Benefits

• High insurance cover at lower costs
• Financial security against loans and mortgages
• Additional rider benefits like critical illness, accidental death/ disability
• Rewards you for healthy lifestyle with lower premium rates for non-tobacco users
• Option to pay premiums single, annually, half-yearly, quarterly or monthly for regular & limited premium paying term policy

Key Features

While buying a term insurance plan, the buyer must evaluate the following features:

• Claim Settlement Ratio
  The insurer’s claim settlement ratio provides a clear picture of the insurance provider to the prospect policy buyers. The ratio of claim settlement is released by the Insurance Regulatory and Development Authority (IRDA) India every year. A claim settlement ratio that is consistently good indicates that the insurance provider has been quick and robust in its claim settlement process
• Solvency Ratio
  The solvency ratio is something that tells whether the insurance provider chosen will be capable financially for settling the claims if the requirement arises. As per IRDA, every life insurance provider should maintain a solvency ratio of 1.5 at least.
• Enhanced Cover
  Some insurance companies offer the option of enhanced cover in the term insurance policy. In this option, the policyholders can enhance the coverage of the policy under particular circumstances or critical situations.
• Riders
  While purchasing a term plan, it is important to check the rider benefits offered by the insurance company such as terminal illness, critical illness etc. An insurance rider is extra to the essential plan that offers advantages far beyond the subject of the policy in case of any eventuality
• Premium
  The premium rate of a term insurance plan plays a vital role while purchasing the plan. Hence it is important to compare term insurance policies online and choose the term plan which offers higher coverage at an affordable premium rate. Additionally, choose a company that provides discounted premiums to non-smokers

Premium

Below are some of the key factors that affect the premium of a term insurance policy:

• Age
• Gender
• Policy Term
• Profession
• Health
• Medical History
• Smoking/ Drinking Habitsc

Features and Benefits

• Education Corpus A child plan helps you to build a corpus for your child and save enough for his/her future. With timely premium payments, the lump sum amount helps the child meet later educational expenses without any stress or financial burden.
  A child's education plan is enough to pay for higher education, even in a foreign country. The corpus depends on the terms and conditions of the plan and on the amount invested through premiums.
• Kitty for Medical Treatment of the Child Child plans also allow the option of withdrawing money during the tenure of the child investment plans. This can be used for the medical treatment of the child if he or she falls ill. Such partial withdrawals can come in handy when the child is hospitalized due to an ailment, a minor accident, or a serious medical condition. The best child plan helps to reduce the financial burden caused by medical expenditure and such payouts act as an add-on for one's health insurance plan
• Waiver of Premium The consequences of a parent’s death can be severely damaging for the child’s future. The insurance company offers a premium waiver if the parent (i.e., the insured) passes away during the policy term of a child education plan.The premium waiver benefit often comes inbuilt with the best child education plans and if not, then is available as a rider. The child receives a lump sum amount promised at the time of purchasing the best child plan and does not have to pay the balanced premium
• Income Protection Some child savings plans provide regular income to children, which is equal to 1% of the sum assured if parents are not around to pay the premiums.
• Collateral for Higher Education Loans A Child plan comes in handy if one intends to secure a loan for higher education as they can be used as collaterals. They can be used as collateral for other child-related borrowings as well.
• Partial Withdrawal You can access your funds during the term in the form of partial withdrawals, subject to conditions. This takes care of your child’s different educational milestones
• Tax Benefits A children education plan helps you save tax. You are not only eligible for annual deduction from your total income of upto Rs 1.5 lakhs under Section 80C of the Income-tax Act, 1961, for premiums paid for child plans but you also benefit from tax free maturity proceeds under Section 10(10D) of the Income-tax Act, 1961, subject to fulfilment of the terms and conditions stated therein

Types

There are following types of child plans available:

