Planning for your child’s future in 2026 is no longer optional – it is urgent. Engineering and medical colleges now charge anywhere between ₹20 lakh and ₹60 lakh for a full course, and overseas education can easily cross ₹80 lakh to ₹1 crore when you factor in living expenses. Wedding costs, depending on your city and community, typically fall between ₹15 lakh and ₹40 lakh. What makes this more alarming is that education inflation in India currently runs at 10 to 12 percent annually, nearly double the general consumer price inflation. A course that costs ₹10 lakh today will cost approximately ₹26 lakh in ten years and close to ₹67 lakh in twenty years.
Against this backdrop, Life Insurance Corporation of India continues to offer two dedicated child plans that have stood the test of time: LIC’s New Children’s Money Back Plan (Plan No. 732) and LIC’s Jeevan Tarun (Plan No. 734). Both are participating, non-linked, savings-cum-protection plans approved by the Insurance Regulatory and Development Authority of India (IRDAI) and available as of April 2026 through licensed LIC agents, corporate agents, insurance brokers, and insurance marketing firms. Neither plan is available for direct online purchase on the LIC portal.
This guide is written for parents, grandparents, and guardians who want to understand these plans in full detail before committing. If at any point you want personalised premium quotes or a free consultation, visit lifeinsuranceadvisor.in and our advisors will help you within 24 hours, no pressure, no spam.
Why Traditional LIC Child Plans Still Make Sense in 2026
Before we discuss the plans individually, it helps to understand why lakhs of Indian families continue choosing traditional child plans despite the availability of market-linked options like ULIPs and mutual funds.
The core appeal is this: traditional participating plans from LIC offer guaranteed payouts at fixed intervals, bonuses based on LIC’s annual performance, and a Premium Waiver Benefit rider that keeps the policy alive even if the proposer, typically the parent, passes away. No mutual fund or ULIP can replicate this combination.
Here is what makes them attractive from a financial planning perspective:
Guaranteed survival benefits and maturity amounts are declared upfront and cannot be reduced regardless of market conditions. Simple Reversionary Bonuses and Final Additional Bonuses declared by LIC year after year enhance the final corpus without any additional outflow from your pocket. The Premium Waiver Benefit rider ensures that if the parent dies during the policy term, all future premiums are waived by LIC. The child continues to receive every benefit as if premiums were being paid. This is arguably the most underrated feature in any child financial plan.
Premiums paid under both plans qualify for deduction under Section 80C of the Income Tax Act, up to ₹1.5 lakh per financial year. Maturity proceeds, survival benefits, and death benefits are generally exempt under Section 10(10D), subject to the condition that the annual premium does not exceed 10 percent of the basic sum assured. For policies where annual premium exceeds ₹2.5 lakh (issued after February 1, 2021), the maturity proceeds may attract taxation, so consult a tax advisor if your premium outflow is high.
Both plans vest in the child’s name at age 18, giving the young adult full ownership of the policy and its benefits.
LIC’s New Children’s Money Back Plan – Plan No. 732
What Kind of Plan Is This?
Plan 732 is a money-back plan, which means it pays out a portion of the sum assured at regular intervals rather than waiting until maturity. This structure is especially useful for education planning because it aligns payouts with real milestone expenses, school leaving, college admission, graduation, and post-graduation or marriage.
Eligibility at a Glance
The child must be between 0 and 12 years of age at the time of entry. Newborns from 90 days old are also eligible. The policy matures when the child turns 25, which is fixed for all policyholders. The premium paying term equals the policy term, which is 25 minus the child’s entry age. If you enroll your child at age 5, both the policy term and the premium paying term will be 20 years.
The minimum basic sum assured is ₹2,00,000. There is no ceiling on the maximum sum assured, which means you can take coverage of ₹10 lakh, ₹20 lakh, ₹50 lakh, or higher depending on your financial goals and premium capacity. Sum assured is available in multiples of ₹5,000 or ₹10,000 depending on the slab. Premium payment modes include yearly, half-yearly, quarterly, and monthly via NACH.
A loan facility becomes available after completing two full years of premium payment.
