Tag Archive | "Child Insurance"

Ulips or Traditional? Which is The Better Variant of Child Plan?

  • Easypolicy
  • 24 Jun 2014

The demand of child insurance policies has seen a steep rise in the last couple of years. Parents are more concerned about the betterment of their children. They want to fulfill all the wishes of their children, be it pursuing higher studies, starting up a business, or acquiring a flourishing career. They can make their dream come true by investing intelligently in lucrative child plans that are available these days in the market.

Take a look in the life insurance Policy market. You would find dozens of policies available with various reputable insurance companies for children. There is a possibility that you might get stuck while deciding which insurance plan should you buy for securing your child’s future. We would discuss here mainly about two types of child plans that are available in market, the ULIPs plans and traditional plans.

Want to avail twin benefit or a fixed Assured sum at maturity

Many prospective policy holders are more inclined to invest in ULIPs. The ULIPs are more popular in market as they offer twin benefits. One is the benefit of life insurance and other is the benefit of mutual funds. In case of ULIPs, the Maturity benefits is not fixed or constant because of the high return and Risk potential of the equities. On the other hand, a traditional child policy guarantees a fixed sum at maturity. This is a major factor for deciding which plan is better for your child. Think about your preferences. If you want to avail dual benefits, choose a ULIP or if you want to benefit a fixed sum at maturity, opt for a traditional policy for your child.

Look at the long Term goals

The aim of life insurance policies is to provide life cover for long term duration. Along with that, the saving part aims to attain the financial goals of the policy holders. This is done either by creation of wealth or by providing regular income. So, it is you to decide whether you want wealth creation over the time or you want provision of regular income. ULIP plans are for wealth creation. And, on the other hand, traditional child plans aims at capital preservation or protection. So, if you think that wealth generation is more important and would help your child better, choose a ULIP plan. On the other hand, if you want a guaranteed sum after the completion of the term, opt for a traditional plan.

Identify your potential to take risk

It is important to note here that the prospective policy holder should check his/her capacity to take risk. This is going to help a lot when you are about to choose the best child plan for your kid. Know your own abilities and potentials to encounter risks that you may face with respect to investment. How can you determine your ability to endure risks? You can do this by analyzing your outstanding liabilities. For example, your outstanding liability could be your home loan or any other loan that needs to be repaid. You should also consider your definite financial works that you need to do in near future or any other expense that is supposed to be fulfilled. You should analyze all these factors to find out whether you are capable to take risk or not while you are investing in a child plan for his/her betterment.

Consider all the above quoted parameters before you jump to any conclusions on choosing the right child plan for your kid. Both ULIPs and traditional child plans have their own merits and demerits. It is all on you to decide which policy is best for your child. Invest plenty of time to explore more about different child plans. Take help of different resources to understand more about them. This is going to help you in making an informed decision.

Why to Buy a Child Plan

  • Easypolicy
  • 29 May 2014

Parents are not only committed but also feel responsible about providing the best education to their child. A good education gives a child the much needed foundation for building a successful career in his life.

However, life is uncertain and parents remain concerned whether or not their child’s education needs would be met in case of their unfortunate demise. Parents can be relieved of these concerns and live in peace of mind if they choose to buy child plan.

With a child insurance policy in hand parents are Assured that their family would have enough money to meet the education needs of their child. Child insurance is available in various formats and parents can choose the one that best suits to their needs. Most life insurance policies terminate upon the demise of the Insured but child insurance does not end there and the Policy continues to be in force. There are important benefits offered under a children’s plan and here we discuss a few reasons why you should not avoid buying one for your child.

1)  Death Benefit – Like in any other life insurance policy, in case of child plan too, the family of the deceased will receive a lump sum payment upon the demise of the insured person.

2)  Premium Waiver Most child insurance plans come with an option to purchase insurance Premium waiver rider. Under the premium waiver clause the insurance company will take the responsibility of future premium payments in case of the unfortunate demise of the insured.

3)  Maturity Benefit - Unlike most life insurance plans which terminate in case of the death of the insured, a child policy remains in force till maturity. So in case of an early demise of the insured the family of the deceased not only receives the Death Benefit but also eventually receives the Maturity benefit as per the policy terms.

4)  Option to stagger the maturity benefit payment at a predetermined time – Under a child policy the insured can choose to receive the maturity benefit in parts at different point in time.

The staggering option is important as it provides the insured necessary liquidity when it would be most required. Parents can choose to receive part of the maturity benefit when they expect their child to go for college education. With college education getting so expensive it may not be possible for many parents to meet the expenses out of their earnings. Payouts from the child insurance at this point in time will come handy.

5)  Investment discipline – With a child plan you get the discipline of regularly investing your savings towards meeting the future needs of your child.

How Child Plans Are Ruling The Markets Today

  • Easypolicy
  • 24 May 2014

Child plans have been in the markets for ages now, and with time, they have only gotten a lot more sophisticated than they were ever before, thanks to the constant demand and the wide acceptance of the instruments that are multi-faceted in their approach. So, if child insurance policy has started ruling the markets today, here are the reasons why:

Insurance companies and child plans: These are arguably the most important of the lost and the most widely prevalent, turning out to be the driving force behind their popularity in the market. Insurance companies have always come up with solutions that were geared to meet the changing needs of their markets, and the child insurance Policy is no exception.

But the factor that contributed heavily to the success of the instrument would be the vast networks of the insurance companies and the way they were able to spot the opportunity in catering to the growing demand of the sector. And with the surge in online child plans, and the ability of insurance organizations to cater to the increasingly internet-savvy population, this has become one of the hottest areas of growth indeed.

The unit-linked plans: Discussion on the success of the instruments cannot but include discussion on the popular format that has caught the imagination of the target market. Many of those who would want to ensure the security of their children’s future would certainly want to give unit-linked plans a good, hard look. This is one area where you could get good value for your investments in terms of insurance premium.

There are other advantages too in relation to the unit-linked child plans, apart from high returns – you could make good use of them with the flexibility they offer in terms of withdrawal, the high rates of returns and their rate of appreciation, benefits that would accompany the basic protection and ensuring the future of your kids.

Traditional plans as child insurance policies: This is one more trend that is fast catching up on the investment horizon. Traditionally known as money back plans, they gained popularity on account of their regular payouts – and investors could plan their future insurance Premium based on their expected paybacks over a period of time.
However, not many are aware of the fact that this successful and growing model could also be used in the child plan industry. The trick is to be able to tailor these plans in ways that would provide your child with regular payments during key milestones of life, while insuring them against the odds.

And for those of you who would want to get into the intricate details and go in for the ultimate sophistication, you may want to consider adding Riders to child insurance policy to make the most of their investments.