Introduction on LIC Child Fortune Plus Review
LIC Child Fortune Plus is a unit linked plan which is a total solution to a child`s education and other needs.Child Fortune plan will be offered to the parents who have a child up to the age of 17 years last birthday and also provides for waiver of all future premiums including outstanding premiums, if any, provided policy is in force. 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.
The plan offers a choice of four investment options: Bond Fund, Secured Fund, Balanced Fund, and Growth Fund; each tailored to different levels of risk and return. The plan offers up to four switches free of charge every year, between the different types of funds.
Child Fortune Plus Plan Parameters
Age at Entry : For life assured – Minimum 18 years completed.
Maximum 55 years NBD
For child – Minimum 0 years LBD
– Maximum 17 years LBD
Maturity age : Maximum Maturity Age 25 years LBD of child or 75 years NBD of life assured,
Whichever is earlier.
Policy term: ( 25 – age at entry of child) or ( 75- age at entry of life assured) ,
whichever is lower.
Mode of payment: Yearly, half-yearly, Quarterly, ECS-Monthly and single
Single premium mode Rs. 25000 and in multiple of 1000/-
From 1/1/2010 ->Rs. 40000 and in multiple of 1000
Yearly, Half-yearly, Qly annualized rs. 10000/- in Multiple of Rs. 1000/-
ECS- monthly Rs. 1000 per month in multiple of Rs. 1000/-
Maximum premium :
Minimum Sum Assured:
|Regular premium policies||5 times the annualized premium|
|Single premium policies||1.25 times the single premium|
Maximum Sum Assured:
|REGULAR PREMIUM Policy|
|AGE AT ENTRY||EMR CLASS||MAXIMUM SA ALLOWED|
|Up to 45 yrs||Standard life||25 times of annualized premium|
|Up to class IV||15 times of annualized premium|
|Class v and VI||10 times of annualized premium|
|Class VII and VIII||5 times of annualized premium|
|Age 46 to 50 yrs||Standard life||15 times of annualized premium|
|Up to class IV||10 times of annualized premium|
|Class V||5 times of annualized premium|
|Age 51 to 55 yrs||Standard life||15 times of annualized premium|
|Up to class III||5 times of annualized premium|
|SINGLE PREMIUM POLICIES|
|AGE AT ENTRY||EMR CLASS||MAXIMUM SA ALLOWED|
|Up to 35 yrs||Standard life||5 times of single premium|
|Up to class IV||5 times of single premium|
|Class v and VI||2.5 times of single premium|
|Class VII and VIII||2.5 times of single premium|
|Age 36 to 45 yrs||Standard life||2.5 times of single premium|
|Up to class II||2.5 times of single premium|
|Class III TO VI||1.25 times of single premium|
|Age 46 to 55 yrs||Standard life||1.25 times of single premium|
|AGE 46 TO 50 YRS||Up to class IV||1.25 times of single premium|
- Sum assured shall be available in multiple of Rs. 5000 and annualized premium shall be payable in multiple of Rs.1000/- where minimum sum assured is not in the multiple of Rs.5000/- , it will be rounded off to the next multiple of Rs.5000/-.
- The plan will be available to all major male and female lives cat I and II only.
- For determining SUC , underwriting limits:
Regular premium policies will be = sum assured + total premium payable during the term of the policy – first premium instalment.
- Single premium policies SUC will be = sum assured less single premium.
LIC Child Fortune Plus Plan Benefits
The maturity benefit will be payable on the earlier of; either the child attaining 25 years of age or the life assured attaining 75 years. On the date of maturity, an amount equal to the policyholder’s fund value is payable.Policyholder may exercise “ settlement option’’ one month prior to the date of maturity. In case ,this option is exercised, the maturity claim under the policy shall not be paid in lump sum. The policyholder shall encash the units held in the policyholders fund in regular instalments( Half-yearly or yearly) or irregular instalments spread over a period of 5 years from the date of maturity.
Policyholder have to exercise the option and in that he/she has to inform how he/she will receive the maturity proceeds.In case of regular installments, the installment shall be the total no of units as on the date of maturity divided by the total no of instalments. (i.e 5 for yearly and 10 for half-yearly). The no. of units arrived at in respect of each instalment will be multiplied by the NAV as on date of instalment payment.
- In the unfortunate event of death of the policy holder, the nominee child will be paid the Sum Assured under the policy. Further all future premiums will be waived and units equivalent thereof shall be credited to the policy fund account at the applicable unit price.The policy shall continue on till death of child or maturity of policy.
- In case of death of the life assured during the policy term, after the death of the child, sum assured plus policyholder’s 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 policy – total premiums paid under the policy, shall be payable to the nominee/legal heirs, as the case may be, immediately. Policy shall terminate.
Child Fortune Policy is with compulsory benefit of PWB( premium waiver benefit). This means 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.
Other benefits of LIC child Fortune Plus Plan
1. INVESTMENT FUND TYPE AND SWITCHING OVER OF FUND:
The premium allocated to purchase units will be invested according to the investment pattern prescribed for different fund type
1) Bond fund 2) Secured fund 3) Balanced fund 4) Growth fund.
|Fund Type||Launch Date:01/11/2008|
2. ALLOCATION OF PREMIUM:
Allocation is done as per percentage given under single premium and regular premium policies. The unit fund premium is utilized for arriving at the no of units by dividing it by the applicable NAV rate. No. of units are to be rounded off upto 3 decimals. Further, unit capital will be always 10 times of the no. of units. The difference between NAV and face value of the unit i.e Rs.10/- will be credited /debited to unit capital premium A/c.
