Easypolicy FAQs
Child Plans FAQs
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Q- What are child life insurance policies?
A- Child life insurance plans are savings cum protection plans that allow you to build a corpus for crucial milestones in the life of your child. The plan remains in force even if something happens to you during the Term of the policy.

Q- Why should I buy child life insurance policies?
A- Buying child insurance plan helps discipline your savings for your child. Maturity of child plans coincides with the specific times when you might need extra finances to meet the child requirements, thus easing out the financial problems at given times. They also provide cover to the parent or the guardian for the agreed duration so that if anything happens to the parents, the child is still financially secure with all the benefits still available.

Q- Who can buy children’s plans?
A- Whoever has children dependent upon them can buy child plans. They can be parents, grandparents or legally assigned guardians of the child.

Q- When should I buy a child plan?
A- Ideal time to buy a child plan is when the child is still young and not reached teens. This allows enough time to build the corpus you have planned for, with considerably lower premiums. If the child is already in teens, you hardly get 3 to 5 years to build the same corpus so the premiums are quite high.

Q- What happens if the proposer passes away?
A- Most child plans come with the payer benefit or the Waiver of Premium benefit. So, if the Proposer dies, the insurance company takes care of all the future premiums of the child’s policy. The child is also entitled to a sum Assured along with it. Each insurance company has this benefit in exact or similar form depending on the company policy. Generally payer benefit is inbuilt in the child plan but if not, it can be taken as a rider with nominal premium.

Q- What is a traditional child insurance policy?
A- The traditional child insurance policy has guaranteed returns. It has a fixed maturity amount that is given to the insured at a specific age. It can be of two types:
i. Child endowment policy: In this case the child receives a fixed maturity amount in lump sum at the maturity of the plan.
ii. Child money back policy: Here, the child receives fixed portions of the sum assured at pre determined regular intervals. Finally on the policy maturity date, the child receives balance maturity amount.

Q- Should I buy a traditional plan or a ULIP?
A- It depends totally on your ability to bear the risks and the ups and downs of the market. Traditional plans are Risk free. The returns may be on the lower side but are guaranteed. Unit linked child pans are market based. Returns depend on the type of funds and market conditions at the time of maturity.

Q- What is guaranteed addition?
A- Guaranteed addition is a percentage of sum assured which the insurance companies guarantee. It is added to the basic sum assured or the maturity amount and is payable at the time of policy maturity.

Q- What is loyalty addition?
A- Loyalty addition is a kind of Bonus amount declared by the insurance company from time to time depending upon the company performance. It is a non guaranteed amount calculated on the sum assured. This amount is added to the Maturity amount and is payable to you on the maturity date.

Q- How do I get the maturity amount?
A- The insurance companies issue a discharge or the claims form some time before the maturity date. You need to fill up the form and send it to the insurance company along with documents as mentioned in the form. The amount is then sent to you or deposited in your account.

Q- Is the maturity amount taxable?
A- The Maturity amount of a child life insurance Policy is tax-free.

Q- How should one make a claim in case of death of proposer?
A- The nominee needs to intimate the insurance company regarding the death of the proposer. The claim has to be filed and submitted to the insurance company along with the listed documents like death certificate, policy document etc. The insurance company may take some time to verify the information and only then process the claim.

Q- Is the death benefit taxable?
A- The Death Benefit is tax-free money paid to the nominee.

Q- Can a claim be denied in event of death of the insured?
A- Yes, death benefit can be denied in some cases:
i. Death benefit is not payable in case the insured commits suicide within 12 months of taking the policy or within 2 months of reinstating the lapsed policy.
ii. If the policy has lapsed due to non payment of premiums, death benefit is not payable.

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