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LIC Kanyadan Policy

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The Life Insurance Corporation of India launched the Kanyadan policy to provide a plan for the welfare of the girl child and assist the parents in gathering finances for education and marriage of the daughter. As marriage in India costs a lot on the pocket and as people are now willing to educate their daughters and help them get a platform for success and achievement, financial assistance is a crucial step to reduce the burden of the parents. The policy acts as backup funds for higher education and support for the marriage of the girl child. The policy promotes the culture of educating the girls and bringing them at par to provide education to achieve their dreams.

The policy provides a sum assured at the maturity to the insured and it can be used for the welfare of the girl. By paying a small premium amount every year, the parents or the guardians of the girl child can secure the future of their daughter. There are multiple benefits of owning kanyadan policy and the tailor-made policy by the LIC of India is one of its kinds to provide financial freedom to the parents.  

Eligibility Conditions of LIC Kanyadan Policy

a) Minimum Basic Sum Assured per life

Rs. 75,000

b) Maximum Basic Sum Assured per life

(The Basic Sum Assured can be in multiples of Rs. 5000/-)

Rs. 200,000

c) Minimum Age at entry

8 years (completed at the time of buying the policy)

d) Maximum Age at entry

55 years

e) Minimum Policy Term

10 years

f) Maximum Policy Term

20 years

h) Maximum Age at Maturity

70 years

*The total Basic Sum Assured under the LIC Kanyadan policy issued to an individual under this plan shall not exceed Rs 2 Lakh

Other Eligibility Conditions of the Plan

Other eligibility conditions include:

  • The plan is basically created to provide financial assistance to the family of the girl child, and so only the father of a daughter can purchase the policy to avail the benefits. The daughter cannot purchase the policy in her name
  • At the time of purchasing the policy, the daughter should be at least 1 year of age, and the minimum age of the father can be 18 years, and the maximum age can go up to 50 years

Salient Features of LIC Kanyadan Policy

Secure Future of Girl Child: A financial assistance in the growing years of the daughter can be highly beneficial as it helps the parents in accumulating the funds which can be utilized in the higher education of the child. Also, for the people who find it difficult to manage the expenses of the marriage, it is a great tool to start saving from the young age of the child.

Insurance and Savings Plan

LIC Kanyadan policy is a culmination of life cover and savings. It is a with-profit endowment plan that covers the life of the insured and provides sum assured as well in case of the death of the insured. The maturity benefits of the policy can be used for various purposes.

Higher Sum Assured

The minimum sum assured that one could avail at the time of maturity is Rs. 1 lac, and there is no limit to the maximum sum assured and will depend upon the premium amount paid by the insured. This flexibility helps the parents in deciding the funds they will require when the daughter will become an adult. A higher sum assured can surely help to get the best education and amenities and to create a prosperous and positive environment for the growth and nurturing of the child.

Premium Waiver Option

The policy is a great investment tool to secure the future of the child, and to avail the benefits, the father has to pay the premium until the end of the policy term. However, in case of the death of the father, the future premiums of the policy are waived off. This feature covers the risk of policy getting lapsed in the absence of the breadwinner of the family.

Accidental Death Coverage

The policy has a distinctive feature to cover the life of the policyholder by providing financial assistance of Rs. 10 Lakh in case of death of the insured in an accident. The future of the child will be secure with the help of this feature.

Non-Accidental/ Natural Demise

The policy provides the family with a sum of Rs. 5 Lakh if the policyholder dies in natural or non-accidental death.

The policy can be availed by the families living outside the country as well. This feature helps the parents in securing the future of their daughter by investing in the schemes even when they are staying away from their native land.

Flexible Payment Period

The life insurance corporation of India provides a special feature to pay the premiums of the policy in a period of 6, 10, 15, or 20 years.

Suicide by the Policyholder

In case the policyholder commits suicide within 12 months of commencement of the risk, the insurer doesn’t provide any claim against the policy. However, the insurer provides 80% of the premiums paid by the insured, excluding the taxes, premiums of the accidental death benefit rider if availed by the insured.

