rajanlove
Rajan Pandey
Buying a child insurance plan? Read this
A review of leading insurance plans for children launched in 2009 and which you could consider as investments for their prosperous future.
Let us first talk about a few basic questions that come to every parent's mind when they think of buying a child insurance plan. Once we answer these it will help you in deciding which child insurance plan best suits your children.
Why take a children's insurance plan?
Simply because children's plans help you save so that you can fulfil your child's future dreams and aspirations.
These plans go a long way in securing your child's future by providing the required protection and financing the key milestones in their lives, even if you are not around to oversee them. Children's plans are specifically designed such that you will be able to provide the required economic support to your child when it is most needed.
Who should take a children's plan?
All parents who have the capacity to afford such a plan should invest. It is imperative that the plan be taken by the earning parent/parents so that the financial security is provided to the child. In case of an eventuality to the insured parent, the proceeds from the claim can be managed by an appointee (spouse) till the child becomes a major.
Which plan to choose?
You should choose a plan that satisfies your need. Each plan has specific feature/features that make it unique. Although charges are important criteria to choose between unit linked plans, the features and flexibilities offered by the plans are also equally significant while choosing a children's plan. With careful selection, you can get the product that is customized to your needs.
HDFC SLIC Young Star Super
Death benefit
You have a choice of double benefit and triple benefit. Sum assured is paid out immediately.
Double benefit: All future premiums towards the policy are paid by the company and the fund value is paid to the beneficiary on maturity.
Triple benefit: 50 per cent of the premium is paid to the beneficiary and the remaining 50 per cent goes towards the policy and the fund value if paid out on maturity.
Maturity benefit: Fund value which can be taken immediately or in tranches through the five-year settlement period.
Beneficiary: In most child insurance plans, it is mandatory for the child to be the beneficiary/nominee. However, this plan has no age restrictions on whom to nominate and hence it can be taken for an older child as well.
Additional perks: Bumper additions are available if the policy is in force and no withdrawals have been made during the policy tenure. If the term is 10 years, 50 per cent of the original annualised premium is paid along with the fund value and if the term is more than 11 years, 100 per cent is added to the fund value and paid out.
Flexibilities: Top-ups are allowed when the policy is in force; 24 switches are free in a policy year; increase and decrease of premiums are allowed on policy anniversaries; 12 premium redirection requests are free in a policy year.
Ideal for: Earning parent/parents with children of any age. With no age restrictions on nominee/ beneficiary and the additional flexibilities mentioned above, it is an ideal plan for any parent wishing to secure his/her child's future.
What to avoid: Partial withdrawals affect bumper additions so if you're looking for a plan that can provide funds in tranches, let's say to pay tuition fees through college, you might want to shop around for a plan that offers that additional flexibility.
A review of leading insurance plans for children launched in 2009 and which you could consider as investments for their prosperous future.
Let us first talk about a few basic questions that come to every parent's mind when they think of buying a child insurance plan. Once we answer these it will help you in deciding which child insurance plan best suits your children.
Why take a children's insurance plan?
Simply because children's plans help you save so that you can fulfil your child's future dreams and aspirations.
These plans go a long way in securing your child's future by providing the required protection and financing the key milestones in their lives, even if you are not around to oversee them. Children's plans are specifically designed such that you will be able to provide the required economic support to your child when it is most needed.
Who should take a children's plan?
All parents who have the capacity to afford such a plan should invest. It is imperative that the plan be taken by the earning parent/parents so that the financial security is provided to the child. In case of an eventuality to the insured parent, the proceeds from the claim can be managed by an appointee (spouse) till the child becomes a major.
Which plan to choose?
You should choose a plan that satisfies your need. Each plan has specific feature/features that make it unique. Although charges are important criteria to choose between unit linked plans, the features and flexibilities offered by the plans are also equally significant while choosing a children's plan. With careful selection, you can get the product that is customized to your needs.
HDFC SLIC Young Star Super
Death benefit
You have a choice of double benefit and triple benefit. Sum assured is paid out immediately.
Double benefit: All future premiums towards the policy are paid by the company and the fund value is paid to the beneficiary on maturity.
Triple benefit: 50 per cent of the premium is paid to the beneficiary and the remaining 50 per cent goes towards the policy and the fund value if paid out on maturity.
Maturity benefit: Fund value which can be taken immediately or in tranches through the five-year settlement period.
Beneficiary: In most child insurance plans, it is mandatory for the child to be the beneficiary/nominee. However, this plan has no age restrictions on whom to nominate and hence it can be taken for an older child as well.
Additional perks: Bumper additions are available if the policy is in force and no withdrawals have been made during the policy tenure. If the term is 10 years, 50 per cent of the original annualised premium is paid along with the fund value and if the term is more than 11 years, 100 per cent is added to the fund value and paid out.
Flexibilities: Top-ups are allowed when the policy is in force; 24 switches are free in a policy year; increase and decrease of premiums are allowed on policy anniversaries; 12 premium redirection requests are free in a policy year.
Ideal for: Earning parent/parents with children of any age. With no age restrictions on nominee/ beneficiary and the additional flexibilities mentioned above, it is an ideal plan for any parent wishing to secure his/her child's future.
What to avoid: Partial withdrawals affect bumper additions so if you're looking for a plan that can provide funds in tranches, let's say to pay tuition fees through college, you might want to shop around for a plan that offers that additional flexibility.