Why Parents Are Choosing LIC Over FD or RD
Many Indian parents are now shifting from traditional Fixed Deposits (FDs) and Recurring Deposits (RDs) to LIC child plans to ensure their children’s future. LIC’s child-oriented schemes are designed to offer both financial protection and long-term savings in a single plan. These plans not only provide guaranteed maturity benefits but also ensure that your child’s education and future goals are protected even if something happens to the parent.
Key Features of the LIC Child Plan
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Guaranteed Returns: The plan ensures a fixed sum assured at maturity, helping parents plan for higher education or marriage.
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Life Insurance Protection: If the parent or policyholder passes away during the policy term, the premium is waived, and the policy continues for the child’s benefit.
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Flexible Term: Parents can choose the policy duration—usually between 13 to 25 years—based on their child’s age and future goals.
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Tax Benefits: Premiums qualify for deductions under Section 80C, and maturity amounts are generally tax-free under Section 10(10D).
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Bonus and Add-On Benefits: Many LIC plans include annual bonuses that further increase the maturity value.
FD and RD vs LIC Child Plan
While FD and RD offer safe and fixed returns, they lack flexibility and do not provide insurance coverage. On the other hand, LIC child plans combine protection, savings, and inflation-adjusted growth, making them ideal for long-term goals. The plan continues even in case of an unfortunate event, ensuring the child’s future is never compromised.
How to Choose the Right Plan
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Start Early: The earlier you start, the lower your premium and the greater your savings.
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Decide Your Goal: Choose a plan based on whether you are saving for education, marriage, or other major milestones.
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Check Policy Term and Premium Payment Period: Some plans allow you to stop paying premiums before the policy ends while still enjoying full benefits.
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Review Regularly: Make sure to assess your plan every few years and update it as per your family’s needs.
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Stay Consistent: Regular premium payment is essential to avoid policy lapse and ensure full benefits.
Who Should Invest
This plan is best for parents who want to build a secure financial foundation for their child without taking high risks. It is suitable for middle-class families looking for long-term growth, protection, and stability in one product.