Policy Loan

The insurer also provides the option to avail loan on the LIC Kanyadan policy provided the policy has reached a surrender value. The complete details regarding the loan on the policy can be understood from the insurer.

Tax on the Policy

The policy attracts taxes as per the taxation laws and will be applicable from time to time. The taxes shall be paid by the insurer holder on the premium amount, including the premiums of the riders availed by the policyholder. The tax amount will not be considered for the calculation of the maturity benefits paid by the insurer.

Cooling-off Period

In case the Policyholder is not satisfied with the “Terms and Conditions” of the policy, he/she has the right to return the policy to the Corporation within 15 days from the date of receipt of the policy bond stating the reasons for leaving the policy. After receiving the return request from the policyholder, the insurer will start the process of refunding the premium amount paid by the insured.

The risk premium of the basic insurance and the accidental benefit death rider will be recovered from the premium for the period of the cover. Other charges to be deducted from the premium amount are stamp duty charges. The cooling-off period should be discussed in detail by the applicant with the insurer. As there are scenarios in which the policy is not suitable for the applicant, and he/she has to return the policy. All the charges deductible from the premium and the terms and conditions of the return of the policy should be meticulously checked in the policy document. This is to ensure that the policy is in compliance and must fulfil the purpose of the applicant.

Surrender Value

The surrender value of the policy is defined as the actual sum that the policyholder will receive when he/she filed to get the cash value of the policy. A policy can be surrendered before the maturity, and the value of the policy can be claimed by the policyholder. In the LIC Kanyadan policy, the policyholder can apply for surrendering the policy after the completion of three years from the date of the commencement of the policy provided all the premiums have been in full.

The surrender value of the policy will be the percentage of the premium amount paid by the policyholder during the payment period, excluding the premiums for accidental death benefit riders if opted for by the insured. The below table showcases the guaranteed surrender value to the total premiums paid up by the policyholder during the policy term. For instance, the policyholder has opted for the policy term of 10 years. In the third year, he/she has applied for surrendering the policy; the surrender value will be only 3% of the total paid-up premiums.

Another Example

A policyholder with the policy term of 17 years, applied for surrendering the policy in the 8th year, then the surrender value will be 53.3% of the paid-up premiums.

The chart can help in understanding the insured when the policy should be surrendered to get the maximum benefits. Please note that the chart is only reflective, and the complete surrender value can be checked by connecting with the insurance provider. It is also important to check the details about the charges that will be deducted from the cash value.

Policy Term (years)

10

11

12

13

14

15

16

17

18

19

20

1

0.00%

0.00%

0.00%

0.00%

0.00%

0.00°.(i

0.00%

0.00%

0.00%

0 00%

0.00%

2

0.00%

0,00%

0.00%

0,00%

0.00%

0.00%

0.00%

0,00%

0.00%

0.00%

0.00%

3

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

4

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50 00%

50.00%

50 00%

5

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

6

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

7

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

8

65.00%

60 00%

57.50%

56.00%

55.00%

54.29%

53.75%

53.33%

53.00%

52.73%

52.50%

9

80.00%

70.00%

65 00%

62.00%

60 00%

58.57%

57.50%

56.67%

56.00%

55.45%

55.00%

10

80.00%

80.00%

72.50%

68.00%

65.00%

62.86%

61.25%

60.00%

59.00%

58.18%

57.50%

11

 

80.00%

80.00%

74.00%

70.00%

67.14%

65.00%

63.33%

62.00%

60.91%

60.00%

12

 

 

80.00%

80.00%

75.00%

71.43%

68.75%

66.67%

65.00%

63.64%

62.50%

13

 

 

 

80.00%

80.00%

75.71%

72.50%

70.00%

68.00%

66.36%

65.00%

14

 

 

 

 

80.00%

80 00%

76.25%

7333%

71.00%

69.09%

67.50%

15

 

 

 

 

 

