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Child Fortune Plus (Unit Linked Children Plan)


Child Fortune Plus


Table No. 194
(Unit Linked Children Plan)
Unique Identification No. 512L251V01


Today, life is highly competitive. Education and settling in life entails high costs. Parents therefore need to make provision, in advance, for good education for their children. Children also need financial support for entering business/career.
L.I.C now introduces a new plan to take care of these needs - a Unit Linked Children Plan, which will be allowed to the parents who have a child up to the age of 17 years (last birthday). The plan, besides offering risk cover, also offers waiver of all future premiums including outstanding premiums in case of early death of proposer. On Maturity, which will be when the child completes 25 years of age or proposer attains 75 years, fund value will be paid as maturity amount.

How does the plan work?
You can choose the specified level of protection according to your need. Part of premium paid is adjusted towards mortality and administrative charges and rest is invested in the fund of your choice. Entry into the fund will be based on the unit value of the fund applicable on the date of policy issue.

What are the benefits available on death during the term of the Policy?
The policy will be issued to the parent. There will be no insurance coverage on the life of the child. In the unfortunate event of death of the parent, sum assured will be paid to the nominee. Also, in case of regular premium policies, payment of all future and outstanding premiums shall be waived and policy will continue.

What happens if the child dies before the death of the parent?
The Policy will continue till maturity or till the policy holder survives, whichever is earlier.

What happens if the policy holder dies after the death of the child?
In this case the policy will terminate and sum assured along with fund value together with an amount equal to all the future premiums including outstanding premiums, if any, shall be payable to the nominee / legal heir as the case may be. This will also be applicable in case of simultaneous death of life assured and the child nominee.

What are the maturity benefits?
The policy matures on the completion of the term of the policy. On maturity date, you will get value of units.

Do I have the option to receive the maturity amount later when stock market is up?
Yes. The Plan has a provision to receive the maturity amount in 5 yearly or 10 half yearly installments. The installment amount shall be total no of units as on the date of maturity divided by total number of installments. The no. of units arrived at in respect of each installment will be multiplied by the NAV as on the date of installment payment.

What are different Fund Types and how will they help me?
Different Fund Types have been created keeping in mind risk profile of the policyholder. You have the option to choose how you want your investments to grow. Following are the Fund types and their objectives:

Ø  Growth Fund: If high growth is your priority, this is the fund for you. You can enjoy long-term capital appreciation from a portfolio that is invested primarily in equity and equity-related securities.

Ø  Balance Fund: If you prefer a balance of growth and steady returns, choose Balance Fund. This would ensure that your portfolio is invested in equity and equity-linked securities as well as in Government / Government Guaranteed Securities.

Ø  Secured Fund: If you prefer steady return, choose Secure Fund. This would ensure that your portfolio is invested primarily in Short-term investments such as money market instruments including Govt. Securities.

Ø  Bond Fund: The objective of this fund is to attempt to ensure capital protection by investing in very low-risk investments like call and cash money markets. However, the returns generated may also be on the lower side due to the investment pattern.
Fund      
Asset Mix
Potential Risk Reward
Bond Fund
Govt./Govt. Guaranteed Securities : Min 60%
Money Market Instruments : Max 40%
Low Risk
Secure Fund
Govt./Govt. Guaranteed Securities : Min 45%
Money Market Instruments : Max 40%
Investment in Listed Equity Shares:
Min 15% Max 55%
Moderate
Balance Fund
Govt./Govt. Guaranteed Securities : Min 30%
Money Market Instruments : Max 40%
Investment in Listed Equity Shares:
Min 30% Max 70%
Average
Growth Fund
Govt./Govt. Guaranteed Securities : Min 20%
Money Market Instruments : Max 40%
Investment in Listed Equity Shares:
Min 40% Max 80%
High

Can I switch between different funds?
If at a later stage your financial priorities change, you can switch between different funds at any time. There is a provision of 4 free switches every policy year. Any switch beyond this limit will be charged at Rs.100/- per switch. Partial switching is not allowed.

Can I invest additional money?
Yes. You can pay Top-ups in multiples of Rs. 1000/- at anytime during the term of the policy without increasing the sum assured. At any point of time, the total of top-up premiums cannot exceed 25% of total regular premiums paid till date at any point in time or 25% of single premium paid.

What are the Entry Conditions?

Ø  You should be between 18 Years (Completed) and 55 Years (Near Birthday).

Ø  Child should be between 0 years to 17 years (last birthday).

Ø  The Min Annual Premium is Rs. 10,000 under regular premium (other than monthly ECS) and Rs. 1,000 p.m. in case of monthly (ECS) mode.

Ø  There is no limit on Maximum Premium.

Ø  Min Sum Assured is 5 times of the annual premium or 1.25 times the Single Premium.

Ø  Max Sum Assured is 25 times the annualized premium if age at entry is up to 45 years near birthday and 15 times the annualized premium if age at entry is 46 years and above.

Ø  Max Sum Assured is 5 times of the single premium if age at entry is up to 35 years nearest birthday and 2.5 times of the single premium if age at entry is 46 years nearest birthday and above.

Ø  Sum Assured shall be available in multiples of Rs. 5,000 and Annualized premiums shall be payable in multiples of Rs. 1,000. In case of monthly (ECS) mode, premium should be multiple of Rs. 250.

Ø  Term allowed will be 25 minus age last birthday of child at entry or 75 minus age nearest birthday at entry of policy holder whichever is less.

What are the Exit Options?
You can either surrender the policy or you can partially withdraw the amount. If policy is surrendered before completion of 3 years the unit value on the date of surrender is paid but only after completion of 3 years. But once premium has been paid for 3 years and policy is surrendered, full unit value is paid on date of surrender. The partial withdrawal is allowed only after completion of 3 years subject to following conditions:

Premium Paid
Maximum Withdrawal Allowed
Less Than 3 Years
Nil
3 Years Or More
Fund Value Minus 2 Annualized Premiums
Under Single Premium
Fund Value Minus ( 5000 Or 10% Of Single Premium ) Whichever Is High




After the death of the policy holder during the policy term, partial withdrawal may be made by the child named in the policy if he/she is major i.e. after completion of 18 years of age or by the appointee if the child is minor subject to an undertaking by the appointee that the partial withdrawal is solely for the benefit of the named child.

What would be the charges on the policy?
Premium Allocation: The allocation of premium will depend on the annual contributions made. The allocation will be as follows



Mode Of Premium
Premium Band
Allocation Rate


1st Year
2Nd Year & 3rd Year
Thereafter
Single Premium
Up To 10,00,000
95.75%
96.75%

10,00,001 And Above
96.00%
96.00%

Regular
10,000 To 1,00,000
71.00%
95.00%
97.50%
1,00,001 To 1,50,000
71.50%
95.00%
97.50%
1,50,001 To Rs.2,00,000
72.00%
95.00%
97.50%
Rs,2,00,001 And Above
72.50%
95.00%
97.50%
Topup
Any Amount
98.75%





Mortality Charges : Mortality charges include Life Cover Charges and Premium waiver Benefit charges (Applicable only in case of Regular Premium). It will be based on the age at the policy anniversary and hence may vary every year. Life cover charge will depend on sum assured chosen and premium waiver benefit charge will depend on the total amount of all the future premiums including outstanding premiums.

Switching Charges : Except for the 4 free switches allowed every policy year, all other switches will be charged at Rs. 100 per switch.

Administrative Charge : A Flat fee of Rs. 60 per month will be charged for the 1st year, Rs. 20 per month during the second year and thereafter from the third year onwards till the end of the policy term Rs. 20 per month escalating at 3%p.a.

Fund Management Charge : The Fund Management Charge (FMC) for the various funds will be as follows:
             
Fund Type
Charges
Bond Fund
0.60 % P.A Of Unit Fund
Secure Fund
0.80 % P.A Of Unit Fund
Balanced Fund
1.00 % P.A Of Unit Fund
Growth Fund
1.20 % P.A Of Unit Fund


FMC will be deducted on the date of computation of NAV. NAV, thus declared, will be net of FMC.

Service Tax : A Service tax charge will be levied on the Mortality Charges, Administrative Charges, Premium Allocation Charge, Fund Management Charge, Switching Charge and alteration charge. The level of this charge will be as per the rate of service tax applicable from time to time.

Is there any exemption available in income tax ?
Income Tax : The premium paid is exempted up to Rs. 1,00,000 under Sec 80C.

What happens to my policy if I miss out on premiums ?
If you miss out on premiums, we will ensure that you continue to be covered for further years but before the expiry of Revival Period. During the revival period we will adjust all charges against your unit fund provided premiums have been paid for min 3 years.
Later, you can pay the premiums without any interest before the revival period. You can also opt for continuation of cover even beyond revival period without reviving the policy. If this option is availed, the life cover and premium waiver benefit cover under the policy shall continue by deduction of relevant charges out of policy fund. This option shall continue till the policy holder's fund value reaches one annualized premium. No further premiums shall be allowed to be paid after the revival period is over.

What happens to my policy if I miss out on premiums before paying 3 years premium?
In this case the life cover and premium waiver benefit cover shall cease and no charges for these benefits will be deducted. However deduction of all the charges will continue till the revival period or completion of 3 years from the date of commencement of policy which ever is later. During this period if the death occurs, Fund value will be paid to the nominee/legal heirs as the case may be.

How will the revival period be determined?
Revival Period will be two years from the due date of first unpaid premium or till the date of maturity or till such period that the policy holder's fund value reduces to one annualized premium.

Is there any loan available ?
Though No Loan is available under this plan, you can always partially withdraw the value of units for your immediate needs.