How the Payout Works
This is where Plan 732 delivers its core value. The plan pays 20 percent of the basic sum assured as a survival benefit at each of the following three ages: 18, 20, and 22. At maturity, when the child turns 25, the plan pays 40 percent of the basic sum assured along with all accumulated Simple Reversionary Bonuses and a Final Additional Bonus if declared by LIC.
In total, you receive 100 percent of the basic sum assured in cash payouts across the four events, plus bonuses that can historically add 30 to 50 percent to the final maturity value depending on LIC’s performance over the policy term.
Let us make this concrete. If you take a sum assured of ₹10,00,000 for a child aged 5:
At age 18, your child receives ₹2,00,000, useful for admission fees, entrance coaching, or first-year college costs. At age 20, another ₹2,00,000 arrives, useful for second or third year expenses or a study abroad application. At age 22, a third ₹2,00,000, useful for post-graduation or a career launch. At age 25, the final payout of ₹4,00,000 plus accumulated bonuses arrives, the most substantial amount, ideal for a wedding or further studies or a property down payment.
Death Benefit
If the child passes away during the policy term, the nominee receives the higher of 10 times the annualized premium or the absolute sum assured on death, plus all vested bonuses. Critically, survival benefits already paid are not recovered, the full death benefit is paid independently of any prior payouts.
Premium Waiver Benefit Rider
This optional rider must be added at inception and is strongly recommended. If the proposer (parent) dies during the policy term, LIC waives all future premiums. The policy continues in full force and the child receives every payout exactly as planned. The eligibility condition is that the proposer’s age at entry plus the premium paying term should not exceed 70 years.
Approximate Annual Premiums for Plan 732
These are indicative figures excluding GST and applicable taxes. Actual premiums depend on the child’s age, sum assured slab, and medical underwriting.
For a sum assured of ₹2,00,000: Entry at age 0 costs roughly ₹9,000–9,100 per year. Entry at age 5 costs roughly ₹11,000–12,000. Entry at age 10 costs roughly ₹16,000–19,000. Entry at age 12 costs roughly ₹22,000–24,000.
For a sum assured of ₹10,00,000: Entry at age 0 costs roughly ₹44,000–46,000. Entry at age 5 costs roughly ₹54,000–58,000. Entry at age 8 costs roughly ₹70,000–74,000. Entry at age 12 costs roughly ₹1,10,000–1,20,000.
Premiums increase as entry age rises because the policy term gets shorter, requiring higher annual contributions to arrive at the same sum assured.
Who Should Choose Plan 732?
Plan 732 is best suited for parents who want large, defined lump sums at the most critical early education stages, college admission at 18, mid-course support at 20, and post-graduation at 22, followed by a final corpus at 25 for marriage or settlement. If your child’s biggest financial needs are concentrated between ages 18 and 22, this plan’s payout timing fits naturally.
LIC’s Jeevan Tarun – Plan No. 734
What Kind of Plan Is This?
Jeevan Tarun is a limited premium payment child plan with a distinctive feature: it offers four different payout options at the time of policy inception, allowing you to customise the balance between regular annual income during college years and a larger lump sum at maturity. The premium paying term is also shorter than Plan 732, which means you stop paying premiums earlier while the policy continues.
Eligibility at a Glance
Entry age for the child ranges from 30 days to 12 years. Like Plan 732, the policy matures when the child reaches age 25. The policy term is 25 minus the entry age. However, the premium paying term is shorter: it is 20 minus the entry age. If your child is 6 years old at entry, the premium paying term is only 14 years while the policy term is 19 years. This means premiums stop at the child’s age of 20, but benefits continue until age 25.
The minimum basic sum assured is ₹2,00,000. There is no upper limit. A loan facility is available after three years of premium payment.
The Four Payout Options
This is Jeevan Tarun’s unique differentiator. At policy inception, you choose one of four options that determines how the sum assured is distributed between annual college-years income (ages 20 to 24) and a final lump sum at age 25. You cannot change this option later.
Option 1 provides no survival benefits during the college years. The entire basic sum assured plus bonuses is paid at maturity when the child turns 25. This is the highest maturity payout option and suits parents building a single large corpus for marriage or settlement.
