Planning for your child's education is one of the most important financial goals for any parent. LIC offers dedicated child plans that pay guaranteed survival benefits at key education milestones — 12th standard, graduation, post-graduation. Here's a complete guide to choosing the best LIC plan for your child in 2026.
How Much Does Higher Education Cost in India?
Education costs in India have been rising at 10-12% per year — much faster than general inflation. Here's an estimate for a child born in 2026:
| Education Stage | Age | Estimated Cost (₹) |
|---|---|---|
| Schooling (12 years, private) | 4-15 | 15-25 lakh |
| Engineering/MBBS (4 years) | 18-22 | 20-50 lakh |
| MBA / Masters (2 years) | 22-24 | 15-30 lakh |
| Foreign education (1 year) | 21+ | 30-80 lakh |
So a parent should aim to build a ₹30-50 lakh corpus for the child's higher education, starting as early as possible.
Top LIC Child Education Plans in 2026
1. LIC New Children Money Back Plan (732)
This is the most popular dedicated child plan from LIC. Key features:
- Entry age: 0 to 12 years
- Policy term: 25 years (locks the maturity at age 25 for a child bought at birth)
- Survival benefits: 20% of SA at age 18, 20% at age 20, 20% at age 22
- Maturity at 25: 40% of SA + bonus + FAB
- Premium waiver: If parent (proposer) dies, future premiums are waived and policy continues with full benefits
Indicative annual premium: For a 1-year-old child, ₹5 lakh SA, 25-year term, healthy parent: ~₹19,500/year (excluding GST).
2. LIC Jeevan Tarun (734)
Another child-specific plan from LIC. Designed for parents who want flexible survival benefits:
- Entry age: 0 to 12 years
- Policy term: 18 to 25 years
- Survival benefits: Flexible — choose 5%, 10%, 15% or 20% of SA every 5 years
- Maturity: 100% of SA + bonus + FAB at end of term
- Premium waiver: On death of parent, future premiums waived
Indicative annual premium: For a 5-year-old, ₹5 lakh SA, 20-year term: ~₹22,000/year.
3. LIC Jeevan Umang 745 (as child plan)
Though not specifically a child plan, Jeevan Umang works well for long-term child wealth creation:
- Entry age: 90 days to 55 years
- Annual survival benefit: 8% of SA every year after PPT, up to age 100
- Limited premium: Pay for 15/20/25 years, get life cover + benefits till age 100
- Best for: Parents who want lifelong cover for the child, not just education
Indicative annual premium: For a 1-year-old child, ₹5 lakh SA, 25-year PPT: ~₹13,500/year.
4. LIC New Endowment Plan (714)
The classic endowment plan also works as a basic child plan, with the benefit of simplicity and high bonus rate:
- Maturity: Lump sum at end of term
- No survival benefits during the term (only maturity payout)
- Best for: Parents who don't need stage-based payouts, just want a lump sum at age 18-25
Indicative annual premium: For a 1-year-old child, ₹5 lakh SA, 25-year term: ~₹16,000/year.
Side-by-Side Comparison
| Feature | NCMB 732 | Jeevan Tarun 734 | Jeevan Umang 745 |
|---|---|---|---|
| Payout type | Stage-based | Flexible stage | Annual income |
| Payouts match | 18, 20, 22, 25 | Every 5 yrs | After PPT, yearly |
| Premium waiver | Yes | Yes | Yes (extra rider) |
| Annual premium (~₹5L SA) | ₹19,500 | ₹22,000 | ₹13,500 |
| Best for | Standard education milestones | Flexible payouts | Long-term wealth |
Tax Benefits on LIC Child Plans
Premiums paid for LIC child plans qualify for tax deduction under Section 80C (up to ₹1,50,000 per year, included in overall 80C limit). The parent (proposer) can claim the deduction even though the child is the life assured.
Maturity proceeds are completely tax-free under Section 10(10D), provided the premium is less than 10% of sum assured (15% for policies issued after 1 April 2023).
Premium Waiver Benefit: A Critical Feature
All LIC child plans come with a Premium Waiver Rider. If the parent (proposer) dies during the policy term, all future premiums are waived, but the policy continues with full maturity and survival benefits for the child. This ensures the child's education is never compromised, even in worst-case scenarios.
This is one of the strongest reasons to choose a dedicated LIC child plan over a simple mutual fund SIP for education.
Which LIC Child Plan Should You Buy?
- For 12th + Engineering + MBA milestones: LIC New Children Money Back (732)
- For flexible education needs: LIC Jeevan Tarun (734)
- For long-term wealth + lifelong cover: LIC Jeevan Umang (745)
- For simple lump sum at age 18-21: LIC New Endowment (714) + SIP in mutual funds
How to Calculate Premium for Your Child
Use our free LIC child plan calculators:
- LIC Premium Calculator — for endowment and money back plans
- LIC Maturity Calculator — to project maturity value with bonus
- SIP Calculator — to compare LIC vs mutual fund SIP for child
Frequently Asked Questions
1. Can I buy an LIC policy for my newborn?
Yes, most LIC child plans accept children from age 0 (90 days for some). The premium is locked at a low rate and stays constant throughout the policy term.
2. Who is the life assured in a child plan?
The child is the life assured. The parent/guardian is the proposer and pays premiums. On the child's death during the term, the parent receives the sum assured.
3. What happens if parent dies before child turns 18?
All LIC child plans include a premium waiver benefit. Future premiums are waived and the policy continues with full benefits for the child. The child remains fully covered for education.
4. Can I take a loan on LIC child plan?
Yes, after paying premiums for 3 full years, you can take a loan up to 90% of the surrender value. Useful for emergency funding.
5. Is LIC child plan better than mutual fund SIP?
Both have their place. LIC gives guaranteed insurance + tax benefits, but lower returns (~4-5% IRR). Mutual funds give market-linked returns (~10-12% long-term CAGR) but no insurance. A balanced approach: take a small LIC child plan + larger SIP in equity mutual funds.
6. What is the maximum sum assured for LIC child plan?
No upper limit, subject to underwriting. Most parents opt for ₹5 lakh to ₹25 lakh sum assured based on their target education corpus.
7. Can grandparents buy LIC policy for grandchild?
Yes, any adult can be the proposer. The relationship doesn't have to be parent-child — grandparents, aunts, uncles can all be proposers for LIC child plans.
8. Is LIC child plan maturity amount tax-free?
Yes, under Section 10(10D), the entire maturity amount (sum assured + bonus + FAB) is exempt from income tax in the hands of the child.