Children Money Back Policy
The CMBP is one of the most popular policies.
In this case, the risk cover starts at the age of 2 years or 7
years after the policy commences operation, whichever is later.
This takes care of the growing needs of the child after he
attains majority. This is ideal for study plans since the money
keeps coming at regular intervals of two years beginning age
–18. The minimum sum assured has to be Rs.25000 while the
upper limit is Rs.15 lacs. Payment of premium ceases after the
child attains the 18 years of age. However, with the option of
annual, six monthly, quarterly premium payments, it allows even
the low and middle-income families to pay up without too much
difficulty. While the policy can be bought to a newborn, the
maximum age for eligibility is 10 years.
This policy will have to be proposed by
either father or mother. It can also be gifted by close
relatives, as single premium policy, but it will have to be
proposed by either parent. It has two very innovative features,
which can be availed of by paying a marginally higher premium.
First is the premium waiver benefit. Under
this, if something were to happen to the proposer of the policy
before the beneficiary child turns 18, all future unpaid
premiums are waived.
The other benefit is a term rider, wherein,
in the case described before, that is the death of the proposer
during the premium paying term, not only do the premium gets
waived, but the family of the proposer also gets a sum
equivalent to 20 percent of the sum assured as benefit. Based on
the mode of payment and the amount of sum assured, this scheme
has two types of rebate.
For the yearly mode of payment, rebate at the
rate of 3 percent of the tabular premium will be provided, while
this would be 1.5 percent of the tabular premium.
For the sum assured Rs 25,000 to Rs 49,999,
rebate of Re 1 per thousand of sum assured be provided while
this would be Rs 2 per thousand of the sum assured in case sum
assured is Rs 50,000 and above.
LIC guarantees payment of additions of Rs 80
per annum per thousand of the sum assured at the end of each
year. This means that each year for the sum assured of Rs 1 lacs,
Rs. 8,000 will be added. This will be payable either at the
maturity on policy anniversary following the attainment of age
26 or on death, if earlier.
In addition to this, loyalty additions will
be given. This will depend on the term and sum assured under the
policy.
Sum assured would be paid in installments of
20 percent on the policy anniversary following the attainment of
age 18, 20 percent at 20 years, 30 percent at 22 and 30 percent
at 24 and at the age of 26 guaranteed and loyalty additions will
be paid.
This scheme does not offer the accident and
permanent disability benefit. No loan is granted under this
policy.
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