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LIC New Children’s Money Back Plan

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LIC New Children’s Money Back Policy – An Overview

Children are the tomorrow of our nation, our culture and heritage. Parents strive to provide essentials, comforts and luxuries to their children in their best capacity and want to see them well settled. To cater to the same thought, LIC has come up with a New Children’s Money Back Plan to suffice the multitude of needs that children may have when they’re grown up and it gives the parents to an opportunity to save money while they are the peak of their earning years for the latter years of growth, career, education and marriage for their children.

What is LIC New Children’s Money Back Policy – LIC Plan No. 932, UIN – 512N296V02?

LIC New Children’s Money Back Plan is an Individual Life Assurance money back plan which is Non-linked and Participating in nature. This plan is originally intended to meet the educational, occupational, marriage and other basic needs of growing children through Survival Benefits. Additionally, it provides protection and security for the child’s life in the form of life insurance policy and further secures the number of survival benefits when the insured survives till the end of the duration of the term of the plan. Parents or Grandparent of children aged between 0 to 12 years can purchase this policy.

Features of the LIC New Children’s Money Back Policy

Minimum entry age 0 years (can start at birth)
Maximum Entry Age 12 years
Sum Assured Minimum – Rs. 1 lakh, Maximum – No Upper Limit
Age at Maturity 25 years
Plan Type Money-Back Plan that is participating and non-linked
Basis of Plan Individual
Policy Term 25 years minus entry age, example if the entry age of the child is 9 years then the policy term will be 25 – 9 = 16 years
Maturity Benefits Sum assured plus the applicable bonuses
Frequency of Premium Payment The premium can be paid on a monthly basis/ or quarterly/ bi-annually and annually.
Loan availability Yes, Loan is available on these plans
Grace Period For a monthly payment, the grace period is 15 days for all other modes it is 30 days.
Free Look-in period Also known as the cooling-off period is of 15 days from purchasing the policy
Revival The revival of lapsed policies is possible within 2 years of the last lapsed payment only after the policyholder has paid the outstanding amount.
Policy coverage It covers all the three benefits – death benefit, maturity benefit and survival benefit.
Paid Up coverage Yes
Surrender Accepted after two years
Additional Riders Yes

Benefits of LIC New Children’s Money Back Plan

Here is a rundown to the core benefits offered by LIC New Children’s Money Back Policy:

Death Benefits

If the policyholder dies due to an unfortunate mishap during the policy term and all the due premiums have been duly paid then the benefits will be as under on death before the date of commencement of risk:

  • An amount equal to the total amount of premium paid minus any extra premium, rider premium or taxes will be payable
  • Death Benefit will also include vested Simple Reversionary Bonuses and Final Additional Bonus if any

Sum Assured on Death is defined as the higher of the Basic Sum Assured or 7 times of annualized premium. The death benefit cannot be lower than 105% of the number of total premiums paid till the date of death. The premiums mentioned above exclude taxes, extra premium and rider premium if any. (*Standard T&C Apply)

Maturity Benefits

If the policyholder survives the Policy Term and the plan is still in force then the maturity benefits i.e. the sum assured plus the bonuses wherein the sum assured on maturity will be equal to 40% of the basic sum insured. (*Standard T&C Apply)

Survival Benefits

If the Policyholder survives each of policy anniversary at the age of 18 years, 20 years and 22 years, in all here cases a 20% of the basic sum assured will be payable on each occasion with the conditions that the policy should be in force and should not have been lapsed with no pending premiums or dues. (*Standard T&C Apply)

Corporation Profits

LIC New Children’s Money Back Plan is a participating policy which means that any profits or bonuses arising out of the corporation like the Simple reversionary or final additional bonuses will be payable to the policyholder. Final Additional Bonus shall not be payable under paid-up policies. The percentage of allocation of these bonuses is decided and approved by the central government under the LIC Act, 1956.

