Sunrays Policy

The worry that tops the list for a parent is, “how to meet the rising cost of education?” You start saving for your children quite early. You plan and save to be able to deal with the costs of higher education or to make their life financially secure till the time they become independent. A child insurance plan is an important step in the direction. Child plans are designed in a manner that you are able to provide financial support to the child at crucial stages in their life.

Maturity of child plans generally coincides with specific stage in the life of a child like going for a professional course or higher education, stepping into a new career or marriage. These stages are typical at the age of 18 years, 21 years or 24 years. For you, these are occasions when you might need extra funds to manage the situation comfortably. So, planning for child insurance also gives you a peep into your own future financial requirements over the time as the child grows. Buying a child plan is an important decision where you need to consider a lot of factors.

Consider before you buy:

• PAYER BENEFIT AND WAIVER OF PREMIUM - Premium waiver in a child plan implies that if the parent does not survive the policy term, all future premiums will be waived off and the policy will still remain in force. The child will get all the maturity benefits as planned. Many companies have Premium Waiver inbuilt in the child insurance policy, whereas others offer it as riders. It is always better to include payer benefit or premium waiver in the child insurance policy.

• ALLOCATION CHARGE - Allocation charge is the amount deducted by the insurance company from the premium before investing in various funds. It varies as per the type of fund, maximum being for equity funds, and minimum for debt funds. It reduces with the risk involved. Allocation charges may be negligible in traditional plans but more prominent in ULIPS.

• RIDERS AVAILABLE - To ensure that the child plan does not lapse in case the payer does not survive the policy term, there are certain riders available with it. The most important child plan riders are payer benefit and waiver of premium. Other riders are dreaded diseases or personal accident benefit. Depending upon the insurance company and the insurance policy, these can be inbuilt, optional, or not available. It is important to select the riders carefully.

• GUARANTEED BENEFIT - Guaranteed benefit is a percentage of sum assured that is guaranteed by the insurance company in addition to the maturity amount. This assured amount is given to the policyholder for the number of years the premium has been paid. It is payable at the maturity date along with the maturity amount.

• LOYALTY ADDITION - Loyalty addition is an additional amount declared from time to time. It is a percentage of the sum assured and is in addition to the guaranteed benefit. It largely depends upon the performance of the insurance company. It is calculated on the number of years that the premium has been paid for. The percentage of additions varies every year.

Basics of Investment Insurance Plans

We need our investment funds to not only grow as well as to be secure too. We need enough cash to be available to our family to dodge a financial crisis, even in our nonappearance. Investment connected plans consolidate the advantages of Investment and Term-Life Insurance.

A part of the premium that you pay for an investment connected insurance plan is utilized to give insurance protection and the rest is invested where the cash grows. We can arrange these investments such that their maturity dates coincide with crucial and important occasions e.g. children’s higher education, marriage fund, retirement fund and so forth. These plans can be traditional where the returns are ensured or ULIPS where the investment part of the premium is invested in funds of your choice.

Must know for investment plans:

MAXIMUM MATURITY AGE - Maximum maturity age is the age up to which you can put resources into a policy. In most conventional plans it will be settled in light of the policy duration and your age at the time of taking the policy. In a ULIP, you have the adaptability to pick an investment period although maximum maturity date is still fixed.

• PREMIUM PAYING TERM - It is the term for which you pay the premium. For specific plans it is the entire tenure of the policy, for a few, it is an altered term like 5 years, 7years, 10 years and so forth. A few plans, for the most part the ULIPS are more flexible. Premium paying term varies in light of particular policy and also if it is a customary policy or a ULIP plan.

 

• GUARANTEED ADDITION - Guaranteed addition is a rate of aggregate guaranteed ensured by the insurance company in addition to the maturity amount. This guaranteed sum is given to the policyholder as indicated by the number of years the premium has been paid for. It is payable at the maturity date alongside the maturity sum. It is pertinent to the conventional plans only.

• RISK COVER -Risk cover is the amount guaranteed or the demise advantage i.e. the sum for which you have been insured. This sum is payable only to the nominee in the event of death of the insured individual.

• MATURITY BENEFIT -Maturity benefit is the survival advantage or the maturity sum that one gets in the wake of finishing the duration of protection. Maturity benefit incorporates the ensured sum, guaranteed additions and bonus (non Guaranteed).

Basics of Investment Insurance Plans

The basic fundamentals of life insurance and pension are different. Where Term-Life insurance covers the risk in case of the death of the earning member, a pension plan is taken to ensure that after a certain age, you can provide for yourself. Yet most pension plans combine the benefits of insurance and pension. Any pension plan has two phases;first is the accumulation phase when you pay towards your annuity. Second is annuitization phase, where you receive regular payments from your annuity that you have created over the time. Looking into your future, you will have to take certain decisions now to get the right pension plan.

Must know for investment plans:

MAXIMUM MATURITY AGE - Maximum maturity age is the age up to which you can remain invested in a policy. In most traditional plans it will be fixed based on the policy duration and your age at the time of taking the policy. In a ULIP, you have the flexibility to choose an investment period although maximum maturity date is still fixed.

• PREMIUM PAYING TERM - It is the duration for which you choose to pay the premium. For certain plans it is the whole tenure of the policy, for some, it is a fixed term like 5 years, 7years, 10 years etc. Some plans, generally the ULIPS are more flexible. Premium paying term varies based on particular policy and also if it is a traditional policy or a ULIP plan.

 

• GUARANTEED ADDITION - Guaranteed addition is a percentage of sum assured guaranteed by the insurance company in addition to the maturity amount. This assured amount is given to the policyholder according to the number of years the premium has been paid for. It is payable at the maturity date along with the maturity amount. It is applicable to the traditional plans only.

• RISK COVER - Risk cover is the sum assured or the death benefit i.e. the amount for which you have been insured. This amount is payable only to the nominee in case of death of the insured person.

• MATURITY BENEFIT - Maturity benefit is the survival benefit or the maturity amount that one gets after completing the duration of insurance. Maturity benefit includes the guaranteed amount, guaranteed additions and bonus (non Guaranteed)