Option 2 pays 5 percent of the basic sum assured each year from age 20 to 24, a total of 25 percent in five annual payments, and 75 percent of the basic sum assured plus bonuses at maturity.
Option 3 pays 10 percent of the basic sum assured each year from age 20 to 24, a total of 50 percent across five payments, and 50 percent of the basic sum assured plus bonuses at maturity. This is the most commonly chosen option as it balances regular income during graduation and a meaningful corpus at 25.
Option 4 pays 15 percent of the basic sum assured each year from age 20 to 24, 75 percent spread over five payments, and 25 percent plus bonuses at maturity. This maximises annual income during the college years and is ideal for families expecting significant year-on-year education expenses.
All four options include accumulated Simple Reversionary Bonuses and the Final Additional Bonus in the maturity or survival payouts.
A Practical Illustration
Consider Ms. Mehta who enrolls her son Rohan at age 6 with a basic sum assured of ₹5,00,000 under Option 3.
The policy term is 19 years. The premium paying term is 14 years. Approximate annual premium is ₹29,000 to ₹32,000. Total premium outflow is approximately ₹4,20,000 to ₹4,50,000.
Rohan receives ₹50,000 (10 percent of ₹5,00,000) at ages 20, 21, 22, 23, and 24, a total of ₹2,50,000 over five years to fund his graduation and early career. At age 25, he receives ₹2,50,000 (50 percent) plus all accumulated bonuses and the Final Additional Bonus. The total guaranteed return is ₹5,00,000, and bonuses from LIC’s performance over 19 years can add ₹1.5 lakh to ₹2.5 lakh or more.
Death Benefit
If the child passes away before risk commencement under the policy (typically before a certain defined age), the nominee receives a refund of premiums paid excluding taxes. After risk commencement, the death benefit is the higher of 7 times the annualized premium or 125 percent of the basic sum assured, plus all vested bonuses.
Premium Waiver Benefit Rider
Available as an optional rider, as with Plan 732. Highly recommended for all proposers. If the parent passes away during the premium paying term, LIC waives all remaining premiums and the policy continues until maturity delivering all planned benefits to the child.
Who Should Choose Plan 734?
Jeevan Tarun is the better fit for parents who want a steady annual income stream during the five most expensive college years rather than concentrated lump sums. The shorter premium paying term is also an advantage for parents who prefer to complete their premium obligations by the time the child is 20, freeing up cash flow just when education costs begin to rise. The flexibility of four options makes this plan adaptable to a wide range of financial goals.
Plan 732 vs Plan 734 – Side-by-Side Comparison
Both plans share the same entry age range of 0 to 12 years and both mature at age 25. However, their payout structures, premium paying terms, and flexibility differ meaningfully.
Plan 732 pays survival benefits at ages 18, 20, and 22, earlier milestones that suit parents funding school-leaving and early college expenses. Plan 734 pays survival benefits annually from ages 20 to 24, which suits families managing ongoing undergraduate and postgraduate expenses. Plan 732 has a fixed payout structure with no options to customise. Plan 734 offers four options, giving parents meaningful control over the income-versus-lump-sum balance.
Plan 732 requires premiums throughout the full policy term. Plan 734 allows you to stop premium payments earlier, at 20 minus the child’s entry age, providing relief during the years when education costs are highest. Both plans have the same minimum sum assured of ₹2,00,000, both offer the Premium Waiver Benefit rider, and both are offline products requiring purchase through a licensed intermediary.
If you are unsure which plan suits your child’s age, education timeline, and budget, visit lifeinsuranceadvisor.in and share your details. Our IRDAI-licensed advisors will run the numbers for you and give you a straight answer.
The Premium Waiver Benefit Rider – Why It Is Non-Negotiable
If there is one feature that separates a well-structured child plan from a mediocre one, it is the Premium Waiver Benefit rider. This rider costs a modest additional premium but delivers an invaluable protection: if the proposer, typically the earning parent, passes away during the policy term, LIC takes over all future premium payments. The policy stays alive. The child still receives every survival benefit on schedule. The maturity benefit arrives at age 25 as planned.
