Summary: LIC’s Amritbaal Plan 774 (UIN 512N365V02) is a non-linked, non-participating child-life savings policy with a fixed addition of ₹80 per ₹1,000 of basic sum assured for each in-force policy year. Entry is permitted from 30 completed days to age 13, with maturity between ages 18 and 25, and single-premium or five-, six- and seven-year limited-premium options. Death-benefit choices, delayed commencement of risk for young children, an optional premium-waiver rider, paid-up conversion and surrender rules materially affect the policy outcome. The annual addition is not an annualised return on premiums. From 1 April 2026, life-insurance premium deductions and maturity exemptions must be evaluated under the Income-tax Act, 2025, including Section 123 with Schedule XV and Section 11 with Schedule II; availability depends on the tax regime and statutory conditions. Individual life-insurance premiums are GST-exempt from 22 September 2025, unlike group cover. This article examines the official LIC brochure, key cash-flow risks and compliance records without recommending the product.

LIC Amritbaal Plan 774: Product Identity and Purpose

LIC’s Amritbaal, Plan No. 774 and UIN 512N365V02, is a non-linked, non-participating individual life savings product intended to build a specified maturity corpus for a child. The official brochure effective from 22 September 2025 describes a fixed guaranteed addition rather than a share in LIC’s distributable surplus. That distinction is important: a contractual guaranteed addition is not a discretionary reversionary bonus and is not a market-linked return. The product combines an insurance contract on the child’s life with a savings maturity benefit, subject to premiums being paid and the policy remaining in force.

The policy is marketed for higher education and other future expenditure, but no legal restriction earmarks the proceeds solely for education. A family must therefore distinguish the insurer’s product objective from its own savings target, projected education inflation and liquidity requirements. The policy is not a substitute for insurance on an earning parent, particularly because the child is the life assured. A premium-waiver rider can address one specific proposer-death risk under eligible limited-premium variants, but that rider is not automatically included.

Eligibility, Premium Options and Maturity Age

Age at entry, the chosen maturity age and the premium-paying term interact. A policy for a very young child may have a long accumulation period, while a policy for a 13-year-old cannot be structured as though the child were an infant. LIC’s rules require the policy term and maturity age to remain within the permitted ranges. Before treating an online quotation as final, the proposer should verify the age calculation, chosen death-benefit option, payment frequency, underwriting loadings and the exact maturity date printed in the policy schedule.

Four death-benefit options are not interchangeable

The selected death-benefit option affects pricing and protection and cannot be changed subsequently under the published brochure. Under an in-force limited-premium policy, the death benefit is also subject to a floor of 105% of total base premiums paid, as defined by LIC. For a child whose risk has not commenced, the claim treatment is materially different: LIC provides for refund of qualifying premiums without interest, rather than the full insured death benefit. Readers should not quote a single death-benefit figure without specifying the child’s age and risk commencement.

Guaranteed Additions: How the Corpus Is Calculated

LIC specifies guaranteed additions of ₹80 per ₹1,000 of basic sum assured at the end of each policy year for an in-force policy. The annual addition is therefore 8% of the basic sum assured, not an 8% annual compound investment yield on premiums. The distinction is fundamental: a percentage applied to the sum assured says nothing by itself about the internal rate of return on the premium cash flows. Premium size, payment dates, age, policy term, chosen option and applicable rebates determine the actual yield.

For a purely illustrative basic sum assured of ₹5,00,000, the stated addition is ₹40,000 per policy year (₹5,00,000 ÷ ₹1,000 × ₹80). If an eligible policy stays in force for 15 years, cumulative guaranteed additions under this simplified illustration would be ₹6,00,000, producing a maturity benefit of ₹11,00,000 before considering any permitted settlement election. This is a contractual-benefit illustration only: it does not assume or reveal the premium, annualised return, inflation-adjusted purchasing power or post-tax outcome. Actual maturity calculations must use the issued policy.

