Overview

LIC offers several child insurance plans designed to help parents build a corpus for milestones such as higher education, marriage, and early career goals. These are traditional participating/non-participating savings plans that combine life insurance with guaranteed benefits and, where applicable, bonus-based returns.

Popular LIC Child Plans

  • LIC Jeevan Tarun: Flexible child plan with four payout options, premiums payable until the child turns 20, and maturity at 25 years.
  • LIC New Children's Money Back Plan: Pays 20% of the basic sum assured at ages 18, 20, and 22, with the remaining maturity benefit and bonuses payable at 25 years.
  • LIC Amritbaal: Offers guaranteed additions, flexible premium payment options, and a maturity age selectable between 18 and 25 years.

Key features include a premium waiver benefit rider, tax benefits, and a policy loan. The right LIC child plan depends on your child's age, financial goals, premium budget, and preferred payout structure.

Planning for your child's future starts with choosing the right financial tool. LIC offers multiple child insurance plans, but each follows a different payout structure, premium schedule, and maturity benefit. Understanding these differences can help you make a more informed decision.

In the next few minutes, this guide explains LIC child plans, compares the available options, and helps you choose the right plan for your child's future goals.

Confused about whether a child plan or term insurance will fulfill your future goals? Book a free call or chat on WhatsApp with a Ditto advisor, and let us help you out.   

What Is a LIC Child Plan?

Child plans by the Life Insurance Corporation of India (LIC) are traditional savings-cum-insurance plans designed to help parents build a financial corpus for milestones such as higher education, marriage, or career aspirations. 

Depending on the plan chosen, they combine life cover, guaranteed benefits, participating bonuses (where applicable), and structured payouts.

LIC Jeevan Tarun vs. New Children's Money Back Plan: Which Is Better?

The better LIC child plan depends on how and when you want the money to be available. If your priority is flexibility, LIC Jeevan Tarun offers four survival benefit options, allowing you to choose between larger maturity proceeds or regular payouts between ages 20 and 24. This makes it suitable for parents with different education funding needs.

The LIC New Children's Money Back Plan, on the other hand, follows a fixed payout structure. It pays 20% of the basic sum assured at ages 18, 20, and 22, with the remaining 40% plus applicable bonuses payable at age 25. Parents who prefer predetermined milestone payouts may find this structure easier to plan around.

CTA

Eligibility, Benefits, and Maturity Returns of LIC Child Plans

Eligibility Criteria

FeatureNew Children's Money Back PlanLIC Jeevan TarunLIC Amritbaal
Child's Entry Age0 to 12 years30 days to 12 years30 days to 13 years
Maturity AgeFixed maturity when the child turns 25 yearsFixed maturity at 25 yearsChoose a maturity age between 18 and 25 years
Premium Paying Term (PPT)Regular premiums payable throughout the policy term20 years minus the child's entry ageAvailable with single premium or limited-pay (5, 6, or 7 years)
Policy Term25 years minus age at entry25 years minus the child's entry age 5 years to 25 years (depends on PPT)
Premium Waiver Benefit Rider Available only if the life assured is a minor at the time the rider is added to the policyAvailable at an additional costAvailable only with limited premium options (Option I & Option II)

Benefits and Maturity Returns of New Children's Money Back Plan

    • Death Benefit: LIC pays the higher of the basic sum assured or 7 times the annualized premium, along with applicable bonuses, if declared. The total death benefit is guaranteed to be at least 105% of the total premiums paid up to the date of death.
    • Maturity Benefit: If the child survives until the end of the policy term and the policy remains in force, LIC pays 40% of the basic sum assured as the maturity benefit, along with any vested simple reversionary bonuses and final additional bonus, if declared.
    • Maturity Returns: Under the 4% benefit illustration in the policy brochure, the estimated IRR is approximately 1%–2% per annum, while the 8% illustration suggests approximately 4%–5% per annum. Since bonuses are not guaranteed, actual returns may vary. 

