The LIC Jeevan Tarun Plan 734 is a child insurance policy designed to provide financial security for your child’s education, marriage, or other significant life events. This versatile plan caters to both boys and girls and offers multiple options for customization based on your specific requirements. Below is an in-depth exploration of this unique insurance product, covering its features, benefits, premium details, and more.
LIC Jeevan Tarun Plan Overview
The LIC Jeevan Tarun Plan (Plan No. 734) is a unique child insurance plan that provides financial support for your child’s future, specifically designed to cater to expenses like higher education or marriage. Here’s a quick overview:
1. Eligibility and Age Criteria
- Minimum Age: Parents can opt for this policy as early as 30 days after the child’s birth.
- Maximum Age: The policy is available for children aged up to 12 years.
2. Policy Term
The policy runs until the child turns 25 years old.
- For example, if the child is 10 years old, the policy term will be 15 years (until the child is 25). Similarly, if the child is 5 years old, the term will be 20 years.
3. Premium Payment Term (PPT)
Premiums are payable until the child reaches 20 years of age.
For instance:
- If the child is 5 years old, premiums must be paid for 15 years.
- If the child is 10 years old, premiums must be paid for 10 years.
4. Sum Assured
- Minimum Sum Assured: ₹2,00,000
- Maximum Sum Assured: No upper limit, subject to underwriting based on the proposer’s income.
5. Maturity Age
The policy matures when the child turns 25 years old, providing the sum assured along with bonuses accrued over the term.
6. Customization Options
Four payout options allow you to choose between money-back benefits during the term or receiving the entire sum assured upon maturity.
| Option | Survival Benefit from Age 20 to 24 | Maturity Benefit at Age 25 |
|---|---|---|
| 1 | No Survival Benefit | 100% of S.A. |
| 2 | 5% of S.A. every year for 5 years | 75% of S.A. |
| 3 | 10% of S.A. every year for 5 years | 50% of S.A. |
| 4 | 15% of S.A. every year for 5 years | 25% of S.A. |
These percentages vary based on the chosen option, ensuring alignment with your child’s financial milestones.
Also see: LIC Bima Jyoti Plan 760
Explanation of Option 1 in LIC Jeevan Tarun Plan
Option 1 is designed for policyholders who do not wish to receive money back (survival benefits) during the policy term and prefer to receive the entire maturity amount at the end of the policy. Here’s how it works:
Example Calculation
1. Assumptions:
- Child’s Age: 0 years (newborn).
- Sum Assured: ₹10,00,000.
2. Premiums:
- Annual Premium (without GST): ₹41,570.
- First-Year Premium (with 4.50% GST): ₹43,441.
- Second Year Onward (with 2.25% GST): ₹42,505 annually.
3. Premium Payment Term (PPT):
- Premiums are payable until the child reaches 20 years of age.
- Total duration of premium payment: 20 years.
4. Policy Maturity:
- No premiums are payable from ages 20 to 25.
- The policy matures when the child turns 25, providing a guaranteed sum assured of ₹10,00,000 along with bonuses.
Also see: LIC New Money Back Plan 720
Bonuses
1. Annual Bonus:
- LIC declares annual bonuses based on its profits.
- Based on past rates: ₹45 per ₹1,000 sum assured.
- For a sum assured of ₹10,00,000, the annual bonus = ₹45,000.
- Over 25 years, the total bonus = ₹11,25,000.
2. Final Additional Bonus:
- A lump sum declared at maturity.
- Estimated at ₹4,50,000.
Total Maturity Value
- Sum Assured: ₹10,00,000.
- Annual Bonuses: ₹11,25,000.
- Final Additional Bonus: ₹4,50,000.
- Total Maturity Amount: ₹25,75,000.
Key Benefits of Option 1
- Entire payout, including sum assured and bonuses, is received at maturity.
- No interim payouts ensure a larger corpus for long-term goals.
- Ideal for funding significant future expenses such as higher education or marriage.
By selecting Option 1, policyholders maximize the maturity benefit, making it a great choice for securing long-term financial goals for their child.
Also see: LIC Nivesh Plus Plan 749
Explanation of Option 2 in LIC Jeevan Tarun Plan
In Option 2, the policyholder receives 5% of the Sum Assured as a money-back benefit for 5 years, starting from the child’s age of 20 until they turn 24. Additionally, the remaining benefits are paid at maturity when the child turns 25. Here’s a detailed breakdown:
Example Calculation:
- Sum Assured: ₹10,00,000
Annual Premium:
- Annual Premium (without GST): ₹42,550.
- First-Year Premium (with 4.50% GST): ₹44,465.
- Second Year Onward (with 2.25% GST): ₹43,507 annually.
- Premium Payment Duration: 20 years (until the child turns 20).