80.00%

80 00%

76.67%

74,00%

71 82%

70.00%

16

 

 

 

 

 

 

80.00%

80.00%

80%

74.55%

72.50%

17

 

 

 

 

 

 

 

80.00%

80.00%

77.27%

75.00%

18

 

 

 

 

 

 

 

 

80.00%

80.00%

77.50%

19

 

 

 

 

 

 

 

 

 

80.00%

80.00%

20

 

 

 

 

 

 

 

 

 

 

80.00%

Sample Premium Rates

The following are some of the sample annual premium rates (exclusive the taxes) per Rs. 1000/- Basic Sum Assured opted by the insured.

AGE/TERM (years)

10

15

20

10

85.90

51.70

35.20

20

86.25

52.05

35.55

30

86.45

52.35

35.95

40

87.35

53.70

37.80

50

90.65

57.80

42.70

Mode and High Basic Sum Assured Rebates

The insurer provides a rebate of the premium amount as per the premium payment mode chosen by the insured.

Premium Payment Mode

Yearly mode                                                       - 2% of Tabular Premium

Half-yearly mode                                               - 1% of Tabular premium

Quarterly, Monthly (ECS) & Salary deduction - NIL

High Basic Sum Assured Rebate

For choosing the high amount as the sum assured, the insurer provides rebates on the premium amount. The higher sum assured not only provides more financial independence to the insured and the girl children for education and marriage but also provides a discount on the premiums. Thus it comes as a suitable savings method.

Basic Sum Assured            -        Rebate (Rs)

75,000 to 1,45,000           -        No discount provided by the insurer

1,50,000 and above            -       1.50% of the sum assured

Payment of Premiums

The policyholder has the option to pay the premiums of the policy in the following methods:

Yearly Premium Payment

The insured has to pay the premium of the policy only once in a financial year and the date of the payment can be discussed at the time of purchasing the policy.

Half-Yearly Premium Payment

As the name suggests, the premium can be paid in two half-yearly installments.

Quarterly Mode Premium Payment

The yearly premium of the policy is distributed over the four quarters, and the insured can pay the premium in the various modes available with the insurance provider.

Monthly Premium Payment (ECS Mode)

The insurer also provides the convenience to the policyholder to pay the premium monthly in the form of ECS, which is debited from the account of the insured.

Direct Salary

The last mode of payment is the deduction of the premium from the salary of the insured. The direction will take place until the end of the policy term.

The policyholder can choose any of the above premium payment methods as per the convenience.

Grace Period

The insurer provides a certain period in which the policyholder can pay the premium amount if he/she has missed paying the premium on or before the last date of the payment. The period is known as the grace period. If the payment is not made even in the grace period, the policy will lapse. For yearly, half-yearly and quarterly premium payment, the grace period is 30 days. For the monthly premium payment method, the grace period provided is 15 days.

The policyholder should always be aware of the upcoming premium dates, as missing out on the premium payment can directly result in the lapse of the policy. The insurer also sends reminders to the customers about the upcoming dates and last date of payment. One can also check the premium amounts and due dates by registering on the web portal of the LIC of India. The portal has all the details regarding the active and inactive policies owned by the person, and it is easier to keep track of the upcoming premium payments.

Exclusion of the Policy

There are two exclusions under the LIC Kanyadan policy, and the policyholder should be aware of these exclusions:

  • If the insurance holder commits suicide within the first 12 months of the date of the commencement of the risk of the policy, then any claim filed against the policy will not be entertained by the insurer. The insured can be a sane or insane mental position at the time of committing suicide. Still, the claim in such a situation is not processed by the insurer. The insurer only provides the 80% of the premiums paid to the nominee excluding the premiums of the riders and the taxes associated)
  • If the insurance holder commits suicide within the first 12 months of the date of the revival of the policy, then any claim filed against the policy will not be entertained by the insurer. The insured can be sane or insane mental position at the time of committing suicide, but the claim in such a situation is not processed by the insurer. The insurer only provides the 80% of the premiums paid or the surrender value to the nominee excluding the premiums of the riders and the taxes associated)

