I want to buy an LIC plan for my young child to save for their college education. My agent has shown me the 20-year Money Back plan and the Jeevan Tarun plan. Which one is better designed for this specific goal?
For the specific goal of funding a child’s higher education, LIC’s Jeevan Tarun is a far better and more suitable plan than a generic LIC Money Back policy. Jeevan Tarun is a dedicated child plan with flexible payouts that are specifically timed to coincide with college years, making it a much more effective tool.
The Key Advantage of Jeevan Tarun: Timed Payouts for Education
I was discussing this with a financial planner for my own child’s future. He pointed out the main difference. With Jeevan Tarun , the survival benefit payouts are designed to start when the child turns 20 and continue annually until they are 24. This perfectly aligns with the typical years a child is in college and needs funds for fees. The regular Money Back plan , on the other hand, pays out at fixed 5, 10, and 15-year intervals, which may have no connection to when you actually need the money.
The Flexibility to Choose Your Payout Structure
My friend, who has a Jeevan Tarun policy for his daughter, showed me its most useful feature. When he bought the policy, he was given four different options for how he wanted to receive the annual payouts. He chose the option to receive 15% of the sum assured every year from age 20 to 24 to help cover her annual college fees. This ability to customize the payout structure is a major advantage that the standard Money Back plan does not have.
A Plan Designed Specifically for a Child’s Future
The financial planner also highlighted that Jeevan Tarun is a true “child plan” because of its optional riders. He strongly recommended adding the Premium Waiver Benefit rider. He explained that with this rider, if something unfortunate were to happen to the parent (the policyholder), all future premiums would be waived by LIC. However, the child would still receive all the planned money-back payouts and the maturity amount as originally intended. This ensures the child’s education fund is completely secure.
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