Sukanya Samriddhi Yojana VS LIC Kanyadan Policy
Having a girl child is no longer a burden. Keeping pace with this notion, different insurance plans are designed to cater to the needs of the parents who bear a girl child. Sukanya Samridhhi Yojana and LIC Kanyadan Policy are among those policies which are made with the same agenda to offer maximum coverage and protection to the girl children. In this article, these two policies are discussed in detail and the major differences between the two policies are also highlighted for your better understanding.
What is Sukanya Samriddhi Yojana?
It is a scheme that was launched by the Prime Minister of India to promote the agenda “Beti Bachao Beti Padhao” under the same scheme. This small savings scheme is launched with the aim to brighten the future of the girl children. The scheme is available at an affordable premium rate to reap the best interest in order to build a safe and secure financial corpus to ensure the overall protection of the girl children.
Benefits And Key Highlights of Sukanya Samriddhi Yojana
The advantages and the facilities that are available under this scheme are as follows.
- The minimum deposit amount for this scheme is Rs. 250 and the maximum limit is Rs. 1.5 lakh in a financial year.
- For a girl child, only one account can be opened, not two.
- The account can be opened by the parents of the girl child in the name of the daughter only till she attends the age of 10 years.
- An account under this scheme can be opened for a maximum of two girl children in one family.
- Documents required for opening the account are the birth certificate of the girl child, the address proof of the guardian and the girl child, valid identity proof, and other documents as demanded.
- The account can be opened in the post office and banks which have permission to sell the scheme.
- The account in the name of the girl child can be transferred anywhere in India from one post office or bank to another.
- In case of the marriage of the girl child after she attains the age of 18 years, the account can be prematurely closed.
- The account will mature on the completion of a period of 21 years from the date of opening the account.
- Under this scheme, one can also avail of the tax exemption benefit on the interest earned on the account according to the Income Tax Law under Section 10 of I. T. Act.
- The deposit qualifies for the deduction under Section 80C of the Income Tax Act.
- Under the scheme, one can only withdraw the money for the purpose of higher education f the account holder to meet the educational needs.
- Interest on deposit – The deposit made in the account between 12th December 2019 to 31st March, 2020 and the balances at the credit of the account will earn interest at the rate of 8.4% per annum. The deposit was made in the account on or after 1st April. 2020 and the balances at the credit of the account will earn interest at the rate of 7.6% per annum.
- In case of the untimely death of the account holder – In that case, the account will be closed immediately. For that, you need to submit the death certificate issued from the valid concerned authority. The following benefits will be provided to the guardian under such scenario:
- The balance at the credit of the account and the interest due till the date of the demise will be paid.
- The account can be closed in 5 years in case of life-threatening disease of the account holder and satisfactory documents have to be provided.
What Is LIC Kanyadan Policy?
The first thing that has to be remembered is that there is no such policy called, LIC Kanyadan Policy. It is simply a customized form of the LIC Jeevan Lakshya Policy, which is a participating non-linked plan that has come up with both the protection benefits and the savings facilities. Different insurance companies use the name LIC Kanyadan Policy just to attract the policy-seekers and to promote awareness regarding the insurance policies specifically designed for the girl child.
LIC Kanyadan Policy is a financial cushion for the parents of the girl children who want to build a financial corpus to secure their daughters’ future. This protection and savings plan helps a parent to deposit the money at a lower premium rate to meet the educational needs and future needs, such as the marriage of the girl child.
Key Highlights & Benefits of LIC Kanyadan Policy
LIC Kanyadan Policy promotes that the girl children are not burdens on their parents, even after the demise of the bread-winner of the family. Here are some key features and benefits of the policy.
- On the unfortunate untimely demise of the life assured within the policy term of an active policy, the death benefit will be provided to the beneficiary.
- Only the guardian of the girl child can buy the policy. The policy cannot be bought in the name of the girl child.
- The insured person is also eligible to avail of the maturity benefit, which will help his/her daughter to fulfill her future needs.
- Four rider benefits can be availed of only by paying a little extra premium. The riders are LIC’s Accidental Death and Disability Benefit Rider, LIC’s Accident Benefit Rider, LIC’s New Term Assurance Rider, and LIC’s New Critical Illness Benefit Rider.
- For the benefit of the girl child, LIC has brought the facility to take the death benefit in installments, monthly, half-yearly, quarterly, and annually, instead of a lump sum amount to generate a regular flow of income.
- The LIC Kanyadan policy can be surrendered at any time provided at least two full years’ premiums have been paid.
- To meet the need of the girl child, the life insured can avail of the loan facility under this policy only if at least two full years’ premiums are paid and this is subject to the terms and conditions of the policy.
- As this policy takes participation of the profit of the Corporation, the life assured is entitled to receive simple reversionary bonuses, in case of an active policy.
