Understanding LIC AmritBaal Plan (Plan No. 874): A Comprehensive Overview

 The LIC AmritBaal Plan (Plan No. 874) is a child-focused insurance-cum-investment policy designed to provide financial security for your child's future needs, such as higher education. Below are the key features and benefits of the plan:


Key Features:

  1. Guaranteed Additions: Guaranteed additions of ₹80 per ₹1,000 of the Basic Sum Assured (BSA) accrue annually. For example, with a BSA of ₹5 lakh over a 20-year term, total additions amount to ₹8 lakh.
  2. Maturity Benefit: Upon maturity, the policyholder receives the BSA along with accrued guaranteed additions. For instance, with a ₹5 lakh BSA, the maturity benefit would total ₹13 lakh over 20 years.
  3. Flexible Premium Payment Options:
    • Limited Premium: Pay premiums for a fixed term (e.g., 7 years) and enjoy policy benefits over the policy term.
    • Single Premium: Pay a one-time premium for the entire term.
  4. Death Benefit Options:
    • Offers multiple payout options to beneficiaries, including lump-sum payments or installments over 5, 10, or 15 years.
  5. Premium Waiver Benefit Rider: This optional rider waives all future premiums in case of the proposer's death, ensuring the policy continues until maturity.

Limitations:

  1. Low Returns: The policy's IRR (Internal Rate of Return) is approximately 5.5–6%, which is lower compared to inflation-adjusted returns required for education.
  2. Insurance on the Child’s Life: The life insurance covers the child, not the earning parent, which might not align with the primary goal of financial security.
  3. Taxable Maturity Proceeds: If the life cover is less than 10 times the annual premium, the maturity proceeds are taxable.

Who Should Consider This Plan?

  • Parents looking for guaranteed returns and a disciplined saving structure for their child's future may consider this plan. However, it is more suitable for those seeking conservative investment options rather than higher growth returns.

Alternatives:

If you're looking for higher returns to combat rising education costs (inflation around 10-12%), exploring Equity-Linked Savings Schemes (ELSS) or other mutual fund options may be more effective for long-term goals.

For more details on the plan, contact 97919 33344, 97519 33344

Comments

Post a Comment

Popular posts from this blog

Prospecting

Image
 TYPICAL OBJECTIONS WE ENCOUNTER WHEN WE MEET LIFE INSURANCE PROSPECTS • I don't need Life Insurance.  • I have plenty or don't have Money. • I will tell you Later.  • Returns are not good.  • Alternative investments (MF/Shares/Property/Gold etc).  • I will buy it from my Relative / Friend. • I will speak with my CA and let you know.  • Other Cheap life insurance products are available in market. • My income tax planning is done. • Life insurance is only for death.  • I will ask and let you know.  • What will be the value of the money after long period?  ONE SINGLE ANSWER Please give us an opportunity to meet you and we will help address and resolve each of the objections, very effectively and efficiently. And all to your benefit. 
Read more
Image
   Key Features and Benefits of LIC LIC offers several unique benefits, making it a preferred choice for life insurance in India. Here are some of the key features: Strong Financial Foundation : LIC’s established track record and government backing provide a level of stability and security that few insurance companies can match. Variety of Plans : LIC offers a wide range of policies to cater to the varied needs of customers, including term plans, endowment policies, whole life plans, money-back policies, and pension plans. High Claim Settlement Ratio : LIC boasts one of the highest claim settlement ratios in the industry, a testament to its reliability and commitment to fulfilling customer claims. Widespread Accessibility : LIC operates through a vast network of branches, agents, and digital channels, ensuring accessibility even in remote areas. Bonus Additions : Most LIC policies participate in the corporation’s profits, with bonuses declared annually, adding value to policyh...
Read more