Accidental Benefit Death Rider

The insurer provides the option to the policyholder to choose the accidental death benefit rider along with the policy to enhance the life coverage and get more benefits with the plan. A rider provides enhanced coverage to the insured by promising a sum assured other than the death benefits of the basic policy. The premium of the rider should be paid other than the premium of the basic plan.

a.) Minimum Accident Benefit Sum Assured: Rs. 75,000

b.) Maximum Accident Benefit Sum Assured: The maximum benefit that can be availed under the rider is up to the basic sum assured of the basic policy subject the maximum amount of Rs. 50 Lakh including the individual life insurance policies of the insured and the group schemes which consists of the inbuilt accidental benefit taken along with the life insurance.

The Accident Benefit Sum Assured is provided in the multiples of Rs. 5,000.

c.) Minimum Entry Age: 18 years (completed at the time of buying the rider)

d.) Maximum Entry Age: The rider can be purchased any time at the time of the anniversary of the basic policy

e.) Maximum Cover Ceasing Age: The rider coverage tends to cease when the basic plan covers ends

Exclusion of the Rider

There are certain conditions in which the insurer will not pay out the benefits to the insured. Death due to the accident or the injuries sustained in the accident leading to the death of the insured in the following cases will not be covered by the policy provider:

  • Injuries caused by the self-leading to the death of the insured
  • Suicide attempt by the insured will not be covered
  • The accident caused by the insured under the influence of the drugs, alcohol, narcotics or any illegal substance
  • Injuries caused by civil rights, war, invasion in the country, any chemical or nuclear attack leading to the death of the insured
  • Death caused by the involvement of the insured in the military activities
  • Death during the involvement of the insured in the dangerous sports like bungee jumping, river rafting, water diving or any sport listed by the insurer are not covered in the claims

Death Claim Process of LIC Kanyadan Policy

The following steps are to be followed to make a death claim with the LIC of India:

  • Inform the Insurance Provider - The first step in filing the claim under the policy is to inform the insurer about the death of the insured. The intimation about death should be done within a particular time frame and can be confirmed from the insurer.
  • The claim intimation form is available online at the web portal of the insurer and can be downloaded and filled. The duly filled form should be submitted with the insurer for the start of the claim
  • The documents required by the insurance provider to process the claim should be confirmed from the insurer

Documents Required to File a Death Claim With LIC of India

If the policyholder dies in an accident or a natural death during the tenure of the policy, then the claim can be against the policy to avail the sum assured of the policy and the rider (if availed). The following documents are required to be submitted by the policyholder for getting a claim processed. It is better to check the documents with the insurer to get the claim process expedited.

  • Certificate of death is mandatory
  • Proof of age of the life insured is must if not provided at the time of purchasing the policy
  • Policy document stating the policy number
  • A statement from the hospital is required If the insured was admitted to the hospital at the time of death
  • Certificate of a medical attendant of the deceased
  • A person present at the cremation or burial of the body of the deceased will have to provide the cremation or burial certificate
  • For an employee, the employer certificate of the deceased is required

If the insured dies in an accident in an air crash, road accident or shipping accident, the following document will be required:

  • A certificate from the airline authorities is required stating that the insured was a passenger in the flight if the insured dies in an air crash
  • A certificate from the shipping authorities is required stating that the insured was a passenger in the ship if the insured dies in a ship accident
  • A certificate mentioning the cause of the death of the insured
  • An FIR report, or the panchanama, post mortem is required to be submitted if the insured dies in a road accident

How to get the Maturity Benefits Under LIC Kanyadan Policy?

The policy matures at the end of the policy term, and to get the maturity benefits; the policyholder has to reach out to the insurance provider and submit the relevant documents to get the maturity benefits transferred to the insured’s bank account. If the policy term as decided at the start of the policy was 15 years and the insured survives till the end of the policy term, then he/she is eligible to receive the maturity benefits from the insured.

