Features of Children Deferred Endowment Plan
This insurance plan from LIC of India is designed to enable a parent or a legal guardian or any near relative of the child to provide for the child, by payment of a very low rate of premium, the risk under which will commence at a selected age.
The policy envisages two stages, one covering the period from the date of commencement of the policy to the deferred date (date of commencement of risk on the child’s life) called the deferment period, and the other covering the period from the deferred date to the date on which the policy emerges as a claim by the death of the child or its survival to a stipulated date. A combined policy will be issued covering both the aforesaid periods. Policy under the scheme will not be issued for deferment periods less then four years or for maturity ages other than quinquennial.
The special provisions applicable to this policy provide that if the life assured be alive on the deferred date, if all premiums due have been paid, and if a request in writing for receiving the cash option available on the deferred date or for surrendering the policy has not been received by the LIC of India before the deferred date from the person entitled to policy monies, the policy shall vest in the life assured on the deferred date and shall on such vesting be deemed to be a contract between the corporation and the life assured as the absolute owner of the policy and the proposer or his estate shall cease to have any right or interest herein.
The policy will contribute in profits from the date of start of risk at rates applicable to Endowment Assurance. The life assured will have to go through full medical examination. The policy shall automatically vest in the life assured as soon as he/ she attains majority. At the request of the proposer, the premium waiver benefit is available under this plan. Additional premium required for this benefit will be as per the table applicable to C.D.A plan except that the deferment period should be taken as the period equal to 18 minus age at entry. If payment of the premium ceases after at least 3 years premiums have been paid, only guaranteed surrender value, equal to 90% of the total premiums paid excluding the first year’s premium, will be available. During the deferment period, the guaranteed surrender value will be 90% of the total premiums paid, excluding the first year’s premium. After the deferment period, the guaranteed surrender value will be 90% of the total premium paid during the deferment period excluding the first year’s premium paid plus 30% of the premium paid on or after the start of risk.
If the life assured dies, the policy shall stand cancelled before the deferred date, and in such a case provided the policy is then in full force or in force for a reduced cash option, a sum of money equal to all the premiums paid without any deduction whatsoever will become payable to the person entitled to the policy moneys. It should be noted that payment of premium does not cease on the death of the proposer during the deferment period but must be continued during the currency of the policy.
This children’ s plan takes care of the risk at a selected age. One of the main advantages of this plan is that an assurance for a relatively large amount can be secured to a child on reaching eh selected age for a premium substantially smaller than what would be required if the assurance were to be effected at that age, and this irrespective of the state of the child’s/kid’s health then.
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