“Better late than never” suits perfectly for policies on
children. Child policies have an entry age limit of 13 – 14 yrs based on
company or policy. Child policies are targeted at providing funds for the
higher education or marriage needs of the child. Life Insurance Corporation of
India was the only insurance company till the year 2000, before the Indian
government had opened insurance market for private players. This move has
revolutionized the insurance industry, leading to the creation of customized
child insurance products based on customer specific needs. FDI has opened the
gates for innovation in insurance products which were successful in western
countries. Most of the western world’s players had entered the local Indian
market in collaboration with local players. These players introduced new
products in the Indian insurance market.
a standard format of paying premium for their products in tranches for 15+
years and the policy holder used to receive the lump sum maturity amount only
at the time of policy maturity. These products have only life cover as their
default feature. This structure has changed with the entry of private players.
2 products in its portfolio customized for child’s future needs. Jeevan Tarun
and New Children Money Back plan are children specific plans with different
premium payment periods and maturity periods. Jeevan Tarun has four different
sub-options with in it and has a 5 year reduced premium payment term. In New
Children Money Back policy, premium needs to be paid till the maturity period.
Purchasing child policies at an earlier stage would help in accumulating a
larger chunk of money with minimal spend from your budget every month.
insurance has a value added, unique feature called the Premium waiver Benefit
rider. This rider would be optional and can be opted by paying some additional
premium in some of the products and it would be available by default in some of
the policies. This rider would waive off the future premiums to be paid for the
policy, in case the proposer (parent) expires before the policy gets matured.
This would not be applicable to the other parent if the other parent is not the
Jeevan Tarun and New Children money back policy will provide financial security
to children in case of parent’s death. The financial benefits will be provided
when the children complete their 18th age. These benefits will be
provided at regular intervals till they complete 25 years, so that their higher
education and marriage needs are fulfilled. Considering the merits of child
policies, these have an edge over the bank deposits, as these child insurance
products provide almost equal returns compared to other investments and also
provide secured career to the child even if the parent expires.