LIC Amritbaal Plan 774 – A Comprehensive Guide

LIC Amritbaal Plan 774 is a newly introduced plan designed to secure a child’s future by offering both insurance and investment benefits. This plan replaces older children’s plans, such as Jeevan Tarun and Children Money Back, making it the only available option for parents looking to secure their child’s future through LIC. It is a non-linked, non-participating, guaranteed maturity plan, specifically reintroduced on October 1, 2024, with significant modifications to its structure, premium options, and benefits.

Also see: LIC New Bima Jyoti Plan 760

Overview of LIC Amritbaal Plan

The Amritbaal Plan is aimed at ensuring financial stability for children as they transition into adulthood, providing guaranteed returns at maturity, as well as life cover. The plan is suitable for parents who want to invest early and secure a guaranteed maturity benefit for their child. This plan can be customized to fit varying financial needs with different premium payment options, sum assured levels, and additional riders.

Key Features of LIC Amritbaal Plan

Plan Type

• Non-Linked & Non-Participating: This means that the policy is not linked to market fluctuations, providing guaranteed returns, and it does not participate in the corporation’s profits.
• Insurance & Investment: Combines life insurance with an investment plan to provide a comprehensive financial safety net for the child.
• Guaranteed Maturity Benefit: Offers a guaranteed maturity benefit, making it a secure investment option for future planning.

Age Eligibility

• Minimum Entry Age: 90 days (3 months)
• Maximum Entry Age: 13 years
• Maturity Age: The policy matures when the child reaches a minimum age of 18 years and a maximum of 25 years.

This wide age range makes the plan highly flexible for parents to start investing for their children early in life.

Premium Payment Options

The Amritbaal Plan offers two payment options:

• Single Premium: A one-time premium payment where parents can pay upfront and secure their child’s future without any future liabilities. This is an ideal option for those who prefer to avoid long-term commitments.
• Limited Premium: Allows for premium payments over a fixed period of 5, 6, or 7 years. The limited premium option provides flexibility in terms of managing finances while ensuring the plan’s benefits remain intact.

Premium Payment Term and Policy Term

• Single Premium: Policy terms range from 5 to 10 years.
• Limited Premium: Policy terms range from 10 to 25 years, allowing parents to choose the term according to their long-term financial goals.
• No Regular Premium Option: Notably, there is no option for regular monthly or annual premium payments.

Sum Assured

• Minimum Sum Assured: ₹ 2,00,000
• Maximum Sum Assured: No upper limit

Parents can choose a sum assured based on their financial capacity and the future financial needs of the child.

Loan Facility

• In the case of a single premium policy, the loan facility becomes available after three months.
• For limited premium policies, the loan facility is available after one year.
• Special Benefit for Girl Child: If the policy is in the name of a girl child, the interest rate on the loan will be 1% lower than the prevailing rate, providing an additional benefit for female children.

Surrender Value

• Single Premium: The policy can be surrendered at any time after inception.
• Limited Premium: Surrender value becomes available after one year.

In both cases, the surrender comes with a guaranteed surrender value, ensuring that parents can exit the plan with some benefit if needed.

Additional Benefits

Premium Waiver Benefit Rider

In the unfortunate event of the proposer’s (usually the parent) death, the Premium Waiver Benefit Rider ensures that the child remains insured without having to pay future premiums. The premiums are waived, and the policy continues, providing benefits to the child.

Death Benefits

The plan offers different death benefit structures based on the premium payment option:

Limited Premium:

• Option 1: 7 times the annualized premium or sum assured, whichever is higher.
• Option 2: 10 times the annualized premium or sum assured, whichever is higher.

Single Premium:

• Option 3: 1.25 times the single premium or sum assured, whichever is higher.
• Option 4: 10 times the single premium or sum assured, whichever is higher.

This offers comprehensive life cover to ensure that the child’s future is secure even in the event of an untimely death of the policyholder.

Maturity Benefits and Guaranteed Addition

The plan offers guaranteed maturity benefits, including a sum assured plus a guaranteed addition:

• The guaranteed addition is ₹80 per ₹1,000 of the basic sum assured for each completed year of the policy term.
• In case of a policy becoming paid-up (where premiums are discontinued), the guaranteed addition is adjusted based on the premiums paid.

For example, if a policyholder pays for only two years, and the policy term is five years, the guaranteed addition reduces accordingly.

Example Scenario

To illustrate, let’s consider the case of a child named Mona, who is 0 years old at the time of entry. The parents select a sum assured of ₹5,00,000, with a policy term of 25 years, and a premium paying term of 5 years. Let’s examine the premium options:

• Single Premium: ₹3,34,250 (one-time payment)
• Limited Premium: ₹87,153 per year for 5 years, totaling ₹4,35,765

Upon maturity, the policyholder would receive:

• Sum Assured: ₹5,00,000
• Guaranteed Addition: Calculated as (₹5,00,000 ÷ 1,000) × ₹80 × 25 = ₹10,00,000

Thus, the total maturity benefit would be ₹15,00,000.

In this scenario, the Internal Rate of Return (IRR) is approximately:

• Limited Premium: 5.60%
• Single Premium: 6.00%

Additional Provisions

Free Look Period

The free look period, initially 15 days, has now been extended to 30 days, allowing policyholders more time to evaluate the plan and decide whether they want to continue with it.

Special Considerations for Paid-up Policies

In case a policyholder is unable to continue premium payments, the policy can become paid-up, and the benefits will adjust accordingly. The guaranteed addition in paid-up policies is lower than in fully paid policies but still provides a partial maturity benefit.

Conclusion

LIC Amritbaal Plan (Table No. 774) is a promising solution for parents seeking a secure and guaranteed financial plan for their child’s future. With flexible premium payment options, a range of sum assured choices, guaranteed additions, and robust death benefits, the plan serves as a comprehensive package for long-term financial planning. Whether you opt for a single premium or limited premium, this plan offers peace of mind, knowing that your child’s future is financially secure. Furthermore, the additional loan facility, particularly the reduced interest rate for girl children, makes it a highly attractive option for parents.

By understanding the complete structure and benefits of the Amritbaal Plan, you can make an informed decision about securing your child’s financial future.

Also see:

• LIC Jeevan Lakshya Plan 733
• LIC Nivesh Plus Plan 749
• LIC Jeevan Labh Plan 736
• LIC Jeevan Anand Plan 715
• LIC Jeevan Utsav Plan 771

FAQs about LIC Amritbaal Plan 774

Disclaimer: The information provided in this article about LIC Amritbaal Plan (Table No. 774) is for general informational purposes only and does not constitute financial advice. Policy terms, conditions, and benefits may vary, and individuals are advised to consult with a licensed insurance advisor or LIC official documentation before making any investment or insurance decisions.