LIC Child Education Plans (Plans 934 & 932): Actuarial & Milestone Guide
Higher education costs in India and abroad are experiencing educational inflation in excess of 10% per annum. To guarantee that a child's professional aspirations—whether in medicine, engineering, management, or creative arts—are never jeopardized by financial constraints, the Life Insurance Corporation of India offers specialized child future products: LIC Jeevan Tarun (Table No. 934) and LIC New Children's Money Back Plan (Table No. 932).
Both policies are participating, non-linked contracts that fix the maturity year at the exact milestone when the child reaches 25 years of age. Premium payments stop earlier (when the child turns 20), providing timely financial liquidity when college tuition fees peak.
LIC Jeevan Tarun (Plan 934): Four Survival Benefit Options
At the time of policy purchase, parents can select one of four survival benefit options to determine how payouts are spread across ages 20 to 24:
0% annual survival benefits; 100% of Sum Assured + bonuses paid as a single lump sum at age 25.
5% of SA annually from age 20 to 24 (total 25%), and 75% of SA + bonuses at age 25.
10% of SA annually from age 20 to 24 (total 50%), and 50% of SA + bonuses at age 25.
15% of SA annually from age 20 to 24 (total 75%), and 25% of SA + bonuses at age 25.
The Essential Premium Waiver Benefit (PWB) Rider
Why PWB Rider is Non-Negotiable
In a child policy, the child is the life assured while the parent is the proposer and premium payer. If the parent passes away prematurely without the Premium Waiver Benefit (PWB) Rider, the policy may lapse due to non-payment of premiums. With the PWB Rider added, all future premiums upon the parent's death are instantly waived by LIC. The policy continues seamlessly, and the child receives every single survival cashback and maturity bonus as planned.
Statutory GST & Income Tax Exemption (FY 2026-27)
GST Application Rules
- Year 1 Premium: 4.5% statutory GST (2.25% CGST + 2.25% SGST).
- Year 2 Onwards: 2.25% statutory GST (1.125% CGST + 1.125% SGST).
Section 80C & Section 10(10D)
Premiums qualify for tax deductions up to ₹1,50,000 under Section 80C. All survival payouts and the final age 25 maturity lump sum are 100% tax-free under Section 10(10D).
Frequently Asked Questions (FAQ)
What are the four survival benefit options in LIC Jeevan Tarun (Plan 934)?
At inception, parents choose how funds are disbursed during ages 20 to 24: Option 1 pays 0% annual survival benefit and 100% SA at maturity (age 25); Option 2 pays 5% SA yearly (total 25%) and 75% at age 25; Option 3 pays 10% SA yearly (total 50%) and 50% at age 25; Option 4 pays 15% SA yearly (total 75%) and 25% at age 25. All options receive full accumulated bonuses at maturity.
What is the milestone payout schedule in LIC Child Money Back (Plan 932)?
Plan 932 pays 20% of the Basic Sum Assured at the child's age 18, 20% at age 20, 20% at age 22, and the remaining 40% of Sum Assured plus all accrued bonuses and Final Additional Bonus at age 25.
Why is the Premium Waiver Benefit (PWB) Rider critical in child plans?
The PWB Rider ensures that if the parent (proposer) dies during the premium paying term, all future premiums are completely waived off by LIC. The policy continues without any payment, and the child receives all scheduled survival cashbacks and maturity lump sums on time.
What are the entry age limits and maturity age for LIC child plans?
The child's entry age can be between 90 days completed and 12 years. The policy term is equal to 25 minus the child's entry age, and the premium paying term is equal to 20 minus the child's entry age. The policy always matures when the child completes 25 years of age.
Are maturity proceeds and survival benefits tax-exempt in child plans?
Yes, under Section 10(10D) of the Income Tax Act, all periodic survival installments, death claim proceeds, and maturity amounts are 100% tax-free.
Case Study: 2-Year-Old Child, ₹10 Lakh SA, Option 4 (Jeevan Tarun)
Consider a father planning college funds for his 2-year-old child under Plan 934:
- Policy Term & PPT: Policy term is 23 years (matures at age 25). PPT is 18 years (premiums stop when child turns 20).
- Survival Benefit Payouts (Option 4): 15% of Sum Assured (₹1,50,000) is paid every year on the child's 20th, 21st, 22nd, 23rd, and 24th birthdays—totaling ₹7,50,000 for undergraduate tuition.
- Maturity Payout at Age 25: Remaining 25% of Sum Assured (₹2,50,000) + full vested bonuses (approx. ₹44 × 1,000 × 23 = ₹10,12,000) + FAB = approximately ₹13,50,000.
- Total Benefits Received: ₹7,50,000 + ₹13,50,000 = ₹21,00,000 completely tax-free under Section 10(10D).
