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LIC Plan for NRI Child

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Life Insurance Corporation (LIC) has made its mark as the provider of some of the best policies for Indians and the diaspora. Based in Bahrain, LIC International provides a variety of Investment plans for children’s education and marriage as well as your retirement. One of the exclusive services for NRIs is that they can get their policies serviced at any LIC branch in India. 

This article, in particular, sheds light on the LIC policies for an NRI child. Such LIC plans are designed to financially secure the NRI children’s professional development in the UAE. Read further to know more about the policies.

Professional Education Plan

A child’s personality development and career growth are the primary concerns that most NRI parents have. However, to create a strong future for their children, parents need to design a solid financial plan that ensures the availability of funds for their children when required. 

To cater to these needs, LIC International offers Professional Education Plan. This LIC policy for NRI children is a cashback plan, where the sum assured is payable in instalments once the child attains the ages as mentioned below –

  • 20% of the sum assured paid when the child turns 18 years old
  • 20% of the sum assured paid once the child is 19 years old
  • 20% of the sum assured payable once the child is 20 years old
  • 20% of the sum assured paid when the child is 21 years old
  • 20% of the sum assured payable when the child is 22 years old
  • Guaranteed addition and loyalty addition (if any) upon surviving the age of 23

Features and Eligibility for LIC Policy for NRI Child

Attribute

Minimum Limit

Maximum Limit

Sum Assured

USD 5,000

USD 250,000

Term

23 years

Age of Entry

0 years

13 Years

Age of Maturity

-

23 Years

Mode of Premium Payment

Lumpsum, annually, quarterly, half-yearly, and monthly

 

Benefits of LIC Policy for NRI Child

Guaranteed Addition:

If one purchases a policy of USD 100,000, there is a guaranteed addition of USD 2,500 for every policy year. This is paid to the child along with the sum assured once they reach the age of 23 or earlier in case of the untimely death of the parent/guardian.

Loyalty Addition:

The life assured will also get a loyalty bonus once the LIC policy for an NRI child matures or in case of untimely demise. The rate changes from time to time, given that the policy has been effective for at least 15 years. 

Premium Waiver Benefit:

Parents or legal guardians up to the age of 50 can avail of the premium waiver benefit. This proves beneficial in case of an untimely demise of the proposer during the premium payment tenure, as the premiums to be paid thereon are waived.

Flexible Premium Payment Modes

The proposer can pay the premium in 3 ways – 

  • Premium payment till the child turns 18 (full-term)
  • Premium payment in 5 years (Limited-term)
  • One-time Payment

The premium can be paid either monthly, quarterly, half-yearly, or annually at the proposer’s convenience 

Discontinuation of Premium Payment 

If the proposer does not pay the premium during the grace period, the policy lapses. However, if they have paid the premium for at least 3 complete years before the discontinuation, the sum assured is reduced. The rate of sum assured disbursement, however, will remain the same.

Family Protection Benefit Rider

  • The family can seek financial benefit by insuring the proposer for 20% of the sum assured during the deferment period. 

It must be noted that this is possible only when the child is below the age of 18 and is subjected to the additional premium payment. 

  • Proposers till the age of 50 can opt for this benefit
  • The sum assured is payable in case of the sudden death of the proposer before the child turns 18 

Date of Commencement of Risk

  • This plan functions as a life insurance policy once the child turns 7 years old or after 2 years from the date the policy commenced, whichever comes later.
  • If the proposer has availed of the premium waiver benefit (PWB) or family protection benefit (PFB), the risk cover for the proposer’s life continues. 

Medical Examination

If the proposer avails of PWB or FPB, they would be required to provide a medical report.

Special Provisions under Professional Education Plan

  • This LIC policy for an NRI child can be a gift from grandparents, older siblings, or any other relative, who can secure the policy by paying a single premium.
  • It is a cashback policy where the child gets survival benefits at regular intervals once they turn 18.
  • The risk cover comes into effect after 2 years from the date when the policy began or from the policy anniversary after the child turns 7.
  • Once the child turns 18, the policy vests on them – they become the owner of the policy and the proposer has no right over the policy.

LIC Jeevan Tarun Plan

The JeevanTarun plan is a non-linked, restricted premium payment plan. It is simply a money-back plan that provides a mix of protection and investment feature. This LIC policy for an NRI child is framed to meet the educational and other requirements of children through yearly survival benefits from the age of 20 to 24 years and maturity benefits at the age of 25 years. The policy is flexible in that the policyholder can decide the portion of survival benefits they want during the policy tenure.