|PREMIUM BAND||ALLOCATION CHARGE|
|REGULAR POLICIES||CEIS – STAFF|
|UP TO 10,00,000||4.25%||1.20%|
|10,00,001 AND ABOVE||4.00%||0.95%|
Regular premium i.e yearly, half-yearly, quarterly, ecs-monthly :
|REGULAR POLICIES||CEIS -STAFF POLICIES|
|Premium band( per annum)||FIRST YEAR||2ND AND 3RDYEAR||THEREAFTER||FIRSTYEAR||THEREAFTER|
|10000 to 1,00,000||29.00%||5.00%||2.50%||5.20%||Nil|
|1,00,001 to 1,50,000||28.505||5.00%||2.50%||4.70%||Nil|
|1,50,001 to 2,00,000||28.00%||5.00%||2.50%||4.20%||Nil|
|2,00,001 and above||27.50%||5.00%||2.50%||3.70%||Nil|
ALLOCATION CHARGES FOR TOP-UP PREMIUM 1.25% FOR ALL YEARS.
3. Recovery of charges and frequency of charges:
Sum of all charges should not be deducted from allocated amount, but no. of units
will be deducted. The total no. of units to be deducted will be calculated as:
=total amount of following charges/ Applicable NAV rate as per time applicable/( no. of units to be cancelled will be calculated up to 3 decimals) .
Charges under LIC Child Fortune plan
1.Mortality (life cover) charges and premium waiver benefit charge( applicable in case of
regular premium policies only):
Life cover charge and premium waiver benefit charge will be taken every month by cancelling the policyholder’s fund value appropriately. These charges will be deducted till the life assured is alive. Mortality charges ,during policy cover, will be based on the age of life assured NBD as at the policy anniversary coinciding with or immediately preceding the due date of cancellation of units and hence may increase every year on each policy anniversary.
Life cover charge and PWB charge will be charged combined on ‘sum assured under the policy + total amount of outstanding future premiums’ as on date of deduction of charges.
2. Policy Administration Charges:
Policy administration charges of Rs.60/- per month during the first policy year and Rs 20/-per month thereafter for 2nd year of the policy will be deducted by canceling appropriate no. of units out of policyholders’ fund value. From the 3rd year onwards, policy administration charge will be Rs.20/- per month escalating at 3% p.a. till the end of policy term.
3. SERVICE TAX CHARGE :
A service tax charge shall be levied on the charges for mortality, policy administration charge, and shall be taken canceling appropriate no. of units out of policyholders fund value on monthly basis, as and when above charges are deducted. For information about Tax on Life Insurance Policies www.taxqueries.in
DAYS OF GRACE:
A grace period of 1 calendar month but not less than 30 days will be allowed for payment of YLY/HLY/QLY premiums and 15 days for Monthly-ECS. If premium is not paid within days of grace, policy will lapse.
Under auto cover benefit , where regular premiums mode policies, if premium is not paid within days of grace, the policy will lapse, but with certain conditions , life cover will be continued.Under regular premium policies, where at least 3 full years premiums have been paid fully, then auto cover period will be continued to provide risk cover+ PWB for life assured .
REVIVAL OF POLICY:
The period during which the policy can be revived will be called “ period of revival”.
- Where premiums have been paid for less than 3 years, the revival shall be made on the submission of proof of continued insurability i.e evidence of good health and the payment of arrears of premium without interest.
- Where premiums have been paid for at least 3 years or more , policy may be revived without any evidence of health + arrears of premiums without interest.
No loan shall be granted under this plan.
- Partial withdrawal/Surrender:
Surrender value is payable only after completion of 3 policy years under both single and regular premium policies.
- Compulsory Surrender:
If premiums have been paid for less than 3 years ( not exactly 3 years) and further premiums have discontinued and policy is not revived during the period of 2 years of revival period, the policy shall be terminated after completion of 3 years from date of commencement of policy or on expiry of revival period, whichever is later.
- Full Surrender Value and surrender charge:
The policyholder will have an option to surrender the policy only after completion of 3 policy years both under single and regular premium policies. There is no need to pay 3 years premium for getting surrender value.
Name of the Product:LIC’s Child Fortune Plus
Amount of Instalment Premium: 40000
Policy Term : 20 Years
Age LA: 35
Premium Paying Term: 1
Age of Child: 5
Mode of Premium Payment : Single
Sum Assured : 200000
Funds opted for: Growth Fund
Service Tax rate: 10.30%p.a
Statement of Various charges along with growth of the fund expected over the duration of the policy with assumed rate of interest as mentioned
Gross Yield : 10.00%
Net Yield: 8.42%
(All charges are in Rupees)
|PolicyYear||SinglePremium||PremiumAllocation Charge||Amount Availablefor investment( out of premium )||MortalityCharge||Service tax||Policy AdminCharge||Guarantee Charge||Other Charges||Addition toFund (if any)||Fund before FMC||FMC||Fund at End||SurrenderValue||(i)On Death of LA while Child is alive||(iv)On Death of Child after the death of LA||(iii)On Death of Child while LA is alive||(iv)On Death of Child after the death of LA|
Gross Yield: 6%
(All charges are in Rupees)
|PremiumAllocation Charge||Amount Availablefor investment( out of premium )||MortalityCharge||Service tax||Policy AdminCharge||Guarantee Charge||Other Charges||Addition toFund (if any)||Fund before FMC||FMC||Fund at End||SurrenderValue||(i)On Death of PLA while SLA is alive||(ii)On Death of PLA after the death of SLA||(iii)On Death of SLA while PLA is alive||(iv)On Death of SLA after the death of PLA|
IN THIS POLICY, THE INVESTMENT RISK IS BORNE BY THE POLICY HOLDER AND THE ABOVE INTEREST RATES ARE ONLY FOR ILLUSTRATION PURPOSE.