Death Cover, Risk Commencement and Premium Waiver

For entry below age eight, LIC’s brochure states that risk commences at the earlier of two years from commencement or the policy anniversary coinciding with or immediately following attainment of age eight. Where the child is at least eight at entry, risk begins from issuance. The policy automatically vests in the child on the policy anniversary coinciding with or following attainment of age 18. Vesting changes who is treated as contracting policyholder, so nomination, address, bank mandate and settlement instructions should be reviewed before the eighteenth birthday.

The optional premium-waiver rider is available under the limited-premium options subject to eligibility and additional premium. If the proposer dies while the qualifying rider is operative, future base premiums falling due during the rider term may be waived according to its wording. It does not convert the child’s policy into full term insurance on the proposer, and its term and entry restrictions matter. LIC also excludes the rider for specified point-of-sales channels. Families should check the rider UIN, proposer age, remaining premium term and claim evidence rather than assuming the rider applies merely because the parent pays premiums.

Surrender, Paid-Up Policy and Liquidity Risk

Early discontinuance is a central financial risk of a traditional savings policy. Under limited-premium options, failure to pay after at least one full policy-year premium has been paid can result in a reduced paid-up contract; before the stated threshold, benefits may cease without refund after the grace period. A paid-up policy reduces the assured benefit in proportion to premiums paid against premiums originally payable, with special rules for reduced guaranteed additions. It is incorrect to project the original maturity figure after a policy has become paid-up.

LIC permits surrender of a limited-premium policy after completion of the first policy year where the prescribed premium condition is met; the guaranteed surrender value is acquired after at least two full years’ premiums, while a special surrender value may arise earlier under the brochure. Single-premium variants may be surrendered during the term. The payable surrender value is the higher of the applicable guaranteed and special surrender values, not necessarily the aggregate premiums or accumulated additions. Policy loans provide another liquidity route subject to loan-value, interest and outstanding-balance conditions; borrowing against the policy can reduce net claims if not repaid.

Income Tax in Tax Year 2026–27: Deduction and Maturity Are Separate Tests

The Income-tax Act, 2025 applies from 1 April 2026. The familiar Section 80C terminology belongs to the Income-tax Act, 1961; the corresponding life-insurance premium deduction for tax year 2026–27 is under Section 123 read with Schedule XV, subject to the applicable tax regime, relationship, sum-assured percentage and aggregate deduction ceiling. Under the old regime, eligible premiums for an individual’s child can form part of the overall ₹1.5 lakh savings deduction. Under the default new tax regime, this deduction is generally unavailable. Buying an insurance product does not by itself create a tax deduction.

The old Section 10(10D) exemption for life insurance maturity is carried into Section 11 read with Schedule II of the 2025 Act. For a non-ULIP policy issued on or after 1 April 2023, the premium payable above ₹5 lakh in any year and the statutory aggregation rules across qualifying policies can affect exemption. The percentage-of-sum-assured test is an additional and distinct condition, and single-premium options deserve particular attention. Death claims have special statutory treatment; do not automatically apply the maturity premium ceiling to a death benefit. Each claim should be tested against the statute applicable in the year of receipt and the exact policy schedule.

If life insurance maturity is taxable, its income component may fall under income from other sources for a non-ULIP policy; a ULIP follows different capital-gains rules. The former Section 194DA TDS on life insurance rules, including the income-component principle, should be cross-checked with the 2025 Act’s operative withholding provision and current thresholds at payout. TDS is not the final tax liability, and a tax-free claim is not made taxable merely because an insurer requests PAN or tax declarations. Premium payment records, the policy schedule and previous deductions should be retained throughout the term.

GST on Individual Life Insurance From 22 September 2025

The GST exemption for individual life and health insurance became effective on 22 September 2025 following the 56th GST Council decisions and Notification No. 16/2025–Central Tax (Rate) dated 17 September 2025. The Department of Financial Services explains that the exemption applies to individual life policies and not to employer-sponsored or other group life policies, which generally continue at 18%. LIC’s current Amritbaal brochure is specifically dated for the period beginning 22 September 2025, making the updated individual-policy GST treatment relevant to current proposals.