Without this rider, a parent’s untimely death would force the family to either keep paying premiums, difficult when the primary earner is gone, or surrender the policy at a loss. With this rider, the child’s financial future remains secured regardless of what happens to the parent.
For both Plan 732 and Plan 734, always add the PWB rider at inception. The eligibility condition for proposers is that age at entry plus premium paying term must not exceed 70 years.
Should You Consider Term Insurance Alongside a Child Plan?
Here is an honest assessment that every parent deserves to read. In both Plan 732 and Plan 734, the life assured is the child, not the parent. This means the plan insures the child’s life, but the most significant financial risk to a child’s future is the loss of the parent’s income. If the earning parent dies, the family faces an immediate financial crisis that a child plan’s death benefit, typically ₹5 to ₹10 lakh, cannot adequately address.
This is why many financial advisors recommend a complementary approach: buy a pure term insurance plan on the parent’s life alongside the child plan. A term plan costing ₹12,000 to ₹20,000 per year can provide ₹1 crore to ₹2 crore in cover on the parent’s life. If the worst happens, this sum is paid immediately to the family, enough to fund education, clear debts, and sustain the household for years.
The Premium Waiver Benefit rider addresses the policy continuation problem. A standalone term plan addresses the income replacement problem. Together, they form a complete financial shield around your child’s future.
If you want help comparing LIC term insurance plans and calculating the right cover for your income and liabilities, visit lifeinsuranceadvisor.in. Our advisors will help you identify the right term plan based on your age, income, and existing commitments, completely free of charge.
Tax Benefits Under Current Rules
Premiums paid toward both plans qualify for deduction under Section 80C of the Income Tax Act, up to the overall limit of ₹1.5 lakh per financial year. This applies whether the proposer pays premiums for their own child or, in applicable cases, a grandchild.
Maturity benefits, survival benefits, and death claims are tax-exempt under Section 10(10D), provided the annual premium does not exceed 10 percent of the basic sum assured. For plans issued after February 1, 2021, maturity proceeds become taxable if the annual premium exceeds ₹2.5 lakh. If your premium outflow is in this range, consult a chartered accountant or tax advisor before purchasing.
Bonuses form part of the maturity benefit and are included in the Section 10(10D) exemption.
IRDAI Compliance and Consumer Protections
Both LIC Plan 732 and Plan 734 are compliant with IRDAI guidelines for traditional non-linked life insurance products. As a policyholder, you are entitled to the following consumer protections under current IRDAI regulations:
A free look period of 30 days from the date of receipt of the policy document allows you to review the terms and return the policy for a refund if you are unsatisfied. All deductions such as proportionate risk premium and stamp duty apply during the refund calculation.
A grace period of 30 days applies for yearly, half-yearly, and quarterly premium modes. For monthly mode, the grace period is 15 days. If the policy lapses, it can be revived within 5 years from the date of first unpaid premium by paying all outstanding premiums with applicable interest, subject to LIC’s underwriting at the time of revival.
After paying premiums for at least 2 to 3 years, the policy acquires a paid-up value and a surrender value. If you stop paying premiums, the policy continues as a reduced paid-up policy with proportionate benefits rather than lapsing immediately.
The loan facility, available after 2 years for Plan 732 and 3 years for Plan 734, allows borrowing up to a certain percentage of the surrender value, currently at an interest rate of approximately 9 percent per annum, subject to revision.
Grievances can be raised with LIC’s branch office, divisional office, or through the IRDAI’s Bima Bharosa portal. Unresolved complaints can be escalated to the Insurance Ombudsman in your region.
Smart Planning Tips for Parents in 2026
Start as early as possible. The difference in annual premium between enrolling at birth and enrolling at age 8 for the same sum assured can be 40 to 60 percent. Every year of delay costs you more in premium for the same benefit.
Calculate your target corpus honestly. Use an education inflation rate of 10 to 12 percent for projections. If the course you have in mind costs ₹15 lakh in today’s money and your child is currently 5 years old, the actual cost at age 18 could be anywhere from ₹50 lakh to ₹75 lakh. A sum assured of ₹10 lakh, even with bonuses, will not fill that gap on its own. Use child plans to fund a guaranteed portion of the need and build the rest through separate investments.
