Child Insurance In India

Presented By Abhishek Agrawal(1) Ajay Singh(59) Rupesh Tiwari(83) Shivam Dwivedi(92) Vinay Gupta(118)

Fortune Institute of International Business, New Delhi

 Protection plan  Child plan  ULIP’s  Retirement plan

Fortune Institute of International Business, New Delhi

Indian Insurance sector touted to record a 18% growth.  According to K N Bhandari, the Secretary General of General Insurance Council, India's general insurance sector is slated to grow at a 18% rate in 2008. The comparable figure for 2007 was 13%. The present market value of the Indian general insurance sector is Rs 30,000-crore. The current penetration level of the Indian insurance sector is 0.65 %.  The Indian urban sector is a significant contributor to the general insurance market. In comparison, contribution from rural India is small. Efforts are afoot to capture the dormant rural market via strategies like awareness generation, institutional marketing and e-marketing. 

Fortune Institute of International Business, New Delhi

Child plan is a plan which enables a parent or a legal guardian or a relative of the child to provide a sum for the child by way of a very low premium.

The policy is in two stages:• Covering the period from the date of commencement of the policy to the deferred date. • Covering the period from the deferred date to the date on which the policy emerges as a claim either by death or on maturity. Fortune Institute of International Business, New Delhi

Why Child Insurance Planning does not necessarily mean about what you wish your child would grow up to be, or have certain characteristics, but it also essentially means you as a responsible parent having various obligations to fulfill that would help him to grow better in this world.  To provide good Education (Graduation as well as Post Graduate)  Secures the child’s future in case of any unfortunate event.  Marriage  Seed capital for business

Fortune Institute of International Business, New Delhi

Child plans come in two broad variants Traditional plan  ULIP’S 

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Traditional child plans:- Traditional plans invest a major portion of their money in debt instruments like corporate bonds and government securities (as specified by the regulator). It carries relatively lower risk since it is invested mainly in corporate bonds and government securities. The bonuses are stable and give the parent considerable comfort knowing roughly how much he can expect. Regular endowment plans are suited for parents with a low risk appetite.

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Unit Linked insurance plans (ULIPs):- ULIPs can invest across equity and debt markets in varying proportions. Parents with some risk appetite can opt for a ULIP child plan that invests across equity and debt markets. The reason why ULIP child plans can prove to be significant is because over the long-term (15-20 years), equities can add considerably to the corpus you plan to build for your child's needs. Equities are best placed to beat inflation over the long term. However, to achieve this, one must invest wisely

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Need returns on regular intervals to fulfill various obligation like Child Education, Tuition, Admission Fees, Coaching Classes (Money back Guaranteed Plans)

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Need returns for my child's education and marriage (periodic non guaranteed and one time maturity benefit) (Money back Plans with non guaranteed returns).

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Need one lump-sum money for my child's higher education or marriage (Endowment Guaranteed Plans)

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Need one lump-sum money for my child's higher education or marriage with lesser rate of growth(Endowment Plans with non guaranteed returns)

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Need guaranteed money- no market risk -lesser rate of growth (6%-10%) (Guaranteed Returns Plans) I need higher rate of growth. (10%-20%) - higher market risk involved. (ULIP-Based Plans)

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Adequate Sum required for his Higher Education Cost.  Rider Benefits like Health Insurance, Accident cover.  Competitive Pricing and Returns.  Administrative Costs.  Assured amount for Children in case of Parents Death.  Claim History of the company you are purchasing insurance from 

Fortune Institute of International Business, New Delhi

AEGON Religare Star Child Plan  Bajaj Allianz Child Gain Funds for critical stages in your child’s life like, 

• Graduation • Post Graduation • Marriage • Start a business Birla Sun Life Insurance Children's Dream Plan

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How does the plan work? Step 1: Decide on the amount of premium you wish to pay every year Step 2: Choose the amount of insurance cover you want (Sum Assured) Step 3: Decide on the policy term and premium pay term of your policy Step 4: Invest your premium in choicest of 4 Funds OR a unique ‘Invest Protect’ option Fortune Institute of International Business, New Delhi

If you opt for Invest Protect option, it will not only help you gain from your investment but also minimize the risk to your returns as your policy nears maturity. It aims to protect your money by systematically shifting the Fund from Enhanced Equity Fund to Secure Fund during the last 3 policy years.

Fortune Institute of International Business, New Delhi

If you don’t wish to opt for ‘Invest Protect’, you have the option to invest your premiums in any one or more of the following 4 funds

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Other Features and Benefits 

Auto-rebalancing At the end of every policy year, this feature automatically rebalances the allocation of your investments in various funds to the original proportions you had chosen.

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Special Units You will earn additional special units if your policy term is 15 years or more. The special units will be added to your account at the end of 10th year and every 3rd year thereafter. The value of special unit would be equal to 1.50% of the average fund value of the last 36 months before the allotment of special units.