How to Buy LIC NAV Kanyadan Policy?

To provide a secure future to the girl child, parents can purchase the policy to get the benefits and provide a sustainable future with growth opportunities.

Steps leading to buying LIC Kanyadan policy are listed below:

Step 1: Check the various parameters of the policy like the sum assured, maturity benefits, premium payment term, benefits of the riders and other relevant factors important for understanding the policy.

Step 2: The list of the documents required to purchase the policy should be confirmed from the insurer.

Step 3: Confirmation of the premium amount and the mode of payment from the insurer.

Step 4: The policy will start from the effective date when the payment is settled in the account of the insurer.

Step 5: The insurer will mail the policy copy stating the details like name, policy number, policy term to the registered address of the insured.

Documents Required to Purchase LIC Kanyadan Policy

Following documents are required to purchase LIC policy:

  • The policy can be purchased by the father of the daughter child and only when the daughter turns 1 year old
  • The details of the father like name, present address, permanent address, email id, contact number and date of birth will be required
  • The details of the girl child, like name and date of birth, will be required
  • Permanent address proof like Aadhar card, voter ID card, driving license or passport
  • Identity proof of the applicant like PAN card, passport, Aadhar card, driving license, ration card, attested bank statement or passbook
  • Birth certificate of the child and identification proof like Aadhar card will be required
  • Age of proof of father
  • Occupational details of the father

The Renewal Process for LIC Kanyadan Policy

The policy can be renewed by paying the premium amount to the insurance provider. The premium can be paid at the local office of the LIC and the payment mode can be confirmed from the insurance authorities. Please note that it is suggested to pay the premium on or before the last date of the premium payment.

FAQs

  • Q1. What is LIC Kanyadan policy?

    A1. The life insurance corporation has launched a policy to cater to the needs of girl children. The father of the child can purchase the policy to secure the future of the daughter and can utilize the maturity benefits to provide higher education to the child or for the marriage of the girl.

  • Q2. What is the surrender policy associated with the LIC kanyadan plan?

    A2. The policy can be surrendered by the insured after the three years of the completion from the date of the commencement of the risk. The surrender value will depend upon the terms and conditions stated by the insurer.

  • Q3. Which riders are available with the LIC Kanyadan policy?

    A3. Accidental death benefit rider is available with the kanyadan policy and provides financial security to the nominee when the insured dies in an accident.

  • Q4. Is there any benefit offered by the insurer for buying a policy with a higher sum assured?

    A4. The insurer provides a rebate on the premium for buying a policy with a higher sum assured. The higher sum assured not only provides better financial independence for the future of the child but also provides a discount on the premium amount.

  • Q5. What are the premium payment modes available with the LIC Kanyadan policy?

    A5. The buyer of the policy gets a series of premium payment methods, and the payment can be made in yearly, half-yearly, quarterly, and monthly modes. For monthly payments, only an electronic clearing system is available in which the insured has to sign the ECS mandates, which are presented by the insurance company with the banker of the insured.

  • Q6. What is the benefit of an accidental death benefit rider?

    A6. Accidental death benefit rider is provided by the insurance providers to enhance the coverage of an insurance plan. In a scenario that insured dies in an accident, the nominee of the plan will get an additional sum assured other than the basic sum assured of the life insurance plan. The rider will help in having more financial independence for the family of the insured and will also increase the coverage of the policy. There are many people who have been benefited by the rider, and that's the reason the rider is being provided in the LIC Kanyadan plan. The premium of the rider is also less, and the added benefits are multiple. One can insure life with a higher sum assured with just one policy. There is no need to purchase another policy for covering accidental death situations.

  • Q7. Can I have a different life insurance plan other than the LIC Kanyadan plan?

    A7. Yes, there is no restriction on the insurance policy to the holders of the LIC Kanyadan plan. The insured can buy another life insurance plan with the same or different provider and continue paying the premium of the Kanyadan plan.

Written By: Paisawiki - Updated: 12 April 2021