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LIC Kanyadan vs Sukanya Samriddhi Yojana

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In recent years, numerous organisations have risen to the forefront, proactively launching a myriad of schemes tailored to the financial needs of girl children and their parents. Among these, the Life Insurance Corporation (LIC) has launched the LIC Kanyadan policy while the Prime Minister of India, in a parallel initiative, has inaugurated the Sukanya Samriddhi Yojana. These two schemes have emerged as particularly influential among the multitude of initiatives, providing a comprehensive suite of advantages to support a girl child's future.

With the aim of facilitating informed decision-making, this article will delve into a detailed analysis of these two schemes. Specifically, we will explore the key components, advantages, and critical distinctions between the LIC Kanyadan and Sukanya Samriddhi Yojana.

Our goal is to empower you with the knowledge to choose the most fitting plan, one that will suit your requirements and contribute towards the prosperous future of your child.

LIC Kanyadan Policy

Understanding LIC Kanyadan Policy

  • The LIC Kanyadan Policy is aimed at supporting parents of a girl child by providing a safety net that takes care of future financial burdens.
  • This policy, as a child plan, is instrumental in shaping a secure and financially stable future for the girl child, thereby enabling parents to fulfil their child's dreams.

Key Features and Advantages of LIC Kanyadan Policy

  • The policy is accessible to both Indian residents and Non-Resident Indians (NRIs).
  • The policy provides robust financial safety for the daughter.
  • A lump-sum maturity benefit is provided to the policyholder.
  • Premiums are waived off in case of the policyholder's unfortunate demise.
  • An immediate payout of INR 10 lakh is provided in the event of accidental death and INR 5 lakh in case of a natural demise.
  • An annual payout of INR 50,000 is disbursed until the policy maturity.
  • The full maturity amount is provided at the end of the policy tenure.
  • Life risk cover is provided for a certain period (up to 3 years) prior to maturity.
  • The policy includes a 15-day free look period, which allows the policyholder to revoke the policy within the first 15 days of buying it.
  • There is a 30-day grace period for annual, half-yearly, or quarterly premium payments and a 15-day grace period for monthly payments.
  • The policy can be surrendered if the premiums are paid completely for 3 years consecutively before the surrendering option.
  • A loan can be availed only after 3 years of consecutive premium payments.
  • Additional benefits are available in case of the policyholder's demise while the policy is active.
  • Disability Rider benefit is available if the premium tenure continues for a minimum of 5 years.

Eligibility Criteria for LIC Kanyadan Policy

  • The minimum basic sum assured is INR 100,000 with no upper limit, and it should be in multiples of INR 10,000.
  • The policy term can range from 13 to 25 years.
  • The premium paying term is the policy term minus 3 years.
  • The minimum age at entry is 18 years, and the maximum age at entry is 50 years.
  • The maximum maturity age is 65 years.
  • The daughter's age should be at least 1 year.

Sukanya Samriddhi Yojana

Understanding Sukanya Samriddhi Yojana

Introduced by the Prime Minister of India in 2015, Sukanya Samriddhi Yojana (SSY) is a critical component of the ‘Beti Bachao Beti Padhao’ campaign. The primary objective of this scheme is to establish a reliable financial safety net for the girl child, ensuring her future is well protected.

Key Features and Advantages of Sukanya Samriddhi Yojana

  • The SSY is a government-led scheme exclusively designed to secure the financial future of a girl child.
  • Parents or legal guardians with a daughter aged below 10 years are eligible to open an SSY account.
  • The policy duration extends until the girl child gets married, either after the age of 18 or 21 years, whichever is earlier.
  • The scheme offers an annual compound interest of 7.6%.
  • Investments under this scheme are tax-deductible under Section 80C of the Income Tax Act.
  • The annual deposit range for the SSY is between INR 250 and INR 1.5 lakh.
  • The SSY account must be opened under the girl child's name. This is unlike other schemes where the account is usually under the parent's name.
  • A family can open a maximum of two Sukanya Samriddhi Yojana accounts.

Benefits Under Sukanya Samriddhi Yojana

  • The scheme offers a high-interest rate.
  • It provides income tax deductions.
  • There is a specific lock-in period.
  • The scheme allows for partial withdrawals.
  • Guaranteed maturity benefits are offered.
  • Interest continues to be paid after the policy matures.

Eligibility Criteria for Sukanya Samriddhi Yojana

  • The minimum annual deposit required to open the account is INR 250, while the maximum deposit can be up to INR 1, 50,000 every year.
  • The parent or legal guardian of the girl child must open the account.
  • The girl child must be below 10 years of age.
  • A family can open up to 2 accounts for two girl children.
  • The scheme's tenure extends until the girl child gets married, either after the age of 18 or 21 years, whichever comes earlier.
  • The account must be opened only in the name of the girl child.
  • Deposits made into the SSY account are eligible for tax deductions under section 80C of the Income Tax Act.
  • Partial withdrawals are permissible under certain conditions.

LIC Kanyadan Policy vs Sukanya Samriddhi Yojana

Criteria LIC Kanyadan Policy Sukanya Samriddhi Yojana
Age Criteria
  • Daughter: Minimum 1 Year
  • Father: 18 to 50 years
Girl child: Below 10 years
Nationality Criteria Available for both NRIs and Indian citizens Available only for Indian residents
Account Holder Father of the girl child Account in the name of the girl child till marriage
Sum Assured Limit Minimum: Rs 1 Lakh
Maximum: No Limit
Based on the amount deposited
Payment Limit No upper limit Up to a maximum of INR 1.5 Lakh per financial year
Premium Waiver Available in case of policyholder's demise Not available
Loan Availability Available after 3 years of consecutive premium payment Not available
Interest Rate Not applicable (as it is a life insurance policy) 7.6% compounded annually
Policy Tenure Can range from 13 to 25 years Until the girl child is married (after the age of 18 or 21 years) whichever is earlier
Tax Benefits - Exempted under Section 80C of the Income Tax Act
Additional Benefits Benefits available in case of the policyholder's demise No additional benefits
Partial Withdrawal - Allowed under certain conditions
Maturity Benefits Full maturity amount payable at the end of the policy term Guaranteed maturity benefits
Death Benefits INR 10 lakh in case of accidental death, INR 5 lakh in case of natural demise Not applicable
Grace Period 30 days for annual, half-yearly, or quarterly premiums. 15 days for monthly premiums -

Bottom Line

Both LIC Kanyadan Policy and Sukanya Samriddhi Yojana offer unique benefits targeted at securing the future of a girl child. They both serve as excellent financial planning tools for parents aiming to safeguard their daughters' futures.

With that said, these plans differ significantly in their terms, conditions, and benefits. For this reason, it is essential to understand the intricacies of both schemes thoroughly before making an informed choice. The best scheme for you and your child will depend on your individual circumstances, needs, and financial goals.

Always remember, the ultimate goal here is to ensure your child has a secure financial future. Choosing the right plan plays a crucial role in achieving that.

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