the last 5 years of the policy, the premium needs not to be paid while the insured will enjoy some percentage being of the total money assured as survival benefits up till the maturity of the plan. Thus, this plan is called a Limited Pay Plan.
- In the case of unfortunate death of the insured, the nominee will receive a sum as high as 125% of the sum assured as a death benefit.
LIC Jeevan Tarun Policy Benefits
There are basically three main types of benefits that the LIC Jeevan Tarun offers, which are:
- Death Benefit.
- Survival Benefit.
- Maturity Benefit.
On death during policy tenure before the risk of commencement:
In the case of sudden and unexpected death of the life insured, the premiums paid, along with the extra premium and rider premium without charging any interest will be paid to the nominees.
On death during policy tenure after the risk of commencement:
In the case of death of the life assured during the policy tenure, given that all the premiums are paid then the nominee will receive the total sum assured in addition to the revisionary bonus and final addition bonus. The death benefit is usually defined as 10 times or 125% times higher than the total sum insured.
If the policyholder survives till the 20 years of age then the certain percentage of the total amount of money assured will be paid as the survival benefit for the next four years till the maturity of the policy. The sum will be paid on the date of policy anniversary following the 20th birthday of the policyholder. The percentage that is to be paid as the survival benefit will depend on the maturity option chosen.
If the policyholder survives till the maturity of the plan then the rest amount of the sum assured in addition to the revisionary bonus and final additional bonus if applicable will be paid to the life assured.
Waive Rider and Tax benefits
As per the waive rider policy of LIC, the proposer of the policy can get leverage on the payment mode for yearly and half-yearly payments. The tax benefits are also available for this plan. The proposer will get tax benefits on the premiums paid as per the section 80C of the Income Tax Act. The tax benefits will also be applicable for the death benefits ad maturity benefits as per the clause of section 10D of the Income Tax Act.
- The minimum age of entry for the child in LIC Jeevan Tarun has been set as 90 days whereas the maximum age of entry is 12.
- The age of maturity for the policy is 25 years.
- The minimum sum that can be assured is Rs 75000 and there is no maximum limit. Hence, the proposer can assure any amount of money above the minimum limit for the child.
- The policy term is from the age of entry up till the child becomes 25 years of age.
- The premium has to be paid in between the age of entry till the age of 20 of the policyholder. Hence, the minimum premium paying term is 8 years while the maximum PPT is 20 years.
- The premium can be paid annually. Half-yearly, monthly for ECS or by using the SSS mode.
LIC Jeevan Tarun Premium Calculator
As this is a money back plan, Jeevan tarun offers 4 different slabs for premium to be paid
Age of the kid: 6 Years
Sum Assured: Rs. 10,00,000 (10 lakhs)
Case 1: 100% of sum assured on maturity with no survival benefit
Case 2: 75% of sum assured with 5% of sum assured every 5 years
Case 3: 50% of sum assured with 10% of sum assured every 5 years
Case 4: 25% of sum assured with 15% of sum assured every 5 years
P.S: Actual Premium May vary according to Underwriting Rules Applicable.
Revival of the policy
In the case of untimely termination of the Jeevan Tarun plan, the policy can be revived within two consecutive years calculated from the date of unpaid premium before the maturity of the policy by paying the arrears of all the premiums calculated together along with the compound interest upon the sum calculated half yearly. LIC also provides a grace period for paying the premium of 30 days for all payment modes except for the monthly payment to prevent the untimely termination of the policy.
Review of LIC JEEVAN TARUN
This non-linked insurance policy is specially designed to meet the cost of education, marriage and other future needs of the child. But there are issues regarding the benefits which you can understand if you think closely. The inflation in the educational costs has increased to 10-15% whereas the Jeevan Tarun will provide you with 6-7% return on the sum invested. Moreover, the survival benefits will only be available when the child becomes 20 years of age but according to our Indian education system the higher education in the colleges for a child starts from the age of 18 or 19 and the maturity amount will be available once the child becomes 25. Hence, the policy is not efficient enough to meet all the requirements of your child but if you are thinking about the tax saving aspect then there are better policies on the market that can provide you with proper tax exemption. Having said that, it is unwise to label a policy good or bad thus if the policy meets your requirements then you can get a sum assured for your child.