New Childran's Money Back Policy 2015 - LIC

LIC’s New Children Money Back – Plan Table No. 832 (Launched on 4th March 2015)

LIC’s New Children’s Money Back Plan is a non-linked, with-profit, regular premium payment money back plan specially designed to meet various financial needs of children through Survival Benefits. It provides for the risk cover on the life of child during the policy term and number of survival benefits on surviving to the end of the specified duration’s.

Basic Features of New Children’s Money Back Plan (Table No 832)

• Minimum Age at Entry: 0 Years (Last Birthday)
• Maximum Age at Entry: 12 Years (Last Birthday)
• Proposer’s age :
  • Minimum – 18 years
  • Maximum – 55 years
• Min Sum Assured : 1 Lac
• Max Sum Assured : No limit
• Sum Assured Rebate:
  • upto 1.90 L = Nil
  • 2 to 4.90 L = Rs 2/-
  • 5 L & above = Rs 3/-
• Mode : All modes
• Mode rebate :
  • YLY- 2%
  • HLY- 1%
• Policy Term : 25 minus age i.e. 25 – Age
  • eg. Child’s age is 4 years then Policy term will be 25-4=21 Years
• Premium Term : 18 minus age
  • eg. Child’s age is 4 years then Premium term will be 18-4=14 Years
• PWB available (Premium Waiver Benefit Rider)
• Maturity for below Child Age
  • At 18 = 20% of SA
  • At 20 = 20% of SA
  • At 22 = 20% of SA
  • At 25 = 40% of SA + Bonus+ Final Additional Bonus
• Date of commencement of risk under the plan: In case the age at entry of the Life Assured is less than 8 years, the risk under this plan will commence either one day before the completion of 2 years from the date commencement of policy or one day before the policy anniversary coinciding with or immediately following the completion of 8 years of age, whichever is earlier. For those aged 8 years or more, risk will commence immediately.
• Surrender Value: The policy can be surrendered at any time during the policy term provided premiums have been paid for full three years.
• Loan: Loan facility is available under this plan after the payment of premiums for at least three full years and after obtaining the declaration from the proposer to the effect that loan is raised for the benefit of the minor life assured.
• Suicide Clause: This policy shall be void
• 1. If the Life Assured (whether sane or insane) commits suicide at any time within 12 months from the date of commencement of risk, the Corporation will not entertain any claim under this policy except for 80% of the premiums paid excluding any taxes and extra premium, if any, provided the policy is in force. This clause shall not be applicable in case age at entry of the Life Assured is below 8 years.
• 2. If the Life Assured (whether sane or insane) commits suicide within 12 months from date of revival, an amount which is higher of 80% of the premiums paid till the date of death (excluding any taxes and extra premium, if any,) or the surrender value shall be payable. The Corporation will not entertain any other claim under this policy. This clause shall not be applicable:
  1. in case the age of the Life Assured is below 8 years at the time of revival; or
  2. for a policy lapsed without acquiring paid-up value and nothing shall be payable under such policies.
•  
• 
  
  
• 

Sukanya Samriddhi Account Calculator Sheet

Yearly lump sum Investment– 1.5 Lac (Starting of year)

Rate of Interest – 9.2%

Note: Government of India announced ROI 9.2% for 2015-16 Financial Year

Investment Period – 14 years

Maturity Amount – 80 Lac

Assumption: – Sukanya Samriddhi Account is opened on birth of girl child. Age -1 Year.

View Calculations from below link.

https://onedrive.live.com/redir?resid=26575B2154419A83%21178

Sukanya Samriddhi Yojana Scheme Tax-Free Small Savings Scheme for a Girl Child

“Beti Bachao, Beti Padhao” is the mantra with which Prime Minister Narendra Modi launched Sukanya Samriddhi Yojana on January 22nd this year. Later on, the government issued a notification to allow 80C exemption equal to the amount invested in the scheme up to Rs. 1,50,000, which is also the maximum amount one can invest in this scheme in a financial year.

Now, the Finance Minister in his budget speech has proposed to make the interest component as well as the maturity proceeds as tax-free. I think this proposal has made this scheme to be the best small savings scheme available to the Indian investors. Yes, even better than our golden scheme of Public Provident Fund (PPF). So, what is this scheme all about? Let’s check.

Sukanya Samriddhi Yojana is a small savings scheme which can be opened by the parents or a legal guardian of a girl child in any post office or authorised branches of some of the commercial banks. The girl child is called the “Account Holder” and the guardian is called the “Depositor” in this scheme.

Before I compare this scheme with PPF, let us first check the important features of this scheme.

Salient Features of Sukanya Samriddhi Yojana

Who can open this account? - Parents or a legal guardian of a girl child who is 10 years of age or younger than that, can open this account in the name of the child. For initial operations of the scheme, one year grace period has been provided to make it 11 years of age. With this one year grace period in age, which is valid up to December 1, 2015, you can get this account opened for a girl child who is born between December 2, 2003 and December 1, 2004.

9.1% Tax-Free Rate of Interest - This scheme has been flagged off with a 9.1% rate of interest, higher than that of PPF which stands at 8.7%. But, this rate is not fixed at 9.1% for the whole tenure and is subject to a revision every financial year like all other small savings schemes, including PPF.

Prior to the budget announcement, 9.1% annual return seemed unattractive, but not anymore, as it has been made tax exempt now. Interest amount gets added to your balance amount in the account and compounded either monthly or annually, as per your choice. Monthly interest compounding will be done only on your balance amount on completed thousands.