Surrender Value

When the policyholder has paid up the premium towards his policy for at least two years, the insured has the privilege of surrendering his policy and LIC will pay the higher of the following amounts:

  • A Guaranteed value of the amount Surrender
  • The special value of Surrender

The special value of surrender is decided by LIC after approval by IRDAI.  

Rebates and Discounts

2 types of Rebate or Savings can be gauged by purchasing the LIC New Money Back Policy - 20 years: (*Standard T&C Apply)

Mode of Payment Rebate

Annual Mode 2% of the Tabular Premium
Bi-Annual Mode 1% of the Tabular Premium
Quarterly/Monthly NACH and Salary Deduction NA

High Sum Assured Rebate on Premium

Basic Sum Assured Rebate
Rs. 1 Lakh to 1.90 Lakh NIL
Rs. 2 Lakh to 4.90 Lakh 2 per thousand of Sum Assured
RS. 5 Lakh and above Per thousand of Sum Assured


Again, after completing the tenure of two years of keeping the New Children’s Money Back Plan by LIC and paying the premiums appropriately, the policyholder can apply for a loan to fulfil his financial emergencies. This will be done in accordance with the terms and conditions of the policy as specified by LIC and the maximum amount that can be given as loan amount is a percentage of the surrender value which could be any of the below:

  • Up to 90% of active and in force plans under LIC
  • Up to 80% of paid-up policies

Any interest that is payable by the policyholder towards the loan taken under this plan is pre-decided by the corporation and is updated periodically. After getting prior approvals from IRDAI, these will be intimated by LIC and can change from time to time. Even if the loan is unpaid by the end of the maturity time of the plan, the same can be deducted by the total amount of maturity and the balance will be paid out to the insured as maturity benefit.

(*Standard T&C Apply)

Inclusions of the LIC New Children’s Money Back Policy

LIC New Children’s Money Back Policy has the following inclusions:

Eligibility Conditions (*Standard T&C Apply)

Minimum Sum Insured Rs 100000
Maximum Sum Insured Unlimited
Minimum entry age 0 years
Entry age (Maximum) 12 years till the last birthday
Age of Maturity (Maximum) 25 years till the last birthday
Term of Policy and Term of Paying  Premium 20 years and 15 years
Risk beginning date Immediately
Vesting  date In case the main insured person is minor then the policy will in name of the minor only after he/she completed 18 years of age.

Additional Riders - LIC’s Premium Waiver Benefit Rider:

LIC New Children’s Money Back Plan includes LIC’s Premium Waiver Benefit Rider (UIN: 512B204V03): The Policyholder can opt for this rider at any point of time within the policy term provided it is still in force and active. The condition is that the difference between the outstanding term of the premium payment of the Base Policy and the rider is at least five years. The other condition is that the Policy Holder should be a minor at the time of applying for the rider.

Conditions wherein the rider cannot be bought along with the LIC New Children’s Money Back Plan:

  • If the LIC’s Premium Waiver Benefit Rider Term plus policy holder’s age is more than 70 years, then the rider will not be allowed
  • On the death of the policyholder before the completion of the policy term, the remaining premiums will be waived off and the benefits will be payable as usual to the proposer
  • The premium for this ride shall not exceed 30% of premiums under the plan
  • Benefits under this Rider shall not exceed the Basic Sum Assured under the policy
  • Premium Paid (example) for LIC New Children’s Money Back Policy (*Standard T&C Apply)

Let us take the below-mentioned example to understand the premium amount that can be estimated to be paid annually (excluding taxes). (*Standard T&C Apply)

Age Sum Assured Premium
0 Rs. 1 Lakh Rs. 4327
5 years Rs. 1 Lakh Rs. 5586
10 years Rs. 1 Lakh Rs. 7899
12 years Rs. 1 Lakh Rs. 9202

Grace Period

The policyholder needs to pay the premium each month on time and in the failure of doing so, a grace period of 30 days will be granted to the insured to make the payment, if the policyholder fails to make this payment then the plan stands lapsed.

Free Look Period

A cooling period of 15 days is provided to the policyholder to understand the policy terms and see if he is satisfied with the plan. In case he is not content, he has the liberty to withdraw the policy and he will receive a full refund of the premium paid towards the policy.

