LIC's New Children's Money Back Plan 732

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LIC’s New Children’s Money Back Plan 732 – Complete Guide (2026)

When it comes to planning a child’s future, Indian parents consistently look for financial products that offer security, guaranteed benefits, and long-term stability. One such traditional yet trusted option is the LIC New Children’s Money Back Plan 732, offered by the Life Insurance Corporation of India (LIC).

This plan is designed to help parents systematically build a financial corpus for their child’s education, marriage, or other important life milestones, while also providing life insurance coverage. In this article, we will explore the LIC New Children’s Money Back Plan 732 in detail, covering features, benefits, eligibility, policy structure, bonuses, tax advantages, and whether it is the right choice for you.

This guide is written in simple language for beginners and is suitable for anyone researching child insurance plans in India.

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What is LIC New Children’s Money Back Plan 732?

LIC’s New Children’s Money Back Plan 732 is a participating, non-linked, life insurance policy specially designed for children. It combines savings and protection, ensuring that funds are available at crucial stages of a child’s life.

Under this plan:

• A parent or guardian purchases the policy for a child.
• The policy provides periodic survival benefits during the policy term.
• On maturity, a lump sum amount is paid.
• In case of the policyholder’s death, the child’s future benefits remain protected through LIC’s Premium Waiver Benefit.

This plan is particularly popular among conservative investors who prefer guaranteed returns with low risk.

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Key Objectives of the Plan

The primary objectives of LIC New Children’s Money Back Plan 732 are:

1. To help parents financially prepare for a child’s education and marriage
2. To provide life insurance protection
3. To offer guaranteed money back payouts
4. To ensure continuity of the policy even in case of the proposer’s death

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Policy Structure at a Glance

Feature	Details
Policy Type	Participating, Non-Linked
Plan Category	Children’s Insurance
Sum Assured	Minimum ₹1,00,000
Premium Payment	Regular
Bonuses	Simple Reversionary + Final Additional Bonus
Risk Coverage	Available after deferment period

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Eligibility Criteria

Age at Entry

• Child’s Age: 0 to 12 years
• Proposer’s Age: Adult (Parent/Legal Guardian)

Policy Term

The policy term depends on the age of the child at entry. The maturity age is generally fixed, ensuring payouts align with key milestones like higher education.

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Survival Benefits Explained

One of the biggest advantages of this plan is its Money Back feature. The policy pays a portion of the Sum Assured at specific intervals, which can be used for education expenses.

Survival Benefit Schedule (Indicative)

• 20% of Sum Assured at a specified policy year
• 20% of Sum Assured at another milestone
• Remaining amount + bonuses at maturity

These payouts help parents manage increasing education costs without disturbing other investments.

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Maturity Benefits

At the end of the policy term, the policyholder receives:

• Remaining Sum Assured
• Simple Reversionary Bonuses
• Final Additional Bonus (if applicable)

This maturity amount can be used for:

• College or professional education
• Marriage expenses
• Starting a business or higher studies abroad

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Death Benefit and Premium Waiver Benefit

Death of the Child

If the child passes away during the policy term:

• LIC pays the Sum Assured immediately
• Policy terminates thereafter

Death of the Proposer (Parent)

This is where the plan offers a unique advantage.

• Future premiums are waived
• Policy continues without interruption
• Survival and maturity benefits are paid as planned

This ensures that the child’s financial future is not affected by the loss of the earning parent.

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Bonuses Under LIC Children’s Money Back Plan 732

Since this is a participating policy, it is eligible for bonuses declared by LIC.

Types of Bonuses

1. Simple Reversionary Bonus
• Declared annually
• Accumulates throughout the policy term
2. Final Additional Bonus
• Paid at maturity or death
• Depends on policy duration and Sum Assured

Bonuses increase the overall returns, although they are not guaranteed.

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Premium Payment Options

• Premiums are paid regularly throughout the policy term
• Premium amount depends on:
• Child’s age
• Sum Assured
• Policy term

Premiums can be paid yearly, half-yearly, quarterly, or monthly, subject to LIC rules.

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Grace Period

LIC provides a grace period for premium payment:

• 30 days for yearly/half-yearly/quarterly mode
• 15 days for monthly mode

If the premium is not paid within the grace period, the policy may lapse.

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Paid-Up Value and Policy Revival

Paid-Up Policy

If premiums have been paid for a minimum period and later discontinued, the policy may become paid-up with reduced benefits.

Revival

A lapsed policy can be revived within a specified period by:

• Paying pending premiums
• Submitting health declarations if required

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Loan Facility

After acquiring surrender value, the policy becomes eligible for loan facility. This can help in emergencies without surrendering the policy.

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Surrender Value

• Policy acquires surrender value after a minimum number of premiums are paid
• LIC pays Guaranteed Surrender Value or Special Surrender Value, whichever is higher

However, surrendering early is usually not recommended, as it reduces long-term benefits.

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Tax Benefits (As per Current Income Tax Laws)

Premium Paid

• Eligible for tax deduction under Section 80C

Maturity and Survival Benefits

• Generally tax-free under Section 10(10D), subject to conditions

Tax laws may change, so it is advisable to consult a tax advisor.

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Who Should Consider This Plan?

LIC New Children’s Money Back Plan 732 is suitable for:

• Parents seeking safe and stable returns
• Families with low to moderate risk appetite
• Those who prefer guaranteed payouts over market-linked returns
• Long-term planners focused on education and marriage expenses

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Who Should Avoid This Plan?

This plan may not be ideal for:

• Investors seeking high returns
• Those comfortable with market-linked instruments
• Short-term financial planners

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Comparison with Other Investment Options

Option	Risk	Returns	Suitability
LIC Children’s Plan	Low	Moderate	Conservative parents
Mutual Funds	High	High (Variable)	Aggressive investors
Fixed Deposits	Very Low	Low	Short-term savings
PPF	Low	Moderate	Long-term savings

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Important Things to Keep in Mind

• Returns are not very high, but they are stable
• Policy works best when held till maturity
• Bonuses depend on LIC’s performance
• Not a replacement for pure investment products

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Frequently Asked Questions (FAQs)

Is LIC New Children’s Money Back Plan 732 guaranteed?

The Sum Assured is guaranteed. Bonuses are subject to LIC’s declaration.

Can I buy this plan for a newborn?

Yes, the plan allows entry from birth.

Is this plan better than mutual funds?

It depends on risk appetite. Mutual funds may offer higher returns but involve risk.

Can I stop premiums midway?

Yes, but benefits may reduce unless the policy is revived.

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Final Verdict

LIC’s New Children’s Money Back Plan 732 is a traditional child insurance plan that prioritizes security, predictability, and disciplined savings. While it may not generate high returns, it offers peace of mind and guaranteed financial support during crucial stages of a child’s life.

For parents who value safety over aggressive growth, this plan can be a meaningful part of a long-term financial strategy.

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Disclaimer

This article is for educational and informational purposes only. Policy terms, benefits, and tax rules are subject to change. Always refer to official LIC brochures and consult a qualified financial advisor before making any investment decision.

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