There are four options from which the proposer can select the proportion of survival benefits –

Options

Survival Benefit

Maturity Benefit

Option 1

There is no survival benefit

Payment of 100% sum assured and vested bonuses

Option 2

Only 5% of the sum assured is paid consecutively for last 5 policy years

75% of the sum assured and vested bonuses are paid

Option 3

10% of the sum assured is payable every year for the last 5 years of the policy

50% of the sum assured and the vested bonuses are paid

Option 4 

15% of the sum assured is payable every year for the last 5 years of the policy

The remaining 25% of the sum insured is paid along with the vested bonus 

 

Features of LIC Policy for NRI Child

Given below are the key features of the LIC Jeevan Tarun plan – 

  • The premium is paid till the child turns 20 and the policy continues till the child turns 25 years old. 
  • Flexible premium payment options are available for this plan. 
  • The risk cover begins once the child turns 8 or 2 years from the date the policy commenced, whichever comes earlier.
  • The remaining sum assured with the vested bonus is payable as a maturity benefit. 
  • The sum assured on death is 10 times more than the annualised premium, or 125% of the sum assured, whichever is higher.

Benefits of the LIC Policy for NRI Child

The following are the benefits of this LIC policy for an NRI child – 

Death Benefit

In case of the untimely death of the life assured during the policy tenure, the assured sum along with the vested bonus (if any) is paid to the beneficiary. This amount is usually –

  • 125% of the sum assured selected at the time of policy
  • 10 times the annualised premium
  • Subjected to at least 105% of the total premium paid till the time of death 

Survival Benefit

If the life assured survives the maturity age (18 years), a certain portion of the sum assured is paid to the policyholder in the form of survival benefit consecutively for five years.

Maturity Benefit

If the life assured survives the policy tenure, the remaining sum assured, along with the vested bonuses, is paid to them as maturity benefit.

Eligibility and Other Restrictions

The following are the eligibility criteria of this LIC policy for an NRI child – 

  • Entry Age Limit – 90 days to 12 years
  • Maturity Age – 25 years

LIC New Children’s Money Back Policy

This LIC policy for NRI children is a non-linked, single, life assurance, traditional cash back policy. It is customised to help the life assured fulfil their educational and other career-related needs as they grow up with the survival benefits. Additionally, it provides risk cover to the child during the policy tenure.

Features of the LIC Policy for NRI Child

Here are the major features of New Children’s Money Back Policy –

  • There is a premium waiver rider available that waives future premiums in case of the sudden demise of the proposer. 
  • The life assured is eligible to earn bonuses and the premium can be paid in restricted instalments. 
  • Once the life assured turns 18, this LIC policy for NRI children will be vested in their name.

Benefits of New Children’s Money Back Policy

The following are the benefits of the LIC policy for an NRI child – 

Death Benefit:

Upon the demise of the life assured during the policy tenure, the death benefit is paid in the following manner – 

  • Demise before risk cover begins – The beneficiary receives the return of premium excluding the rider or extra premium
  • Demise during the risk cover period – The nominee receives the sum assured on death and the vested final additional bonus and reversionary bonus (if any). This sum assured on death is higher than the actual sum assured and 7 times of annualised premium. 

Survival Benefit:

If the life assured survives the policy term, 20% of the sum assured is payable. 

Maturity Benefit:

If the life assured survives till the maturity of the policy, the sum assured, along with the final additional bonus and the simple reversionary bonus is payable.

Eligibility and Other Restrictions

Listed below are the eligibility criteria for this LIC policy for NRI children – 

  • Age Limit for Entry - 0 years to 12 years
  • Age of maturity – 25 years

Have a look at some of the most frequently asked questions regarding LIC policy for NRI children – 

Frequently Asked Questions

Q1: What is the LIC children's money-back policy?

LIC's new children’s money-back policy provides survival, death, and maturity benefits to the life assured and the nominee. The tenure of this plan is the maturity age (25 years) – the age of entry. 

Q2: Are there any special provisions under LIC Professional Education Plan?

Here are the special provisions under this LIC policy for NRI children – 

  • The proposer can pay the premium of 5 years in advance in a lump sum at a discounted rate 
  • The policy can be transferred to LIC India when the policyholder returns to India. This transfer, is, however, possible only if the 1st year’s premium is fully paid. 

Q3: What is participation in profits under LIC JeevanTarun Plan?

Under this benefit, the policyholder can participate in the profits of the corporation and receive simple reversionary bonuses as per the Corporation’s experience.

Q4: How long does the proposer need to pay the premium for a child plan?

The premium payment stops on the policy anniversary after the life assured turns 18.

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