It would be reasonably acknowledged that one cannot hope to undermine that significance of a child insurance plan. In the modern days, it is important to note, child insurance plans have become very popular.
The popularity of the child plans may be attributed to the fact that they provide for children’s future even in the absence of their guardians. Child insurance plans strictly ensure that the plan continues even after the parent’s demise. It should be noted that subsequent benefits continue to accrue so that these may be used up to the fullest so far as the welfare of the child is concerned.
An example should be able to underscore the advantage of a child insurance plan. If someone with a child aged five years old purchases twenty-year child plan, the provisions in the policy promise consequent returns, say, at the fifteenth or the seventeenth anniversary of the concerned insurance policy.
The concerned parent would have planned the respective returns in a way so as to be able to provide for the educational needs of the child. Therefore, the funds of the concerned insurance policy will then used for the purpose of higher education.
A very weighty merit of the child plan is that it is not terminated upon the decease of the concerned insurer. Future premiums will be duly shelled out by the insurance company. So far as the returns are concerned, they will accordingly be shelled out as and when promised. Therefore, in this manner, it is quite tangible that the money would be used solely for the welfare of the child concerned.
ICICI Child Plans: ICICI Prudential Life Child Plans
ICICI Prudential Life Insurance Company is, in essence, a combined undertaking between the ICICI Bank Limited and Prudential Private Limited Company.
So far as child insurance plans are concerned, it would be helpful to take a look at the ICICI PruAssure Smart Kid Plan. It is important to note that this is essentially a child education plan. It consists of the following features:
First and foremost, it is a unit related plan. It offers two portfolio strategies. The two investment strategies include fixed strategy portfolio and lifecycle-based strategy portfolio.
In the lifecycle-based portfolio plan, it is important to note that the amount of the premium would be distributed between two funds. The funds include the multi-cap growth fund and the income fund. The said funds are based on the age of the concerned policyholder. The money will be transferred from the multi-cap growth fund toward the income fund in accordance with the increasing age of the policyholder. In later future, at the time of the maturity of the policy, the entire majority of the fund invested will be located in the income fund. It is important to note that the income fund, relatively speaking, is less risky.
In the fixed portfolio strategy, the corporation proposes six funds. The policyholder would have to select among these funds as per his or her risk-taking capacity. The six funds are multi-cap growth fund,multi-cap balanced fund opportunities fund, income fund, blue-chip fund, and market money fund.
Apart from the aforementioned features of the insurance policy, there is an added feature known as the Automatic Transfer Strategy. The feature is under the fixed portfolio strategy. According to this feature, the concerned insurer may invest all or a part of his premium in the money market fund and from there a particular amount may be automatically transferred to the blue-chip fund, or any other of the six aforementioned funds according to the policyholder’s choice.
As soon as the policy matures, it is important to note, the available value of the respective fund is payable to the policyholder.
In case of the decease of the insured, it is important to note, the basic sum assured is paid. However, the amount is subject to at least 105% of all the premiums shelled out till the date of decease.
Apart from these, there is an added choice of totaling the income benefit rider. In this case, when the insured dies, 10% of the rider sum assured will be shelled out to the concerned beneficiary annually till the concerned plan reaches the date of maturity.
Disability benefit rider and accidental death are also offered in the policy plan. Both promise additional payment in respective cases.
The insurance plan also offers something known as guaranteed additions. It is important to note that the guaranteed additions will be added to the total fund value at the end of a period of fifteen years.
So far as the sum assured is concerned, it can be increased or decreased. However, terms and respective conditions duly apply.
Switching between funds is allowable only under the fixed portfolio strategy.
Once every year, it is useful to note, a swap in the strategy of the portfolio is allowed.
How Does A Child Plan Help A Child?
Needless to say, a child is an essential beneficiary of any child plan. Generally speaking, a child plan helps to bear the cost of a child’s education, marriage, even in cases where he or she would like to pursue start-ups. If in case the parent dies, the child plan ensures that the child is still considerably financially shielded so as to carry out the basic duties. In short, till the child becomes financially independent, the child plan is of immense help in every way.
How Does A Child Plan Help A Parent?
So far as the parent is concerned, he or she shells out the premiums accordingly. Once they are paid, the funds begin to build up. As a result, the parent’s financial burdens are considerably eased. In cases of admitting one’s child to a school, a child plan is of great help. It ensures the parent can admit his ward to a good school, given the highly costly education sector nowadays.