How having a life insurance policy for your minor child helps?

 

Human beings are a rational animal but most of our decisions about the family are emotional. Especially when it comes to our children, we become extra emotional.

Branded garments of the children are costly but you buy it, education boards are charging huge fees but you pay for it. You cut our budget but wish to give your child the best you can do.

This is the reason when your Insurance agent sells you life insurance policy for your children; you buy it without hesitation.

But the purpose of the Life Insurance policy is to give financial protection in the case of death of the policyholders. This is the reason life insurance policy is taken for the earning members of the family. When the earning member dies, the policy gets matured and the remaining family members use the money for their survival.

The life insurance policy in the name of a child matures in the event of the death of a child. While child protection plans protect child’s need in the event of the death of the policyholder parents.

Therefore rather than having a life insurance policy in the name of the children, the policy benefits should be in favour of the children.

Edelweiss Tokio has two such plans which protect the child’s needs.

1) Edelweiss Wealth Plus ULIP Plan with Rising Star Benefit

2) Edelweiss Tokio Life – Edu Save

Let’s examine the key features of both these plans in brief:

1) Edelweiss Wealth plus ULIP Plan with Rising Star Benefit

This is a unique ULIP plan. This plan not only protects the family but also builds wealth.

100% of your premium is invested in the fund of your choice. Over and above this under this plan, the company adds a fixed percentage of premium to the fund every year.

For example, for an annualised premium of Rs.1,00,000/- the company adds 1% i.e. 1,000/- per annum for the first five years. Thereafter for the next five years 3% of the annual premium, from 11 the year till 15th year 5% and in the last five years 7% of the annual premium.

This premium booster accelerates your wealth building.

This plan has an interesting raider which is known as Rising Star Benefit.

This rider benefits the children.

Key Points are:

• Any parent, grandparent or guardian with an insurable interest in a child can avail of this benefit.
• If the policyholder dies, a lump sum amount is paid immediately.
• An amount equal to the remaining annual installment is added to the fund value. If the policy tenure is 20 years, the annual premium is Rs.50,000/-, policyholder dies after the 10thyear, then the remaining 10 years premium of Rs.5,00,000/- is added to the fund value on the death.
• Premium Booster is also added as mentioned above.
• No future premium is required to be paid.
• The life cover will continue until the tenure ends or the death whichever is earlier.
• The maturity amount of fund value is paid at the time of maturity/death of the insured i.e. the child.

This way this policy protects your child future in case the parents die.

One time lump-sum payment can take care of his immediate fund requirements. The future maturity benefits can take care of his higher education and other such needs.

This is how you can protect your child.