Benefits and Maturity Returns of LIC Jeevan Tarun

    • Death Benefit: If the child passes away during the policy term after risk commencement, LIC pays the higher of 125% of the basic sum assured or 7 times the annualized premium, along with applicable bonuses, if declared. The payout is also guaranteed to be at least 105% of the total premiums paid.
    • Survival Benefit: LIC Jeevan Tarun provides annual survival benefits from the child's 20th birthday. Based on the option chosen at purchase, the policy pays 0%, 5%, 10%, or 15% of the basic sum assured each year for five consecutive years, with the remaining benefit payable at maturity along with applicable bonuses.
    • Maturity Benefit: If the child survives until age 25 and the policy remains in force, LIC pays the remaining basic sum assured, along with any vested simple reversionary bonuses and final additional bonus, if declared. The final maturity amount depends on the survival benefit option selected when the policy was purchased.
    • Maturity Returns: Based on the policy brochure illustration, the guaranteed benefits alone generate a modest IRR of around 0% to 1% per year, as the guaranteed payout is only slightly higher than the total premiums paid. If LIC declares bonuses (which are not guaranteed), the overall return could increase to approximately 4.3%-4.7% per annum.

Benefits and Maturity Returns of LIC Amritbaal

    • Death Benefit: Under limited premium, Option I pays the higher of 7 times the annualized premium or the basic sum assured, while Option II pays the higher of 10 times the annualized premium or the basic sum assured. Under the single premium option, Option III pays the higher of 1.25 times the single premium or the basic sum assured, whereas Option IV provides a death benefit equal to 10 times the single premium.
    • Premium Discounts & Online Purchase Rebate: A higher basic sum assured generally results in a larger benefit, subject to your age and selected maturity age. Additionally, online purchases receive a 10% premium rebate on limited premium policies and a 2% rebate on single premium policies, helping lower the overall policy cost.
    • Maturity Returns: LIC's benefit illustration presented in the plan brochure indicates that a single premium of ₹3,89,225 could grow to approximately ₹13 lakh after 20 years, implying an estimated Internal Rate of Return (IRR) of around 6.2% per annum before tax. 

Note: For LIC child plans purchased while the child is a minor, the policy automatically vests in the child upon attaining 18 years of age. From then onwards, the child becomes the legal policyholder and can surrender the policy, take a policy loan (if eligible), or exercise settlement options independently.

LIC: Performance Metrics

MetricAverage (FY 2024-26)Industry Average
Claim Settlement Ratio (CSR)98.16%99.00% (mean)
Amount Settlement Ratio (Average FY 2023-25)95.48%94.83% (mean)
Annual Business₹2,36,689.82 crore ₹3,778.58 crore (median)
Volume of Complaints (Per 10,000 Claims)4.3413.10 (median)
Solvency Ratio2.15x2.00x (median)
Annual Death Claims Paid₹19,224.97 crore ₹237.24 crore (median) 

Note: The figures in the above table are derived from LIC public disclosures and IRDAI annual reports. To explore these insurer metrics in greater detail, refer to Ditto Data Lab.

LIC Child Plan vs Term Insurance Plus Mutual Funds: What's Better?

FactorLIC Child PlansTerm Insurance + Mutual Funds
Primary PurposeBuild a corpus for the child's future through insurance-linked savingsProtect family income while creating long-term wealth
Return CertaintyGuaranteed benefits with possible bonuses in participating plansReturns depend on market performance with no guarantees
Inflation ProtectionLimited ability to beat long-term inflationBetter long-term inflation-beating potential
LiquidityLimited and surrendering early may reduce benefitsHigher, as mutual funds can generally be redeemed anytime
FlexibilityFixed premium, payout, and policy structureEasy to increase, reduce, or switch investments
Market RiskLow or no market riskSubject to market fluctuations
TransparencyReturns depend on policy terms and bonus declarationsFund performance and costs are publicly disclosed

Why Choose Ditto for Life Insurance?

At Ditto, we’ve assisted over 8,00,000 customers with choosing the right insurance policy. Why customers like Aaron below love us:

LIC Child Plan
    • No-Spam & No Salesmen
    • Rated 4.9/5 on Google Reviews by 30,000+ happy customers
    • Backed by Zerodha
    • Dedicated Claim Support Team
    • 100% Free Consultation

You can book a FREE consultation. Slots are running out, so make sure you book a call or chat on WhatsApp now!

Conclusion

LIC's child insurance plans can help create a structured corpus for your child's future while providing insurance protection. However, they should be viewed as one of several available options rather than the default choice for every family. Compare their guaranteed benefits, flexibility, and expected returns with alternatives before making a decision.

A sensible financial plan starts with securing one of the best term insurance plans for the earning parent/parents and choosing among the best health insurance plans for the entire family. 

