Tag Archive | "Child Insurance"

An Overview of Best Child Insurance Policy in India

  • Easypolicy
  • 19 Oct 2016

Child insurance plans are one of the best kinds of insurance policies available these days. These plans help you to secure the futures of the most precious and loved people in your life – your children. A child plan not only builds up a healthy corpus for the child, it also insures your life and provides cover to your kids if you die prematurely. The plan also becomes a lifelong assistant and provides you with monetary aid when you need it the most for your children. There indeed are many advantages of buying a child plan. Today, in India, there are many good child plans that are available. Listed below are the five best child plans and their advantages. 
The best child insurance plans in India

1.    LIC Child Carrier Plan – Life Insurance Corporation (LIC) is the Premium insurance provider in India. Every LIC plan carries a lot of weight and the LIC Child Carrier Plan is no different. This plan is loaded with features such as a high sum Assured of up to ? 1 crore, premium Waiver benefit and periodic payouts.

2.    LIC New Children’s Money Back Policy – Another good product from LIC, the New Children’s Money Back Policy is a very popular child plan. Apart from providing the best features, the plan also participates in the company’s profits. As a policyholder, you can use this plan as collateral to take a loan as well.

3.    Kotak Headstart Child Assure – This child plan is popular mainly because it offers a very high policy period of up to 25 years. The plan also has the unique ‘triple benefit’ feature under which the beneficiary, after the policyholder’s death, will receive the basic sum assured, the premium waiver advantage and will also continue to stay protected till the policy matures.

4.    BSLI Vision Star Plan – The Vision Star Plan from Birla Sun Life Insurance is the next plan that deserves a mention. This is a basic, no-nonsense child plan that pays out a part of the Sum Assured at specific time intervals.

5.    PNB Metlife Smart Child – This is a very good plan that is available at a reasonable price. The premiums start from just ? 18,000 per annum. This is a plan that offers good value for your money.
Advantages

There are many who argue that child plans are too expensive. However, when we look at the advantages they offer, the expenses are justified. Some of the advantages include:

•    Good savings tool – Swapnil Pawar from Karvy Private Wealth, while speaking about an average Indian investor, says, “If he is given a choice, the investor loses discipline and stops investing.” A child plan enforces discipline and compels the parent to save for the child’s future and build up a healthy corpus.
•    Timely financial assistance – Like mentioned above, a child plan pays out at specific intervals which you can decide beforehand. A child’s needs vary at different stages of his life. The cost of his school admission is lesser than the cost of his foreign university admission. A child plan allows you to plan ahead and then provides you some solid financial assistance when you need it the most.
•    Protects you, protects your child – Last but not the least, a child plan protects you and protects your child. It protects you by giving you all the financial help you need to provide the best for your child. It protects your child by insurance your life and ensuring help in your absence. The dual protection feature is one of the biggest advantages of a child plan.

Conclusion

So as we can see from the points mentioned above, child insurance plans are practical financial tools that every parent with a small child must invest in. There are many options and you can choose a plan based on your own Risk appetite. Including a child plan in your insurance portfolio is not just wise, it is almost mandatory. So if you haven’t considered getting a child plan yet, you must do so right away!


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Why You Need Child Insurance Coverage?

  • Easypolicy
  • 21 Sep 2016

Your child would grow up sooner than you think!! Time flies past us so swiftly before we even realize. Being a parent you want your child to get all the financial aid needed to establish a great career and a happy life ahead. I was reading a bestseller book named ‘Rich Dad Poor Dad’ by famous author Robert T. Kiyosaki, the book states that although formal education is not ‘the be all and end all’ of your child’s financial future, it is still very important. The book emphasizes on its famous CASHFLOW quadrant which categorizes people in four different types, namely Employee Quadrant (E), Self Employed Quadrant (S), Business Owner Quadrant (B) and lastly, Investor Quadrant (I).

To be rich one has to be in the business quadrant or investment quadrant. To be a big business owner you need loads of investment and there is high Risk especially if you lack experience, for being an investor again you need lots of money, moreover your investments can go bad and you may suffer losses. A sure way to get financial security is to go in the E or S quadrant wherein you would either be an employee or a professional like Doctor, lawyer, CA etc. To be successful in the E and S quadrant your academic achievements and soundness would give you a competitive edge. And after being successful in these quadrants one can gradually move towards the B and I quadrants. Thus, good education is highly important to take up a high paying and satisfying employment. If you start with a good job you get healthy experience and can save more from the high salary. Then if you want to go in business you can use that experience and savings to invest in the business.

But higher education is very costly. If you are a parent and you belong to either of the first two quadrants, chances are that you won’t have that much spare amount that you can spend 20-30 lacs that easily. The amount increases multifold if your child wants to study abroad and keeping the Inflation angle in mind, the cost is only going to be higher.