Settlement of Maturity or Death benefits in Instalments

When the policy or plan is active, the insured has the option of settling his maturity payout in a lump sum amount or easy instalments divided in 5,10 or 15 years. This contingency can be opted for after the policy term has been completed and under the following modes and amounts 9example stated below): (*Standard T&C Apply)

Mode of payment Minimum Instalment
Monthly Rs. 5000
Quarterly Rs. 15000
Half-yearly Rs. 25000
Yearly Rs. 50000

If the claim amount is less the total amount of claim, then no instalment option will be provided, and payment will be made as a lump sum amount. Interest rates payable will be fixed and paid as approved by IRDA and further followed by LIC which keeps getting updated with time.

Paid-up Policy

If the policy is paid up for up to 3 years premium, then the paid-up sum assured also reduces proportionately. Now this plan cannot be considered as a void policy and can be reduced to the following options:

Death Paid-up Sum Assured

In case of unfortunate death of the policyholder, the death pay-out will the total number of premiums paid towards the policy/ Total number of premium years payable multiplied by the sum assured on death.

Maturity Paid-up Sum Assured

In case of Maturity of the policy the calculation will be as follows: (Total Number of premiums paid/Total amount payable) multiplied by (Sum Assured on Maturity + Total Survival Benefits which are to be paid as per the rules and regulations of the plan) Minus Total amount of benefits already paid out to the policyholder.


Taxes will be imposed as per the updated taxation and statuary rules and policies.  As per the Income-tax Act, 1961 any amount of tax that is payable by the policyholder, should be paid in excess of the amount of premium in that specific financial year besides the premium which needs to be paid too separately. This amount of Tax paid does not affect the calculation of benefits payable under the plan. “Tax benefit is subject to changes in tax laws”.

Exclusions of LIC New Children’s Money Back Plan

There are a few conditions when the claim for the new Children’s Money Back Policy won’t go through which are as follows:

Situation 1 – If the policyholder is below 8 years of age and he/she commits suicide within 12 months of the commencement of the money-back policy, in this case, the corporation will pay out only 80% of the actual premium paid by the policyholder in all these months minus the extra premium (if any) paid by him and minus the service taxes.

Situation 2 – This is not applicable if the age of the policyholder is less than 8 years old or if the policy in the conversation has lapsed. In this situation, if the policyholder commits suicide within 12 months of the commencement of the plan, then LIC will only pay an amount that is higher than 80% of the premium paid till the date of death and the payout of the survival value minus the service taxes or any extra premium paid during those months.

How to Renew a LIC New Children’s Money Back Policy which has lapsed?

The renewal process of LIC New Children’s Money Back Policy that has lapsed:

  • If there is no payment towards the premium of the policy even during the grace period that is granted by the corporation, the plan will stand lapsed in this situation
  • In this case, the policy that has been lapsed can only be revived if the premium and other dues are paid within 5 years starting from the date when the policyholder stopped making the premium payment but this should be done before the end of the maturity period and date
  • The policyholder needs to pay the pending amount of premium plus any arrears or due regarding the policy including the half-yearly interest that is at a compounding rate decided by LIC after approval from IRDAI which gets revised time and again
  • The policy will only be revived if the corporation is convinced and satisfied with the documents, reasons and explanations offered by the policyholder. Any additional information that may be required by the corporations needs to be immediately furnished by the policyholder to revive his policy
  • LIC also possesses the right to revive the policy on the same agreement on which It was previously issued or it can also update the terms and conditions, or it can also decline or repudiate the policy if not satisfied with the information provided
  • In case the policyholder has already cumulated the revival rider along with the policy document that too shall be considered

Documents required to Purchase the LIC New Children’s Money Back Plan

The following documents are required to buy the LIC New Children’s Money Back Policy:

  • Duly filled plan application form or proposal application form with the latest photograph of the applicant attached
  • The complete medical history of the policyholder will be required and needs to be attached with the policy documents
  • KYC documents like ID proof, Age Proof, Address Proof etc.
  • There could be a few cases wherein a medical examination may be required of the policyholder depending on the amount of the sum assured and the age of the child

Steps to buying LIC New Children’s Money Back Plan

LIC New Children’s Money Back Plan can be bought online and offline through a dedicated LIC representative or by visiting the nearest LIC Branch. The step-by-step process for buying LIC New Children’s Money Back Plan is as follows:

Step 1: One needs to visit the website of LIC for buying LIC New Children’s Money Back Plan. Then he can select the desired plan that is the New Children’s plan by clicking on the ‘buy policies online’ tab.

Step 2: Then the applicant needs to select the sum assured amount and choose the required policy term. The policyholder can also choose the option for payment of premium from single, regular and limited options and also opt for the required mode of premium payment from monthly, quarterly, yearly, half-yearly modes. The policyholder needs to input the details about the childlike his gender, date of birth, and other relevant details.

Step 3:  After submitting all the necessary details and filling the form with all requisites, the premium calculator will calculate the premium amount taking the relevant factors into consideration.

Step 4: Then the individual needs to input his personal information like date of birth, name, profession, gender, address, academic qualifications and complete the form online.

Step 5:  The applicant needs to pay the premium online using his net banking/debit or credit card/ IMPS, NEFT or other modes and complete the requirements of buying the policy.

Claim Process of LIC New Children’s Money Back Plan

The Vital steps are:

  • Intimation of Claim at the corporation
  • Submission of Documents
  • The decision on Claim by LIC

How to Intimate to LIC?

One can intimate online or go to a nearest LIC Branch using the following information:

  • Policy Number
  • Name of the Claimant
  • Name of the Life Assured
  • Date of death/event of the Life Assured
  • Cause of the Death/event
  • Contact Details

Once the claim is registered, a Claim Reference/Intimation Number will be generated and has to be preserved for further correspondence.

Death Claim

Below is the process for death claim:

  • A death claim needs to intimated as soon as possible
  • Please ensure timely submission of claim file for speedy decision
  • Probability of investigation is less if the policy is more than 3 years old

List of Documents required in case of Death Claim

The following is the list of documents required for death claim:

  • Mandatory Death Certificate
  • Proof of age of the life assured
  • Deeds of assignment
  • Policy document
  • Statement from the hospital if the policyholder had been admitted to hospital
  • Certificate of medical attendant giving details of his/her last illness
  • Certificate of cremation or burial
  • Certificate by the employer if the deceased was an employee
  • If the life assured had a death due to accident, murder, suicide or unknown cause the police inquiry report, FIR, post-mortem report, etc. would be required


  • Q1. What are the Benefits of buying LIC New Children’s Money Back Plan?

    Ans. LIC New Children’s Money Back Plan has many benefits like:

    • Supports in paying for the school fees of children
    • Can take care of other hobbies, extracurricular or activities that are expensive and are not easily affordable like joining a sports team
    • Funding of Higher Education of the child
    • Wedding, marriage or related expenses of the child
    • Avoids capital erosion

    (*Standard T&C Apply)

  • Q2. What are the different modes of payment to pay for LIC New Children’s Money Back Policy?

    Ans. There are different modes of payment through, which payment of premium can be paid towards the corporation like:

    • Cash/Cheque/Draft at the branch or counters
    • Online Payment using Debit or Credit Card
    • NEFT/IMPS or RTGS payment
    • ECS
    • Easy Bill Pay
    • Phone Banking
    • Net Banking
  • Q3. How can we revive the LIC New children’s Money Back Policy within two years if it lapses?

    Ans. We can revive the policy by getting in touch with the customer care department of LIC or by following the revival process online.

    Q4. Why should one buy the LIC New children’s Money Back Policy?

