LIC Child Fortune Plus Plan – 194 Review

Introduction on LIC Child Fortune Plus Review

Plan No-194 

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

Minimum premium:

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 :

No limit.

Sum Assured:

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

Maturity Benefit:

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.

Death Benefit:

• 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

Balanced	ULIF003011108LICCHF+BAL512	10.00	20.9551	20.9551	20.9551
Bond	ULIF001011108LICCHF+BND512	10.00	15.8762	15.8762	15.8762
Growth	ULIF004011108LICCHF+GRW512	10.00	24.5051	24.5051	24.5051
Secured	ULIF002011108LICCHF+SEC512	10.00	22.3340	22.3340	22.3340

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.

Single premium:

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 :

ALLOCATION  Charge
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

Additional Information

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.

AUTO COVER:

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.

LOAN:

No loan shall be granted under this plan.

Surrender Value:

• 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.

Benefit Illustartion

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)

											Death Benefit
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
1	40000	1700	38300	346	317	720	0	0	0	40367	314	40054	0	200000	240054	0	40054
2	0	0	0	370	334	240	0	0	0	43309	334	42975	0	200000	242975	0	42975
3	0	0	0	398	359	247	0	0	0	46476	359	46118	46118	200000	246118	0	46118
4	0	0	0	430	385	255	0	0	0	49884	385	49499	49499	200000	249499	0	49499
5	0	0	0	466	413	262	0	0	0	53549	413	53136	53136	200000	253136	0	53136
6	0	0	0	514	444	270	0	0	0	57481	444	57038	57038	200000	257038	0	57038
7	0	0	0	562	476	278	0	0	0	61703	476	61227	61227	200000	261227	0	61227
8	0	0	0	604	511	287	0	0	0	66249	511	65738	65738	200000	265738	0	65738
9	0	0	0	650	549	295	0	0	0	71142	549	70593	70593	200000	270593	0	70593
10	0	0	0	708	589	304	0	0	0	76400	589	75810	75810	200000	275810	0	75810
11	0	0	0	778	633	313	0	0	0	82041	633	81408	81408	200000	281408	0	81408
12	0	0	0	860	680	323	0	0	0	88087	680	87407	87407	200000	287407	0	87407
13	0	0	0	954	730	332	0	0	0	94559	730	93829	93829	200000	293829	0	93829
14	0	0	0	1060	783	342	0	0	0	101482	783	100698	100698	200000	300698	0	100698
15	0	0	0	1180	840	352	0	0	0	108879	840	108039	108039	200000	308039	0	108039
16	0	0	0	1312	902	363	0	0	0	116780	902	115878	115878	200000	315878	0	115878
17	0	0	0	1454	967	374	0	0	0	125218	967	124251	124251	200000	324251	0	124251
18	0	0	0	1610	1036	385	0	0	0	134225	1036	133189	133189	200000	333189	0	133189
19	0	0	0	1780	1111	397	0	0	0	143836	1111	142725	142725	200000	342725	0	142725
20	0	0	0	1960	1190	409	0	0	0	154093	1190	152903	152903	200000	352903	0	152903

Gross Yield: 6%

(All charges are in Rupees)

												Death Benefit
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
1700	38300	346	317	720	0	0	0	38879	307	38572	0	200000	238572	0	38572
0	0	370	315	240	0	0	0	40159	315	39844	0	200000	239844	0	39844
0	0	398	326	247	0	0	0	41465	326	41139	41139	200000	241139	0	41139
0	0	430	336	255	0	0	0	42791	336	42455	42455	200000	242455	0	42455
0	0	466	347	262	0	0	0	44136	347	43789	43789	200000	243789	0	43789
0	0	514	358	270	0	0	0	45485	358	45128	45128	200000	245128	0	45128
0	0	562	368	278	0	0	0	46839	368	46471	46471	200000	246471	0	46471
0	0	604	379	287	0	0	0	48205	379	47826	47826	200000	247826	0	47826
0	0	650	390	295	0	0	0	49578	390	49188	49188	200000	249188	0	49188
0	0	708	401	304	0	0	0	50945	401	50544	50544	200000	250544	0	50544
0	0	778	412	313	0	0	0	52292	412	51880	51880	200000	251880	0	51880
0	0	860	422	323	0	0	0	53603	422	53181	53181	200000	253181	0	53181
0	0	954	433	332	0	0	0	54863	433	54431	54431	200000	254431	0	54431
0	0	1060	442	342	0	0	0	56056	442	55614	55614	200000	255614	0	55614
0	0	1180	452	352	0	0	0	57161	452	56710	56710	200000	256710	0	56710
0	0	1312	460	363	0	0	0	58161	460	57701	57701	200000	257701	0	57701
0	0	1454	467	374	0	0	0	59038	467	58571	58571	200000	258571	0	58571
0	0	1610	474	385	0	0	0	59770	474	59297	59297	200000	259297	0	59297
0	0	1780	479	397	0	0	0	60334	479	59855	59855	200000	259855	0	59855
0	0	1960	483	409	0	0	0	60708	483	60225	60225	200000	260225	0	60225

IN THIS POLICY, THE INVESTMENT RISK IS BORNE BY THE POLICY HOLDER AND THE ABOVE INTEREST RATES ARE ONLY FOR ILLUSTRATION PURPOSE.