Hi Jago team,
I wanted to take some policy for my child and also looking for some investment in his name.One of my close friend has referred LIC’s Child Career Plan. I have also read many blogs for this policy, however still confused as returns from this policy looks attractive as per below table.
Child Career Plan-Plan- 184
Sum Assurred: 5,00,000/-
Premium Paying Term = 18 Years
Policy Term = 23 Years
Premium = 24725/-
The leaflet(given by my friend) shows that I will ge getting following amount for SA 5,00,000/=
18th year = 5,10,000/-
19th Year = 75000/-
20th Year = 75000/-
21th Year = 75000/-
22nd Year = 75000/-
23rd Year = 3,75000/-
Total premium paid = 4,45,050/= ( for 18 years, each premium 24725 = 4, 45,050)
Money return = 11,85,000/-
According to LIC website, it says as follows.
Survival Benefit:
On life assured surviving to the end of the specified durations an amount specified below is payable:
5 years before the date of expiry of policy term – 30% of the Sum Assured along with vested
Simple Reversionary Bonuses
4 years before the date of expiry of policy term – 15% of the Sum Assured
3 years before the date of expiry of policy term – 15% of the Sum Assured
2 years before the date of expiry of policy term – 15% of the Sum Assured
1 years before the date of expiry of policy term – 15% of the Sum Assured
On the date of expiry of policy term – 15% of the Sum Assured along with Final (Additional) Bonus, if any.
Reversionary & Interim Bonus for 2011 is as below for Child Career Plan.
11 to 15 yrs = 34/- per thousand
16 to 20 yrs = 38/-
21 yrs & above = 40/-
According to above table, my calculation shows that around 10.5% return which is greater than PPF(8.6%)(it may not be correct as well). I would like to understand how bonus is calculated and wanted to know if this LIC really yeilds more than PPF?.
I have spread my investments in few LIC policies, PPF, Mutual fund and directly in shares. I am not interested in term plan as my present company covers at its best and I am happy about it. However for future planning(with less risk) I wanted a good investment
Sorry for long question.
Best regards