    Ans. The main reasons to buy this plan are:

    • Financial benefits accruing out of this plan at different periods of the policy term which can be diligently utilised towards the benefit of the children
    • Tax exemptions under section 80 C available on the total amount of premium paid towards the policy. (* Tax benefit is subject to changes in tax laws)
    • The accrued bonus offered on the maturity amount is quite high and good
    • Maturity amount is tax-free
  • Q5. What is the meaning of Simple Reversionary Bonus or a Final Addition Bonus?

    Ans. Simple Reversionary Bonus is declared annually by the end of every financial year.  Once declared, they form part of the guaranteed benefits of the plan. Bonuses will be added during the selected term or till death if it occurs earlier. Simple Reversionary Bonus accrues during the premium paying term and is paid at the end of the premium paying term or on earlier death along with the final additional bonus if any. No bonus is paid on death after the premium paying term.

    Final Addition Bonus may also be payable provided the policy has run for a certain minimum period. This is not guaranteed.

  • Q6. What is a Children’s Money Back Plan?

    Ans. A Money-Back plan is an amalgamation of insurance plus investment that too a periodic investment which can be used at important occasions. This is most suitable for children who have different needs at different ages and this where this new children’s money-back policy by LIC comes into significance. An amount is paid after a fixed interval of time and a final maturity amount which normally is 40% of the total sum assured. The premium could be a little higher for such plans and policies, but the returns and investment are quite lucrative and highly beneficial for children.

  • Q7. Who should buy LIC New Children’s Money Back Policy?

    Ans. The following people can buy this plan:

    • Minimum and Maximum entry Age children between 0 to 12 years
    • Minimum and Maximum maturity Age is 25 years
    • Policy Term = [25 – Age at Entry] years
    • Minimum basic sum assured is 1,00,000
    • Young parents who are planning to secure their child’s future educational expense or wedding or any other crucial expense
    • Grandparents looking out for safe investment plan for their grandchildren’s future
    • People looking out for low-risk investment option
  • Q8. Explain the Survival and Maturity Benefits using an example?

    Ans. Under the LIC New Children’ Money Back Policy, the policyholder would be eligible to receive the 1st, 2nd & 3rd instalment of Survival Benefits in addition to the Maturity Benefit.

    • Survival Benefit after he turns 18 = 20% of Basic Sum Assured = 20% of Rs. 1,00,000 = Rs. 20,000
    • Survival Benefit after he turns 20 = 20% of Basic Sum Assured = 20% of Rs. 1,00,000 = Rs. 20,000
    • Survival Benefit after he turns 22 = 20% of Basic Sum Assured = 20% of Rs. 1,00,000 = Rs. 20,000

    Maturity Benefit = 40% of Basic Sum Assured + Simple Reversionary Bonuses + Final Addition Bonus after which the policy terminates.

  • Q9. What are the Tax Benefits gained under LIC New Children’s Money Back Plan?

    Ans. Tax Benefits are as follows: (* Tax benefit is subject to changes in tax laws)

    • Tax Benefits on Premiums Paid: Exemption under section 80C
    • Tax Benefits on Death Benefit Amount: Exemption under section 10(10D)
    • Tax Benefits on Survival & Maturity Amount: Exemption under section 10(10D)
  • Q10. Illustrate and give an example of Benefit gained under LIC New Children’s Money Back Plan?

    Ans. Let us take the following example into consideration: (*Standard T&C Apply)

    • Age of the child who is insured – 12 years
    • Policy Term – 13 years
    • Premium Payment Mode – Annual
    • Basic Sum Assured – Rs. 1 Lakh
    • Premium (excluding any kind of tax) – Rs. 9202

    (Amount is in Rs.)

    End of Year

    Total Premiums paid till the end of the year

    Guaranteed Benefits

    Non-Guaranteed Benefits (Simple Reversionary Bonus)

    Maturity benefits plus additional benefits

    Total Death Benefit plus additional benefits

    Survival Benefit

    Sum Assured on Death

    Sum Assured on Maturity

    Scenario 1

    Scenario 2

    Scenario 1

    Scenario 2

    Scenario 1

    Scenario 2




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Written By: Paisawiki - Updated: 12 April 2021