LIC CDA Endowment Vesting At 21 Plan

Features of LIC CDA Endowment Vesting At 21

The key features of the LIC CDA Endowment Plan No. 41 is as follows:

1. Premiums need not be paid if the child who is insured dies, or if the person who is making the payments towards the policy - parent or guardian - dies.
2. Medical Tests are not required if the deferment period - the period from the time a policy is taken to the time the child gains ownership of the policy - is 10 years or more.

Benefits of LIC CDA Endowment Vesting At 21

Monetary benefits that can be gained from buying an LIC CDA Endowment Vesting At 21 plan for your child are multifarious.

1. Maturity Benefit: The sum assured, plus all the bonuses declared up to policy maturity, will be given to the policyholder or nominee in a single payment.
2. Supplementary Benefits: Optional benefits can be added to your basic plan for extra security. You have to pay additional premium to avail these benefits.
3. Guaranteed Surrender Value: If your policy has been in force for 3 years or more, you can surrender the policy to the Corporation. On surrendering, you get a guaranteed amount which is known as Guaranteed Surrender Value. If the policy is surrendered before the deferred date, you get 90% of the premiums paid except the premium for the first year. If the policy is surrendered after the deferred date, the following terms apply:
   1. If the deferment period is less than 10 years, you get 90% of the premiums paid before the deferment date except for the first year, and 30% of the premiums paid after the deferred date.
   2. If the deferment period is 10 years or more, you get 90% of a cash option in addition to 30% of the premiums paid after the deferred date.
4. Special Surrender Value: The LIC may also pay a Special Surrender Value, equal to or more than the Guaranteed Surrender Value. This depends on the economic conditions and policy experience.
5. Death Benefit: The Sum Assured and vested bonuses are given in a single payment if the child on who is insured dies after the deferment period. If the life assured dies before the deferment period, a refund is made of all premiums paid until the time of death.
6. Tax Benefit: Any premium paid for a life insurance policy is exempt from tax under Section 80 C of the Income Tax Act, while the amount received on maturity is exempt under Section 10 (10D).

How It Works

The plan takes shape in has two stages: Stage One, the deferment period, covers the period from the commencement of the policy to the deferred date (when the child becomes the owner of the policy). Stage Two covers the period from the deferred date to the maturity date. The child's life insurance cover starts from the deferred date.

The deferred date under Plan No. 41 is the policy anniversary date that comes on or after the date on which the child turns 21 years.

Riders

Premium Waiver Benefit Rider and Accident Benefit Rider are applicable to this plan. In case of the Premium Waiver Benefit Rider, the parent or guardian can continue to receive the benefits of the scheme without paying the premiums for the policy under certain exigency conditions, such as disability, death and loss of income. The Accident Benefit Rider covers accidental death and total and permanent disability, and provides additional sum to the beneficiary in case of such incidents.

Both these riders can be availed by paying the charges or additional premium amount stipulated by the Corporation.

GST of 18% is applicable on life insurance effective from the 1st of July, 2017