Money-Back Payments:
Starting at the child’s age of 20 years, 5% of the Sum Assured (₹50,000) is paid annually for 5 years:
- At age 20: ₹50,000
- At age 21: ₹50,000
- At age 22: ₹50,000
- At age 23: ₹50,000
- At age 24: ₹50,000
- Total Money Back: ₹2,50,000.
Also see: LIC Jeevan Utsav Plan 771
Maturity Benefits:
At age 25, the following amounts are paid:
75% of the Sum Assured: ₹7,50,000 (as 25% has already been paid as money-back).
Estimated Bonuses:
- Annual Bonus (25 years): ₹11,25,000.
- Final Additional Bonus: ₹4,50,000.
- Total Maturity Amount: ₹23,25,000.
Combined Benefits:
- Money Back: ₹2,50,000
- Maturity Amount: ₹23,25,000
- Grand Total: ₹25,75,000
This option provides a steady cash flow during the crucial years of higher education, along with a substantial maturity benefit, ensuring the child’s financial security.
Explanation of Option 3 in LIC Jeevan Tarun Plan
In Option 3, you receive 10% of the sum assured as money back annually for 5 years, starting from the child’s 20th birthday. Here’s how it works with a ₹10,00,000 sum assured:
Premium Payment Details:
- Annual Premium (without GST): ₹43,579 yearly
- First-Year Premium (with 4.50% GST): ₹45,540
- Second Year Onward (with 2.25% GST): ₹44,559
- Premiums are paid until the child turns 20 years old.
Money Back Payouts:
- Starting at age 20, ₹1,00,000 (10% of ₹10,00,000) is paid annually for 5 years (ages 20 to 24).
- Total money back over 5 years: ₹5,00,000.
Maturity Benefits:
At age 25, the remaining 50% of the sum assured (₹5,00,000) is paid, as the other 50% has already been distributed as money back.
Bonuses:
- Estimated Annual Bonus: ₹11,25,000
- Final Additional Bonus: ₹4,50,000
- Total maturity amount: ₹20,75,000 (sum assured + bonuses).
Overall Payout:
- Money Back: ₹5,00,000
- Maturity Amount: ₹20,75,000
- Total Benefits Received: ₹25,75,000
This option suits individuals seeking a balance between periodic payouts and a substantial maturity amount, ensuring liquidity and long-term savings for a child’s significant milestones.
Explanation of Option 4 in LIC Jeevan Tarun Plan
In Option 4, 15% of the sum assured is paid as a money-back benefit annually for 5 years, starting when the child turns 20. The remaining benefits, including the balance of the sum assured and bonuses, are paid upon maturity at age 25. Here’s how it works:
1. Premium Details:
- Annual Premium (without GST): ₹44,608
- First-Year Premium (with 4.50% GST): ₹46,615
- Second Year Onward (with 2.25% GST): ₹45,611
2. Money-Back Payments:
- Sum Assured: ₹10,00,000
- Annual Money Back (15% of Sum Assured): ₹1,50,000
- Paid at ages 20, 21, 22, 23, and 24.
- Total Money Back Received: ₹7,50,000
3. Maturity Benefits at Age 25:
- Remaining Sum Assured (25%): ₹2,50,000
- Estimated Bonus: ₹11,25,000
- Final Additional Bonus: ₹4,50,000
- Total Maturity Amount: ₹18,25,000
4. Total Benefits Over the Policy Term:
- Money Back: ₹7,50,000
- Maturity Amount: ₹18,25,000
- Grand Total: ₹25,75,000
This option ensures regular payouts during the child’s young adult years while providing a significant lump sum at maturity.
Death Benefits in LIC Jeevan Tarun Plan: Explained
If an accident occurs after the risk cover starts and before the policy matures, the nominee receives the sum assured on death and the bonus accrued up to that point.
Step-by-Step Calculation:
1. Determine the Sum Assured on Death:
LIC calculates this as the higher of the following:
- 125% of the basic sum assured (e.g., for ₹10 lakh, this is ₹12,50,000).
- 7 times the annual premium (e.g., ₹41,570 × 7 = ₹2,90,990 for Option 1).
In this case, the sum assured on death is ₹12,50,000, as it is the higher amount.
2. Add Accrued Bonus:
Bonuses accumulate yearly; for example, if the child is 11 years old at the time of the accident, the bonus for 11 years would be:
For example, if the policy ran for 11 years, and the bonus rate was ₹45 on ₹1,000 sum assured, the annual bonus would be ₹45,000 on sum assured of 10 lakh and total bonus would be ₹45,000/year x 11 years = ₹4,95,000.
3. Total Death Benefit:
- Sum assured on death: ₹12,50,000
- Accrued bonus: ₹4,95,000
- Total Payout: ₹17,45,000
This payout ensures financial support for the family in the event of unforeseen circumstances.