GST exemption does not mean that the policy is “zero-rated” for all GST purposes or that every insurer input becomes creditable. Insurers must account for the exempt-supply consequences under GST credit rules. For policyholders, the key compliance step is to check the premium receipt and the policy category; if a rider or a bundled arrangement is involved, classification must follow the actual contract and current notification. The tax treatment of premiums paid before the effective date can depend on the transitional time-of-supply rules rather than on the renewal date alone.

Documentation and Audit Trail for Families and Advisers

A reliable record should include the benefit illustration, signed proposal, policy schedule, customer information sheet, nominee details, premium receipts, rider schedule and correspondence on underwriting. A spreadsheet comparing premiums paid on their actual dates with contractual maturity and death benefits is more informative than dividing total maturity value by basic sum assured. Any projected annualised return must be calculated from actual cash flows and should separately model early surrender, inflation and the effect of a non-exempt maturity. For tax preparation, preserve the evidence of who paid the premium and whether a deduction was claimed.

Frequently Asked Questions

1. Is Amritbaal a market-linked investment?

No. LIC describes Plan 774 as non-linked and non-participating. The contractual addition is based on the basic sum assured, not on NAV or a discretionary participating bonus.

2. Can the child be only a few months old?

Yes, subject to the published minimum entry age of 30 completed days and underwriting. The date of risk commencement may be later for a child younger than eight.

3. Does ₹80 per ₹1,000 mean an 8% investment return?

No. It is the annual guaranteed addition calculated on basic sum assured. Actual annualised yield requires all premium payments, dates and claim amounts.

4. Can the parent stop paying after two years without losing value?

A reduced paid-up value may arise subject to the contract, but benefits can fall substantially. The policy will not continue at its original full assured value.

5. Does the proposer receive life cover automatically?

No. The child is the life assured. An eligible premium-waiver rider covers a defined proposer-death contingency only when separately selected and accepted.

6. Is the premium deductible under Section 123?

Only where the taxpayer chooses an eligible tax regime and satisfies Schedule XV and the aggregate ceiling. The deduction is not automatically available in the default new tax regime.

7. Is maturity always exempt from income tax?

No. Section 11 read with Schedule II imposes conditions, including premium-to-sum-assured and high-premium policy tests. Death claims have separate treatment.

8. Is GST charged on a new individual Amritbaal policy?

The government’s individual-life insurance exemption applies from 22 September 2025. Check the issued premium receipt and whether the arrangement is truly an individual policy.

Key Takeaways

• Amritbaal 774 / 512N365V02 is a child-life savings policy with fixed guaranteed additions, not an equity or debt fund.
• The addition is ₹80 per ₹1,000 basic sum assured each policy year while the policy remains in force; it is not an annual investment yield.
• Premium and death-benefit options materially change the economics and cannot be treated as equivalent.
• Tax-year 2026–27 analysis must use the Income-tax Act, 2025, including Section 123/Schedule XV and Section 11/Schedule II.
• Individual life insurance premiums are GST-exempt from 22 September 2025; group-policy treatment differs.
• Early surrender, paid-up conversion and loan balances can materially reduce the cash ultimately available.

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Disclaimer: This article is a neutral editorial explanation of LIC’s published Amritbaal Plan 774 brochure and the regulatory framework as checked on 8 October 2026. Product features, underwriting, rider availability, premium quotations, interest rates, policy servicing rules, income-tax treatment and GST classifications can change or depend on individual circumstances. The illustrative guaranteed-addition calculation is not a quotation, assured investment yield, tax opinion or recommendation to buy or surrender any policy. Readers should examine the insurer’s current benefit illustration, Customer Information Sheet, full policy wording, applicable law and their own tax regime, and seek independent licensed insurance and professional tax advice where necessary. TaxGuru assumes no responsibility for decisions, losses, tax demands, omissions or consequences arising from reliance on this article.

Primary sources verified

• LIC official Amritbaal product page, updated 9 February 2026
• LIC Amritbaal official sales brochure applicable from 22 September 2025
• Department of Financial Services: GST exemption FAQ, updated 5 January 2026
• Income Tax Department: Income-tax Act, 2025