Duration of the Scheme - The scheme will mature on completion of 21 years from the date of opening of the account. If the account is not closed on maturity after 21 years, the balance amount will continue to earn interest as specified for the scheme every year. In case the marriage of your daughter takes place before the maturity date i.e. completion of 21 years, the operation of this account will not be permitted beyond the date of her marriage and no interest will be payable beyond the date of marriage.

Deposit for 14 years only – Though the scheme has a duration of 21 years, you are required to make contributions only for the first 14 years, after which you need not deposit any further amount and your account will keep earning the interest rate applicable for the remaining 7 years.  

Premature Closure - The account can also be closed prematurely as your daughter completes 18 years of age provided she gets married before the withdrawal. As the maximum permissible age of the girl child is set as 10 years, the scheme effectively carries a minimum duration of 8 years i.e. 18 years of exit age – 10 years of entry age.

Partial Withdrawal - It is also allowed to withdraw 50% of the balance standing at the end of the preceding financial year, but only after your daughter attains the age of 18 years. So, effectively it has a complete lock-in period of at least 8 years, before which you cannot take out any money for any purposes.

Minimum/Maximum Investment - You need to deposit a minimum of Rs. 1,000 in a financial year to keep your account active. Failure to do so will make your account inactive and it could be revived only after paying a penalty of Rs. 50 along with the minimum amount required to be deposited for that year, which currently stands at Rs. 1,000.

Also, you can invest a maximum of up to Rs. 1,50,000 in a financial year. You can make your contribution to this account in as many number of times as you like.

How many accounts can be opened? - You can open only one account in the name of one girl child and a maximum of two accounts in the name of two different children. However, you can open three accounts if you are blessed with twin girls on the second occasion or if the first birth itself results into three girl children.

Nomination Facility - Nomination facility is not available in this scheme. In an unfortunate event of the death of the girl child, the account will be closed immediately and the balance will be paid to the guardian of the account holder.

Documents Required - Birth Certificate of the girl child, along with the identity proof and residence proof of the guardian, are the mandatory documents required to open an account under this scheme. You can approach any post office or authorised branches of some of the commercial banks to get this account opened.

Sukanya Samriddhi Yojana vs. Public Provident Fund (PPF) 

Budget 2015 has made this scheme quite attractive for the investors. If you’ve already exhausted your PPF deposit limit, want to save for your girl child’s marriage or higher education and have spare money to invest in this scheme, then this scheme provides you one more excellent avenue of safe investment with high returns. You can wait for the next financial year’s rate of interest to get announced anytime this month, if it remains higher than PPF, just go for it. 

2015-16 Year Interest decided by Govt of India - 9.2% for SSA Account.

Sukanya Samriddhi Yojana Account Calculating Maturity Value after 21 Years

Recently Central Government Introduced new scheme for Children., scheme name Sukanya Samriddhi Yojana has received a great initial response from the general public. As the scheme offers 9.1% tax-free rate of interest, investors are finding this scheme to be extremely attractive and want to invest in it as soon as possible. They also need hand holding to invest in this scheme. But, due to lack of required information with the post offices and authorized bank branches, people are finding it difficult to do so.

I have posted two articles about this scheme and both have received over hundred comments from the visitors. I have been getting many queries regarding the maturity value of this scheme. People want to know the value of their investment as the scheme gets matured after 21 years.

Though it is almost impossible to calculate a precise maturity value of this scheme as there are many variables on which its maturity value will depend, I have tried to make a couple of tables in which the maturity value has been calculated keeping those variables to be constant and yearly & monthly contribution to be the only variable.

Certain assumptions have been made for calculating these maturity values and those assumptions are:

1. Rate of Interest has been assumed to be 9.1% for all these 21 years.
2. Yearly contributions have been assumed to be made on April 1 every year i.e. the beginning of the financial year.
3. Monthly contributions have been assumed to be made on 1st day of every month.
4. Although it is not mandatory, a fixed amount of yearly/monthly contribution has been assumed.
5. It is also assumed that no withdrawal is made throughout these 21 years.

Here you have the tables:

Yearly Contribution Table

 Monthly Contribution Table

I hope these two tables help people in deciding how much amount they would like to contribute to this scheme in order to achieve their girl child’s marriage and/or higher education goals.

Before you go ahead and plan to get an account opened, I would like to again highlight the main features of this scheme:

Who can open this account? - Parents or a legal guardian of a girl child up to the age of 10 years, can open this account in the name of the girl child. Up to December 1, 2015, one year grace period has been provided to allow this account to get opened for a girl child who is born on or after December 2, 2003.

9.1% Tax-Free Rate of Interest - This scheme offers 9.1% rate of interest, which has also been exempted from tax in this year’s budget. But, this rate is not fixed at 9.1% for the whole tenure and is subject to a revision every financial year.

2015-2016 Year Govt of India decided  ROI 9.2% for SSA Account.

Scheme Matures in 21 years or on Girl’s Marriage, whichever is earlier - The scheme gets matured on completion of 21 years from the date of opening of the account or as the girl child gets married, whichever is earlier. Please note that the girl attaining the age of 21 years has no relevance to maturity of this scheme.

Deposit for 14 years only - You need to deposit a minimum of Rs. 1,000 and a maximum of Rs. 1,50,000 only for the first 14 years, after which you are not required to deposit any amount. Your account will keep earning the applicable interest rate for the remaining 7 years or till it gets matured on your daughter’s marriage.

Documents Required - You need birth certificate of the girl child, along with the identity proof and residence proof of the guardian, to open an account under this scheme. You can approach any post office or authorised branches of some of the commercial banks to get this account opened.

The following document required to open SSA Account.

1. Child Birth Certificate
2. 2 Photos for Child and Guardian
3. Address Proof : Passport , Aadharcard etc..
4. PAN Card