1. ULIP plan: This plan offers market-linked returns on investment. A part of the investment goes towards securing the child’s future and the other part is invested in a mix of equity and debt. Along with saving for your child’s future, you have the potential of benefitting from market-linked returns.
2. Savings plan: If you want to save for your child’s future without any market exposure, you can opt for a savings plan. It combines life cover, maturity benefits, along with providing you tax benefits.
3. Single-premium plan: Instead of annual premium payment or multiple payments a year, parents could opt for a single premium plan, which gives them the same benefits. One no longer has to worry about setting aside money or remembering to pay the premium every time

Exclusions

Child insurance plans do not cover the following eventualities:

• Bike Model and Variant
• Year of Manufacture/ IDV (Insured Declared Value)
• Fuel type (Petrol / Diesel / CNG / LPG)
• CC (Cubic Capacity of Engine)
• Registration Zone
• NCB (No Claim Bonus)
• Additional Covers like Zero Depreciation, Key Loss etc

Exclusions: What is Not Covered

• Drug or Alcohol Abuse In case the policyholder dies due to drug overdose or alcohol abuse, the nominee does not receive any benefit.
• Self Harm or Suicide The nominated beneficiary does not receive any claim amount in case of the death due to suicide within one year of buying the child policy.
• Adventure Sports In case the insured happens to take part in any adventurous or risky sports like skydiving, rock-climbing, racing, etc. that leads to death, the insurance provider does not entertain claims.
• Criminal Activities Any criminal or illegal act or act of war leading to the demise is also not covered under a child plan.

Documents

The standard set of documents required for starting an insurance plan for your children are:

• Proof of address: Any document from a passport, driving license, Aadhar card will work.
• Policy form: This form will contain all details of the plan and the terms you opt for.
• Income proof: Parents who plan to buy an insurance policy for their children need to show the source of income for paying the premiums like salary certificate.
• Identity proof: The commonly used identity proofs in India include PAN card, aadhar card, driving license, voter ID, etc.
• Proof of age: You could submit your passport copy, birth certificate or your education marksheets.

Benefits

Some of the key benefits of these plans are as follows:

• No Investment Cap When there are investment caps upon POMIS and Senior Citizens Savings Scheme there is no such investment cap when it comes to an annuity.
• No Risk of Reinvestment Probably the greatest favourable position that annuities offer is that they dispose of reinvestment chances. Since in India we are moving towards lower financing costs, the hazard is that when you go to reinvest the head, you may get a lower pace of premium. Momentary instruments like the Post Office Monthly Income Scheme (POMIS) convey reinvestment chances. In any case, when you put resources into an annuity, you are ensured a similar pace of payout forever.
• Safety An annuity gives you the affirmation that you will keep on accepting cash every month for a mind-blowing remainder. The insurance agency assumes the danger of making sense of how to bring in the cash keep going as long as you live so you don't need to stress over it. Pick your installment recurrence. You may decide to get your fixed payouts at stretches that suit you best - month to month, quarterly, half-yearly or yearly.

Types

There are following types of annuity plans:

• Immediate Annuity An Immediate annuity is a contract that is purchased with a single lump-sum payment and in exchange, pays a guaranteed income that starts almost immediately. An immediate payment annuity is especially suitable for retirees who are concerned about outliving their savings.
• Deferred Annuity Deferred annuity is a contract which allows you to save a regular amount of money for your retirement. This type of annuity has two main phases, the savings phase (accumulation phase) in which you invest money into the account, and the income phase (payout pase) in which the plan is converted into an regular annuity and payments are received.
• Periodic Annuity
  Well periodic annuity essentially provides the funds to the annuitant at the regular point in time. This is more similar to the system of a pension plan wherein the intervals could be based on every month. Besides, the payments could also be done in a phased manner from time to time towards the end of 5th, 10th and 15th years even though payments of the premiums have been earlier done or not.
• Lump Sum Annuity
  Some annuity plans give the alternative of giving a single amount payout. Such a singular amount payout is normally discretionary and accessible after a specific period. In any case, by and large, the whole retirement advantage can't be gotten as a single amount.
• Variable Annuity
  The variable annuity plan includes varieties in the annuity payments between one payout and the following. This variety is in significant part connected to the market execution of the speculations made by the benefits store or annuity plan that the individual has put resources into.
• Variable Annuity
  The variable annuity plan includes varieties in the annuity payments between one payout and the following. This variety is in significant part connected to the market execution of the speculations made by the benefits store or annuity plan that the individual has put resources into.
• Fixed Annuity
  In a fixed annuity plan, the payments will stay consistent over the whole time frame during which the payments happen. A fixed annuity is ideal for a risk averse person because this framework ensures regular payment to the person during retirement.

