Child Insurance Plans

1
Child Insurance Plans
2

• In India, life insurance for a child is not a
  very popular concept. But this is a highly
  beneficial policy type that provides maturity
  benefits, tax savings, flexible repayments, and
  high returns as compared to fixed deposits or
  provident fund accounts.
• When compared with other investment tools like
  mutual funds or fixed deposits, child insurance
  plans are a safe and secure way to earn higher
  interest rates on the investment. Flexible
  payments at maturity as well as the option to
  invest in equity or debt instruments
  interchangeably make these policies the choice
  option for people who have a decent level of
  financial knowhow.

3

• Life insurance for children loosely implies
  buying of life insurance policies by the
  proposer, whose benefits will then be forwarded
  to the child at various important junctions of
  his/her life such as education, marriage,
  mortgage payment, and so on.

4
Reasons to Buy Childrens Life Insurance Policies

• Child insurance plans offer assured benefits to
  your child or ward when they come of age and need
  the funds for future prospects. So, if your child
  is 8 years old now, then you can buy a child
  insurance plan that will mature in 10 years when
  he/she turns 18. The funds can be released as a
  lump sum, or you can choose partial payments so
  that the money may be partially withdrawn as and
  when needs arise.

5
Features of Child Insurance Plans

• In general, life insurance policies for children
  are meant to provide a cushion to s child in case
  the death of a parent presents financial
  difficulties in pursuing important life choices.
  These plans are available in both linked and
  non-linked varieties, with various options to
  singly or periodically pay premiums.
• Premiums Premium can be paid as a lump sum at
  the beginning of the policy tenure, or you can
  choose to pay it periodically. Most companies
  provide options such as monthly/quarterly/half-yea
  rly/annual premium collection, which can be given
  standing instructions to be credited directly
  from your bank accounts.

6

• Sum assured The sum assured implies the amount
  that will be paid out in case of the
  policyholders demise. In general, sum assured
  should be above 10 times the current gross income
  of insured.
• Maturity The maturity amount should be chosen
  with an eye on the future. Assuming your child is
  8 years old, and his policy will get matured in
  10 years time, then you should take into
  consideration factors such as inflation and
  interest rates. If you fail to consider these
  factors, the released funds may fall short of the
  requirements in future. Also, plans such as
  single premium child plans in India may not
  provide maturity benefits, so kindly check the
  policy documents clearly before applying.

7

• Tenure These life insurance policies are
  generally meant for children up to the age of
  18/21, though you can find specific plans that
  have a higher age ceiling.
• Segmented payouts With child life insurance
  policies, you can select if the child will get
  payment as a lump sum, or in yearly instalments.
  Such a setting will help in paying dues such as
  college fees, mortgage amounts etc.
• Premium waivers An intrinsic part of child
  plans, premium waivers are applicable when the
  insured dies within the stipulated tenure. In
  such a scenario, the sum assured will be paid out
  to the child or ward, while the premium for the
  remaining tenure will be paid by the insurer. At
  the end of tenure, maturity amounts will be
  provided as detailed in the policy document.

8

• Riders Specific riders are available that give
  you more out of your life insurance policy. The
  riders are available in three basic categories
  premium waiver, critical illness, and accidental
  death and disability. The premium waiver may
  already be added with your plan, so please check
  the policy documents in this regard. The critical
  illness rider provides coverage for critical
  illness, while accidental death and disability
  riders are applicable in case of unfortunate
  accidents that cause disability or death of the
  insured.

9
https//www.facebook.com/bajajallianzlifeinsurance
ltd
https//twitter.com/bajajallianzLIC
Sourcehttps//www.bankbazaar.com/insurance/child-
insurance-plans.html