Never skip the Premium Waiver Benefit rider. The incremental cost is small relative to the protection it offers.
Check sum assured rebates. Higher sum assureds often qualify for premium rebates. Ask your LIC advisor to show you the rebate structure before finalising the sum assured.
Maintain a separate term plan on your own life. Your family’s financial security depends on your income. A child plan is not a substitute for adequate personal term cover.
Revisit your financial plan every three to five years. Education costs rise faster than expected. If your existing child plan’s projected payout is falling short of revised estimates, supplement with additional savings.
Frequently Asked Questions
Can grandparents purchase these plans for grandchildren? Yes, grandparents can be proposers for grandchildren, subject to LIC’s age and underwriting requirements at the time of application.
What happens if I miss a premium payment? A grace period of 30 days applies for non-monthly modes. If the premium remains unpaid beyond the grace period, the policy lapses. You can revive the policy within 5 years by paying all overdue premiums with interest, subject to health underwriting.
Are these plans available on the LIC website? As of April 2026, Plans 732 and 734 are not available for direct purchase online. They must be purchased through a licensed LIC agent, broker, corporate agent, or insurance marketing firm.
Which plan is better for a girl child? Both plans are equally suitable for any child. LIC’s broader marketing also promotes dedicated schemes for girl children, if you want guidance on which plan optimally serves a daughter’s education and marriage timeline, the team at lifeinsuranceadvisor.in can walk you through a customised comparison.
How do I calculate the right sum assured? Estimate the future cost of education using compound interest at 10 to 12 percent. If the target course costs ₹20 lakh today and your child is 5 years old, the cost at age 18 will be approximately ₹20 lakh multiplied by 1.10 to the power of 13, which equals roughly ₹68 lakh. Your child plan, supplemented by other savings, should together target this number.
Can I add the PWB rider later? In most cases, the PWB rider can be added after policy issuance if the remaining premium paying term is at least 5 years. However, it is best practice to add it at inception to avoid complications.
Making the Right Choice
LIC’s Plan 732 and Plan 734 remain among the most dependable tools available to Indian parents for structured, guaranteed, IRDAI-compliant child financial planning in 2026. They are not the highest-returning instruments on the market, traditional participating plans rarely are, but they offer something that no market-linked product can match: guaranteed payouts at defined milestones backed by India’s largest and most trusted insurer, with a built-in mechanism to protect the child’s financial future if the parent is no longer around.
Plan 732 is the right choice if you want lump sums at early education milestones, college admission at 18 and graduation by 22, followed by a final payout at 25. Plan 734 is the right choice if you want steady annual income during the five prime college years and prefer to complete premium payments by the time expenses begin.
For parents who want maximum life cover and potentially higher long-term returns, combining a modest child plan with a standalone term plan on the parent’s life and disciplined equity mutual fund investments can outperform either option individually. But this requires financial discipline and comfort with market volatility. Traditional child plans eliminate both of those requirements.
Whatever path you choose, the most important action is to start today. The longer you wait, the higher your premiums and the smaller your time advantage.
Get Free Expert Advice
If you have questions about which plan suits your child’s age and your financial goals, want an exact premium calculation, or need help comparing LIC term insurance plans to build a complete protection strategy, visit lifeinsuranceadvisor.in.
Our IRDAI-licensed advisors offer free, no-obligation consultations. Share your child’s age, your target sum assured, and your budget and we will respond within 24 hours with a clear, personalised recommendation. No jargon, no sales pressure, just honest guidance.
Secure your child’s future. Start today.
Disclaimer: This article is for educational and informational purposes only. Plan features, eligibility criteria, premiums, and tax benefits are indicative and subject to LIC’s prevailing terms, underwriting norms, IRDAI guidelines, and applicable taxes at the time of purchase. Always refer to the latest policy brochure available on licindia.in and consult a licensed insurance advisor before making any purchase decision. Insurance is a subject matter of solicitation. Tax benefits are subject to current Income Tax laws and may change. Past bonus declarations do not guarantee future performance.
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