Once these essentials are in place, parents can evaluate LIC child plans alongside options such as the Public Provident Fund (current interest rate is 7.1%), Sukanya Samriddhi Yojana (current rate is 8.2%) for a girl child, and mutual funds. 

Frequently Asked Questions

What is the best LIC child plan to buy in 2026?

There is no single best LIC child plan for every family. LIC Jeevan Tarun suits parents seeking flexible payouts, New Children's Money Back Plan offers fixed milestone benefits, while LIC Amritbaal focuses on guaranteed additions and a lump-sum corpus. The right choice depends on your child's age, financial goals, and preferred payout structure. A LIC child plan for 10 years may refer to either a 10-year policy term or 10 years of premium payments. Among LIC's child plans, LIC Amritbaal offers a minimum 10-year policy term under its limited-premium payment options.

What is the difference between LIC Jeevan Tarun and the New Children's Money Back Plan?

The key difference lies in the payout structure. Jeevan Tarun offers four survival benefit options, allowing parents to choose between higher maturity proceeds or annual payouts from ages 20 to 24. New Children's Money Back Plan follows a fixed schedule, paying 20% of the basic sum assured at ages 18, 20, and 22, with the remaining benefit payable at age 25. You can use a third-party LIC child plan calculator for rough estimates of the premiums. 

How much return do LIC child plans give at maturity?

Returns vary by plan and depend on guaranteed benefits and bonus declarations. Based on the policy brochures, which can be downloaded as LIC child plan PDF, the guaranteed component generally offers modest returns, while participating plans such as Jeevan Tarun and New Children's Money Back Plan may deliver higher overall returns if LIC declares bonuses. Since bonuses are not guaranteed, actual maturity values can differ from illustrations.

Does a LIC child plan continue if the parent dies during the policy term?

The policy does not automatically terminate if the parent (proposer) dies. If the Premium Waiver Benefit Rider has been added and the claim is accepted, all eligible future premiums are waived while the policy continues. Without this rider, premiums must continue to be paid to keep the policy in force, or else the policy may lapse or become paid-up, subject to its terms and conditions.

What is LIC's claim settlement ratio compared to private insurers?

LIC has consistently reported good claim settlement ratios among Indian life insurers, with a three-year average (FY 2024-26) CSR of 98.16%. However, several leading private insurers, such as HDFC Life and Axis Max Life, have reported claim settlement ratios above 99% in recent years. Instead of relying only on this metric, compare policy features, exclusions, service quality, and suitability before choosing a plan.

Is a LIC child plan better than a term plan plus mutual fund SIP for education planning?

For many families, term insurance for the earning parent, combined with a mutual fund SIP, offers higher life cover, greater flexibility, and stronger long-term wealth-creation potential. LIC child plans provide disciplined savings and lower volatility but generally offer lower expected returns than diversified equity investments over long investment horizons.

What is the eligibility age range for LIC child plans?

The eligibility depends on the plan. LIC Jeevan Tarun and New Children's Money Back Plan are available for children aged 0 to 12 years, while LIC Amritbaal accepts entry from 30 days to 13 years. Parents should also check the applicable premium paying terms, maturity age, and rider eligibility before purchasing. If you are looking for a LIC child plan for 5 years, LIC Amritbaal offers a 5-year premium paying term.

Do LIC child plans offer tax benefits?

Yes. LIC child plans offer tax benefits if they satisfy the applicable provisions of the Income-tax Act. Premiums paid qualify for a deduction under Section 123 (previously Section 80C), subject to the overall ₹1.5 lakh annual limit, under the old regime and the prescribed premium-to-sum-assured conditions. The maturity proceeds may be tax-exempt under Section 11 (previously Section 10(10D)) if the policy meets the applicable tax rules. For traditional (non-ULIP) policies issued on or after April 1, 2023, the exemption generally does not apply if the aggregate annual premium across such policies exceeds ₹5 lakh.

Does a LIC child plan pay a death benefit if the parent dies?

Not by default. In all three LIC child plans, the child is the life assured, while the parent or grandparent is only the proposer. The death benefit is payable only if the child passes away. If the parent dies, the policy continues only if the optional Premium Waiver Benefit Rider was purchased. Also, if the child enters the plan before age 8, full risk cover begins after two years or on the policy anniversary following the child's 8th birthday, whichever is earlier. Until then, LIC generally refunds the premiums paid (without interest) if the child dies.

Last updated on: