LIC Child Plans 2026: Which One Wins for
LIC offers three popular child plans — Jeevan Lakshya, New Children's Money Back, and Jeevan Tarun. Each works differently for education and marriage savings. But before you lock in lakhs for 15-20 years, it's worth understanding what returns you're actually getting and whether a smarter alternative exists.
If you invest ₹5,000/month in an LIC child plan from your child's birth, you might get ₹15-18 lakh at age 18 — but the same SIP in an equity mutual fund could potentially grow to ₹35-40 lakh over the same period, nearly double the amount for your child's college fees.
Most traditional LIC child plans return just 4–5% annually, meaning your child's education corpus may fall short of actual college costs, which are rising at 8–10% per year.
Key Takeaways
Calculate the IRR (internal rate of return) before buying any LIC child plan — most traditional plans return just 4-5% annually, which barely beats inflation over 15-20 years
If your child is under 10, consider mixing a term insurance policy (for life cover) with a dedicated child education mutual fund SIP — this combo usually offers better returns and flexibility than a bundled plan
Already holding an LIC child plan? Don't surrender it midway — check the paid-up value and survival benefit schedule first, as surrendering early can mean losing a significant chunk of your premiums
Every Indian parent wants to secure their child's education and future. LIC's child plans — Jeevan Lakshya, New Children's Money Back, and Jeevan Tarun — have been go-to options for decades. They come with life cover, guaranteed payouts, and the reassurance of a government-backed insurer. But in 2026, it's worth asking: are these plans actually growing your money fast enough?
Jeevan Lakshya is a pure endowment plan where the sum assured and bonuses are paid at maturity, typically when the child turns 18 or 21. It also pays an annual income to the family if the parent (policyholder) dies during the term. New Children's Money Back plan pays out a portion of the sum assured at ages 18, 20, and 22 — useful for staggered expenses like school fees, college admission, and higher studies. Jeevan Tarun is more flexible, letting you choose how much of the corpus to receive as survival benefits between ages 20 and 24, with the balance at maturity.
The catch? All three are traditional, participating plans. Their actual IRR (internal rate of return) typically lands between 4% and 5.5% per year after accounting for premiums paid and bonuses received. With higher education inflation running at 8–10% annually in India, a ₹10 lakh target today could require ₹25+ lakh by the time your child hits college — and a 4.5% IRR plan may simply not get you there.
A smarter approach for many families: buy a pure term insurance policy for the parent (much cheaper than bundled insurance-investment plans), and separately start a SIP in a child-focused or flexi-cap mutual fund. This separation of insurance and investment typically delivers better outcomes over 15-20 year horizons. You can explore goal-based saving options and compare loan products for education funding on GoCredit to build a complete plan.
Pro tip: Before buying any child plan, ask your agent or insurer for the IRR illustration on the benefit illustration document — this single number tells you your real annual return, making it easy to compare against a fixed deposit, PPF, or mutual fund SIP.
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