Most of the life insurance companies are offering child insurance plans – Children plans which secures the child’s financial security. This is seen by them as a big segment to tap since kids holds emotional attachment.
The skeleton of the plan is, the proposer(Father or Mother) invests on behalf of the child for a certain agreed period and waits till the policy term. During the waiting period the invested amount will grow based on the underlying asset and the accumulated corpus would fund for the child’s education or other financial needs.
The main and important feature of these plans are built-in WOP( Waiver of Premium) rider. This rider will come in to force in case of the death of the proposer.
If policy is in force, the company will pay all the future premiums on behalf of the proposer and the child will get all the benefits as if the proposer is alive.
Maturity proceeds can be received in lump sum or over periods towards end. Most companies pay 25% of sum assured equally for four years. As a proposer, the person who pays the premium ( Father/Mother ) can claim tax benefit.
The plans are available both in ULIP and Traditional versions.