Risk Cover
The LIC Jeevan Tarun Plan provides a robust risk cover to ensure financial security for the child’s family in case of unforeseen circumstances. The commencement of risk cover depends on the age of the child at the time of policy purchase:
- For children aged 8 years or older: Risk cover begins immediately upon policy commencement.
- For children younger than 8 years: Risk cover starts 2 years after the policy’s inception or when the child turns 8 years old, whichever comes first.
Example:
- If your child is 9 years old, the risk cover starts immediately as soon as the policy is purchased.
- If your child is 7 years old, the risk cover will activate upon the child turning 8 years old.
- If your child is 3 years old, the risk cover begins 2 years after the policy starts, i.e., when the child is 5 years old.
Additional Rider
The Premium Waiver Benefit Rider is an important addition to the LIC Jeevan Tarun Plan. By opting for this rider, you can ensure that in the event of an accident that incapacitates the policyholder (the parent or proposer), the premiums for the policy are waived. This means your child will continue to receive all the benefits of the policy without the need for further premium payments. This rider can be added by paying an additional premium.
Additional Features
1. Loan Benefit
LIC Jeevan Tarun also provides a Loan Benefit, which can be availed after 1 year of the policy’s commencement. This option allows you to borrow money against the policy, which can be a helpful feature in times of financial need. The loan amount will depend on the surrender value of the policy, and it must be repaid with interest to LIC.
2. Surrender Option
The plan includes a Surrender Option, which allows you to close the policy if necessary. If you decide to discontinue the policy after at least 1 year of its commencement, you can opt for surrendering the policy and receive its surrender value. The surrender value is the amount accumulated in the policy, which will be paid to you, giving you flexibility if you choose to terminate the policy early.
3. Premium Payment Mode
LIC offers four premium payment modes to suit your financial preferences:
- Yearly
- Half-yearly
- Quarterly
- Monthly
For monthly payments, you can use the NACH (National Automated Clearing House) option or the Salary Saving Scheme. If you choose the NACH option, the premium will be collected on a monthly basis, but you will need to pay three months’ premiums in advance.
4. Revival Period
If you miss premium payments and your policy lapses, LIC provides a Revival Period of 5 years. During this period, you can revive the policy by paying the overdue premiums along with a late fee.
5. Free Look Period
LIC provides a Free Look Period of 30 days from the policy’s issuance. During this time, you can review the policy’s terms and conditions. If you find that the plan does not meet your needs or expectations, you can cancel the policy and receive a refund (minus any applicable charges).
6. Tax Benefits
The tax benefits under the LIC Jeevan Tarun Plan are available under two key sections of the Income Tax Act:
- Section 80C: Premiums paid for the policy are eligible for tax deduction, reducing your taxable income.
- Section 10(10D): The maturity amount or survival benefits received from the policy are tax-exempt, making this plan an attractive option for long-term financial planning.
Why Choose LIC Jeevan Tarun Plan?
The Jeevan Tarun Plan stands out for its focus on child-specific financial needs, customizable payout options, and the backing of LIC’s trusted legacy. It is ideal for parents seeking a systematic savings plan to meet their child’s education and marriage expenses.
By understanding the terms and leveraging the plan’s flexibility, parents can ensure a secure financial foundation for their child’s future.
Conclusion
The LIC Jeevan Tarun Plan 734 offers an excellent opportunity for parents to secure their child’s future through a structured and flexible child insurance plan. With multiple options for payouts, guaranteed maturity benefits, and a host of additional features, this plan can be a valuable tool for planning for your child’s education, marriage, or other significant life events. The combination of risk cover, bonuses, and the flexibility in premium payments makes it a sound choice for parents looking for long-term financial security.
Frequently Asked Questions (FAQs)
What is the minimum age to buy the LIC Jeevan Tarun Plan?
The minimum age for taking the LIC Jeevan Tarun Plan is 30 days.
Can I choose multiple payout options in the Jeevan Tarun Plan?
No, you must choose one payout option. The plan offers four options: no money back, 5%, 10%, or 15% of the sum assured as money back.
What happens if the policyholder dies before the policy’s risk cover starts?
If the policyholder dies before the risk cover starts, the nominee receives a refund of the premiums paid, minus GST and rider premiums.
Is the LIC Jeevan Tarun Plan eligible for tax benefits?
Yes, the premiums paid are eligible for deductions under Section 80C, and the maturity or survival benefits are exempt from tax under Section 10(10D).
Can I take a loan against the LIC Jeevan Tarun Plan?
Yes, you can take a loan after 1 year of the policy’s commencement, subject to the policy’s surrender value.
Disclaimer: The LIC Jeevan Tarun Plan 734 is subject to terms and conditions as defined by the Life Insurance Corporation of India (LIC). This article is for informational purposes only. For complete details, including eligibility and premium calculations, kindly refer to the official policy document or consult an LIC agent.