Difference Between Sukanya Samriddhi Yojana and LIC Kanyadan Policy
For your better understanding of the Sukanya Samridhhi Yojana scheme and LIC Kanyadan Policy, the differences between the two have been discussed in the below table. Have a look at it.
|Parameters||Sukanya Samridhhi Yojana||LIC Kanyadan Policy|
|Age at entry||The girl child has to be below 10 years|
Father – 18 years to 50 years
Girl child – Minimum 1 year
|Launched by||This policy is launched by the Central Government of India.||This policy is the initiative by the Life Insurance Corporation of India (LIC).|
|Policy holder||The policy should be in the name of the girl child||The policy can only be bought by the guardian.|
|Nationality eligibility||This policy is only for the Indians||The NRIs can also buy this policy.|
|Premium limit||Maximum Rs. 1.5 lakhs in one year||No upper limit|
|Sum assured||Limited according to the premium paid|
Minimum – Rs. 1 lakh
Maximum – No upper limit
|Loan facility||No loan facility is available||A loan facility is available only if at least two full years’ premiums are paid.|
|Account maturity tenure||Till the girl child attains the age of 21 years or till the marriage only after she meets the age of 18 years.||13 years to 25 years|
|Policy type||Purely savings scheme||Combination of savings and protection benefits. It is a tailored version of the LIC Jeevan Lakshya Policy.|
|Premium payment term||The premium has to be paid every financial year. The maximum limit is Rs. 1.5 lakhs per year.||Policy term minus 3 years|
|In case of untimely demise||In case of the death of the girl child (account holder), the balance at the credit of the account and the interest due till the date of the demise will be paid.||In case of the demise of the life assured, the premium is waived off.|
|Rider benefit||No such benefit is available||4 rider benefits are available to choose from.|
|Participation in profit||The scheme does not participate in such profit.||The policy participates in the profits of the Corporation.|
|Interest on deposit||Fixed interest is provided.||No such fixed interest is there.|
Sukanya Samriddhi Yojana or LIC Kanyadan Policy - Where Should Invest?
Though the two policies are made for the same purpose that is to ensure the security and safety of the girl child, essentially the Sukanya Samriddhi Yojana scheme and LIC Kanyadan Policy are different from each other. If someone wants a plan which is dedicated to the girl child at an affordable premium rate, Sukanya Samridhhi Yojana is the ideal one. But if someone wants protection plus savings benefits, which can be used for the girl child or for other purposes, LIC Kanyadan Policy is suitable for him. But, the girl child can only avail of the benefits, if the life assured dies untimely whereas in the case of Sukanya Samridhhi Yojana, the account is in the name of the daughter and she can handle the account after attaining 18 years of age.
From the above discussion, it can be said that both the policies have come up with a sack full of benefits and facilities. So, it will be very unfair to declare one policy as the best one. It totally depends on the purpose and the requirements of the policy-seeker that which policy suits him/her the best.
Frequently Asked Questions
The guardian of the account holder will handle the account till she reaches the age of 18 years. Once the account holder becomes 18, she will be handling the account on submission of the necessary documents.
Yes, you can do partial withdrawal up to a maximum limit of 50% of the amount that you have in the account till the end of the financial year of the year of application of the withdrawal.
The required documents are as follows:
- Valid proof of confirmed admission to the institution.
- Fee-slip as the proof of the admission and the amount.
On maturity of the scheme, the account holder will get the balance that is in the account along with the interest as applicable by the terms and conditions of the scheme.
Yes, the premiums can be paid in installments during the premium paying term at yearly, half-yearly, quarterly, or monthly mode (through NACH only) or through salary deductions over the premium paying term of the policy.
The free look period of LIC Kanyadan Policy is 15 days.
The required documents are as follows:
- Birth certificate of the girl child
- Identity proof of the parent or legal guardian (PAN card, voter ID card, etc.)
- Address proof of the parent or legal guardian (Passport, Aadhaar card, etc.)
- Income proof of the parent or legal guardian (Bank statement, salary slip, form 16, etc.)
To avail of the Sukanya Samriddhi Yojana scheme smoothly, follow the below-mentioned easy steps:
- Go to the official website of Sukanya Samridhhi Yojana or you can also visit the nearest post office or your bank if it is authorized to sell this scheme.
- Collect the form from any of the afore-said sources and fill it up correctly with the right information.
- Submit the duly filled and signed form with the required documents.
- After the verification, if no discrepancy is found, your account will be created and you are ready to deposit for the future of your girl child.
The major exclusion of this policy is that if the life assured commits suicide, the policy will not take any responsibility to compensate for that.
There might be income tax benefits as per the prevailing tax laws of India. For a better idea, you need to contact the official executives of LIC.