Eligibility Criteria

• Minimum and Maximum Entry Age
  For most pension plans, the minimum age of entry is generally 30 while the maximum entry age is 75.
• Minimum and Maximum Vesting Age
  In most cases, the minimum vesting age is 45 years while the maximum age is 80 years.
• Policy Term
  Depending on the chosen pension plans the policy term generally ranges from 10 years to 30 years.
• Annual Premium Amount:
  There is no maximum limit, and the minimum annual premium amount is close to ₹ 50,000/- in most cases.
• Premium Payment Term:
  Generally, the premium has to be paid for the same period as that of the chosen policy term

Benefits

Some of the key benefits of these plans are as follows:

• Death as well as Survival benefits In case of demise of the insured, the beneficiary/nominee of the policy gets the sum assured along with bonuses. Also, the insured is allowed to get the sum assured if he/she outlives the policy.
• Higher returns: An endowment policy is helpful in building a corpus for future and providing financial protection to your family. The payout for survival benefit and death benefit of an endowment plan is higher than that of a pure LIFE INSURANCE POLICY i.e. Term Plans.
• Premium payment frequency: The policyholder can make payment of the premium based on the policy chosen by him/her. Payment can be done on monthly, quarterly, half-yearly, and on yearly basis.
• Tax Benefits: The policyholder is entitled to get tax exemption on both premium payments, maturity and final payouts under the Section 80C and Section 10(10D) of the Income Tax Act, 1961.
• Low Risk: Traditional Endowment policies are considered safer as compared to the other investment option such as the Mutual Fund or the ULIP’s because the amount here is not directly invested in equity funds or the stock market

Types

There are following types of Endowment plans:

• Unit Linked Endowment Plan: Under Unit Linked policies, the insurance premiums are bifurcated into multiple units held under a specific investment fund which can be chosen by the policyholders.
• Full /With Profit Endowment Under this plan, the basic amount i.e. sum assured will be provided to the policy holder. This amount is guaranteed right from the start of the policy. However, the final payout provided is comparatively higher depending on the bonuses announced from time to time by the company. The bonuses once declared form a part of the policy are paid out in the event of death of the policyholder or maturity of the policy.
• Low-Cost Endowment
  This type of endowment plan was designed with an intention of allowing the policyholder to accumulate the funds which have to be paid after a specified time period, usually mortgage.
• Non-profit Endowment
  These are endowment plans which do not participate in the profits generated by the company (bonuses). However, in order to make them competitive against other products, companies offer guaranteed additions in these plans which help in generating returns for the policy holder.

Add-On Covers

• Minimum and Maximum Entry Age
  For most pension plans, the minimum age of entry is generally 30 while the maximum entry age is 75.
• Minimum and Maximum Vesting Age
  In most cases, the minimum vesting age is 45 years while the maximum age is 80 years.
• Policy Term
  Depending on the chosen pension plans the policy term generally ranges from 10 years to 30 years.
• Annual Premium Amount:
  There is no maximum limit, and the minimum annual premium amount is close to ₹ 50,000/- in most cases.
• Premium Payment Term:
  Generally, the premium has to be paid for the same period as that of the chosen policy term