Quoting from a book written by celebrated American investment and finance expert, Brian Tracy, “one should always name one’s money. In other words, one should mark the destination of every penny so that you can check your extravagant expenditure and save money for a desired cause. Pre-planned channelization of money promotes systematic investment. Similarly, you should have dedicated savings in the name of your child, so that when he grows up he has enough money with him to pursue desired studies for which he is capable or for marriage.

The best bet is to invest in a child insurance plan. These plans are specialized child protection plans that help the child in two ways or two scenarios. First scenario, they provide a fund in which you keep investing money in the form of premiums and your money grows over a period of time called accumulation period. At the time of Maturity of the Policy your child gets the money. Second scenario, life is very unpredictable, you would do anything for your child while you are alive but what if something happens to you? Here the insurance aspect of the child plan takes prominence. If you die during the currency of the policy, the insurance company does not terminate the policy rather invests in the fund on your behalf and also pays a sum called Death Benefit to the guardian of the child for the maintenance of the latter. Thus, in a single plan you get the benefit of insurance and investment.

The motto of these plans is ‘your death shall never be a hindrance in your child’s success path’.  If your child is bright he should get his share of opportunities to explore his potential. You have trained him to be successful, don’t let a little lack in your planning to spoil that common vision you and your child share. Compare child insurance plans to have the soundest product at best prices and take the first step towards filling your child’s future with opportunities.

The sooner you start the wiser. Delay would cost you more in the form of rising inflation and lesser time to accumulate money. Even if your child is an infant, don’t think that a lot of time is left with you. Experts say that you should start studying child plans as soon as you know that you are expecting a child. Start at your earliest to avoid burden later.


How to Compare Benefits of Child Insurance Plans

  • Easypolicy
  • 28 Jul 2016

There was a case study I was reading the other day about demographic shifts in India over some past decades. It brought forth a very interesting observation that in previous generations parents could raise a family consisting of 6-7 children quite comfortably in a mediocre job and still the children made good careers for themselves. In today’s time it is a challenge to raise even two children from a high paying MNC job. Overall Inflation and rise in the standard of living accounts for this.

Westernization of the Indian society has brought rapid urbanization that has resulted in increased materialism. Highly materialistic societies bring upon immense pressure on the people to compete and win a good life for themselves. Education being the sure route for achieving such material success is witnessing increasing demand and the population explosion in the country is adding to this havoc. This ever increasing demand is resulting in the swelling of education costs mercilessly.

What to talk of higher education, the fees model of some premier primary schools resemble to that of many B-schools in the country. Thus, if you are a parent or planning to be, sit with your financial advisor and explore various investment and savings schemes to attain financial soundness and ability to provide your children unhindered good education.

You need to start making some projections based on your child’s age, current education costs and inflation rate. Upon reaching a ball park figure you start making contributions to a fund. Yes, in order to have systematic savings you need to create a fund. Investing in a particular fund for child education would save you from breaking FDs or liquidating other investments intended for some other purpose.

This particular fund can be your child insurance plan Investing in a child insurance plan has many advantages over a regular fund created to finance child education. Unlike other investment schemes, life insurance plans provide Death Benefit i.e. the company pays for the maintenance of the child in case the investor dies during the Term of the plan. Not only this, the Policy is continued and future premiums are waived off by the company under such event.

Thus, the benefits of investing in a child plan are many over a regular fund. In case of child insurance plans the child gets dual benefit if the Policyholder dies during the currency of the policy. As explained above, first the company pays at the time of death of the policy holder and because of its Waiver of Premium (WOP) feature it continues to invest in the fund on the behalf of the policyholder. The money grows and at Maturity of the policy it is payable to the child.

Many companies have plans that offer feature of multiple payouts i.e. at specified time intervals the company pays a certain amount which can be used to fund various important events in the life of the child. And if, the Insured survives the policy term, the company pays the sum Assured as agreed at the signing of the policy.

The child insurance plans can either be Endowment based or ULIP based. ULIP based plans are invested in stock market and can be considered riskier but can provide much higher returns than Endowment based child plans. Endowment based child plans pay according to the profit earned by the insurer. The premium received under such plans is invested in debt instruments and thus a return of not more than 5% should be expected. Thus, basis your Risk capacity, choose your child insurance plan.

Typically, financial advisors recommend couples to foresee the entire lifecycle of the child right on learning about the pregnancy itself and start investing at the earliest. The early movers are handsomely rewarded for their timely planning and are able to generate a bigger corpus at lesser expense. Systematic savings would save you from big financial burdens in the future and with little prick on the pocket you can fortify your child’s future and can avoid sleepless nights hankering over increasing education costs.