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Premium Re-direction Premium Re-direction feature allows you to alter the premium allocation made by you in different funds. Fortune Institute of International Business, New Delhi

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Switch :- This feature helps you shift your investments from one fund to another. Four switches are free in a policy year.

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Maturity:- On maturity, you receive the fund value existing on

maturity. If you do not wish to take the entire maturity amount at one go, you can avail of the Settlement Option.

Settlement Option

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Under this option, you or the nominee after death of the Life Assured, receive maturity proceeds in installments over a period you choose (not exceeding 5 years). Investment risk during the settlement period is borne by you. Surrender :-You can surrender the policy anytime after the first 3 policy years. Surrender value is fund value minus the surrender charges. The charges will depend up on the period for which you have paid your premiums. The policy can not be surrendered after death of the Life Assured. Fortune Institute of International Business, New Delhi

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Death :-In case of your unfortunate demise during the term of the policy, the nominee will receive the Sum Assured. On payment of Sum Assured, the units in the policy account remains invested but, the base cover and other covers under all riders attached with the policy will stop. However, all future premiums due after death of the assured parent, will be waived and paid by the Company into the policy unit account on their respective due dates. For polices lapsed in first 3 years, the death benefit will be the fund value. In case of child’s or nominee’s death: If the child or nominee die after the assured parent’s death, the policy continues and the future premiums will be paid by the Company.

Tax Benefits :- Section 80C, 10 (10D) of the Income Tax Act, 1961 would apply. Premiums paid for AEGON Religare CI Rider may qualify for a deduction under Section 80D of the Income Tax Act, 1961. Consult your tax advisor for confirmation.

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Common features in the 4 Options of Bajaj Allianz ‘Child Gain’ Plan  

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Limited Premium Payment Term which means that the premiums are payable till your child attains age 18 years. Your contributions grow by the way of compounded annual bonuses, which will be paid to you with the first guaranteed payout (policy anniversary following age 18 of your child), for inforce policies. In addition to the annual bonuses, a terminal bonus may also be paid. You are eligible for Tax Benefits under Section 80C and Section 10(10)D of the Income Tax Act. Assuring Your Child’s Future: In an uncertain world, the prime interest of your child cannot be jeopardized in any way. Which is why we have built in some added benefits in all our plans to protect the interests of your child’s future, by counter insuring you - the policyholder. Fortune Institute of International Business, New Delhi

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Premium Waiver Benefit: In case of death or accidental total permanent disability of the policyholder during the premium payment term, all future premium payments are waived. This benefit will not be available in the event of accidental permanent total disability after age 65 of the policyholder. Family Income Benefit: In case of death or accidental total permanent disability of the policyholder during the term of the policy, a monthly income benefit of 1% of the sum assured (12% per annum) subject to a maximum of Rs.10,000 p.m. becomes payable till the end of the policy term. This benefit will not be available in the event of accidental permanent total disability after age 65 of the policyholder. Option to Purchase further Insurance at Maturity: For ensuring continuity of the valuable insurance protection that the child was enjoying, we offer the child an option to purchase a with profits endowment or an equivalent plan from Bajaj Allianz Life Insurance Company for twice the amount of face value of this policy, without any medical examination, on the premium rates prevailing at that time (The application must be made at least 6 months prior to maturity of this policy).

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We offer you the choice of surrendering the policy provided three full years premiums have been paid (Two years for premium payment terms of 5 and 6 years). The guaranteed minimum surrender value is 30% of all premiums paid excluding the first year premium and excluding the premiums for Premium Waiver Benefit and Family Income Benefit and Additional Rider Benefit if opted for. The guaranteed minimum surrender value after the premium payment term will be the discounted value of the outstanding installment payments discounted at 10% p.a. rate of interest.

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Boost your child’s career With our unique Guaranteed Maturity Options of 100%, 200% and 300%, you could provide your child the start-up capital that may be required to launch a career. Boost your child's career and watch him/her sail ahead in life. The table below illustrates the benefit.

 Benefit We realize that you would like your child's dreams to be fulfilled, even in your absence. The BSLI Children's Dream Plan would keep your policy alive, take care of all your premiums till maturity, and provide all benefits, in case you are no longer there.

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 Partial Withdrawals: After the completion of 3 policy years, you are free to make partial withdrawal at any time. The minimum amount permitted for a partial withdrawal is Rs. 5,000 and the maximum is the excess of the fund value over the Guaranteed Fund Value.  Surrender: You have the freedom to surrender your policy at any time during the term of the policy. After 3 years of completion of your policy, no charges are collected for surrendering the policy.  Additional Protection: You have an option to increase the Sum Assured at any point in time, to provide higher protection to your child.

Fortune Institute of International Business, New Delhi

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