Category Archives: Life Insurance

Insurance, Life Insurance

Child Plans: Myths vs Reality

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Seeing a child makes you smile instantly. A little child surely brightens up everything around.

If you are a parent or will be in the future, you want the best prospects for your child. Caring and nurturing of a child is an overwhelming experience however, it does involve expenses.

Given the current economic conditions, thinking about the expenses part is considerable. Moreover, if you are not with your child tomorrow have you ever thought who will take care of the finances? How are you going to secure the future of your child?

The big question is what would happen if you face premature death.

Bringing In the Corpus

Ensuring financial security for the child the best tool is buying child insurance plan. Child policy will bring in the adequate corpus at every milestone for your child so that he is capable enough to fulfill his dreams.

If you are still pondering why would you need a child insurance policy? Look below at some questions and thereafter you are the best judge.

  • How will my child get the best of education?
  • How will my child manage tomorrow when I am not around tomorrow?
  • Do I have enough money in my bank account to manage the expenses of my child?

Well, surely you have your answer.

Buying a Child Policy

The intent of buying a child policy is to provide a safety net to your child in case of any financial emergencies.

Let us have a glance at some advantages to having a child policy as follows:

  • It is a big financial crutch for your child’ future wherein your child is safeguarded with payouts and maturity benefits.
  • Your child’s education is of prime importance. Child policy is ideal for taking care of the expenses in terms of education or any other financial liability such as a marriage, etc.
  • In case of the demise of the parent during the tenure of the policy period the child will receive a lump sum payout as death benefit on maturity and child policy also provides with doing away with the obligation of premium.
  • Sometimes, a child policy also acts as a protector of the income for your child if your child starts earning at a young age.
  • Child policy is also used as surety for higher education loans in the future.

Too Much On the Plate

With a plethora of insurance companies in the market, there is a bunch of investment products being offered. Due to this, it sometimes becomes a tedious task for a parent to decide which child policy to go for. Of course, there are certain misconceptions, which lead to confusion leaving the parent in a state of the dilemma of which child policy to invest.

Let us some myths surrounding child policy so that you can go ahead and make an informed decision.

Debunking Myths around Child Policy

Take a glance at the real pictures behind the myths:

Myth 1- Child Policy covers the child’s life.

Reality- The most common myth around child policy is that buying a child policy insures the life of the child. A majority population is unaware of the truth that it is the life of the income-earning parent is secured. The benefit a child policy brings in is that even if a parent is not around the dreams of the child will be fulfilled.

Myth 2- Upon the death of the insured parent the death benefit of a child policy is paid out as a lump sum and does not take care of the needs of the child in the future.

Reality The Child policy has a component called Family Income advantage wherein payments are made intermittently to the family with the goal that the child’s educational needs are dealt with. Also, if the policy offers the advantage of financing premium wherein the future premiums are borne until development by the safety net provider and the development advantage is paid to the beneficiary. It is to take note of that these advantages are added to the singular amount that is paid out upon the demise of the safeguarded.

Myth 3- Child Policy is not pellucid enough.

Reality- In a market-linked child policy, all charges are clearly described. The child policy document gives you the complete and detailed break-up of the charges and you exactly know of where the amount has been invested. Just to keep a regular check you also receive the statement of your holdings.

Myth 4– Investing in a child policy gets your money blocked for an entire term of the policy and you cannot withdraw the money in case of any emergency.

Reality- A child policy is always flexible enough. Moreover, if you opt for a market-linked plan it does give you the benefit of withdrawing the amount partially on the context of emergencies post the completion of certain years. The duration may vary from on insurance providers to the other.

Myth 5– Under a child policy, the payments are made only for the higher studies of the child.

Reality- At the point when the plan’s advantages are paid, they should not be just for the child’s advanced education. It is totally up to your attentiveness on how you need to utilize the assets toward the day’s end. On the off chance that your child decides not to seek after further studies or you might want to utilize the assets to satisfy some other responsibility, you can do so regardless of the first objective that it was planned for.

Get the best Child Insurance Policy

  • LIC Jeevan Ankur

The Bottom Line

It is great to build a fund towards the fate of your child. It is imperative to begin as ahead of schedule as would be prudent. The early you start the better return you will get in the long haul.

Additionally, time and consistency are your most noteworthy partners. Having a decent arrangement set up today is superior to an ideal arrangement tomorrow.

With regards to investing for your child, do not choose by hearsay and take an educated choice.

By Policybazaar

Visit us at rfcindia.net for more info or to solicit the insurance policies.

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Insurance, Life Insurance

5 Benefits of Buying long-term Term Insurance

Visit us at rfcindia.net for more info or to solicit the insurance policies.

Recently the investment trend has changed drastically. Nowadays people get married in a later age, have kids even later. On the top of it, there are long-term home loans that completely roll over the retirement age. However, the liabilities and responsibilities towards your dependents do not necessarily end once you are 60 years old or retired. For this reason, most of the people these days opt for longer-term insurance plans.

However, the choice of policy duration rests with you. You can opt for any policy term as per your requirement. Considering the fact that term insurance plans provide death benefit post the death of the policyholder during the policy term, that’s why it makes sense to buy long-term coverage for young applicants.

Nowadays, term insurance companies in India provide term insurance plans that offer coverage till 85 or 100 years. If you are the only breadwinner in your family and want to secure the future of the loved one’s post of your demise then you can consider buying a long-term term insurance plan.

However, before that, you need to understand how to choose the best term insurance plan to meet your long-term financial goals and the disadvantages of buying the same. Check out this quick guide.

Below are Some of the Ways to Choose an adequate Long-Term Insurance Plan:

Policy Duration

When buying term-insurance it is a pre-requisite to consider the term for which the policy coverage will last. The policy term usually varies from one insurance provider to another. So, make sure that you choose a time period that works as per your financial condition, age, and future financial goals.

Longer duration term insurance plans are usually better than the shorter duration term insurance plans, as the tenure lasts longer, which means more savings.

Considering Income

One most important that you need to be sure of is your paying ability to pay-off the policy premium for the next 50, 60 or 70 years. So, ponder upon your current income, possible increments, savings, inflation, and future scope of income growth to be able to meet the premium cost let’s say after say 30 years. Therefore, make sure that your annual income is enough to be able to continue with the policy. Else, you can avoid a plan with too high term insurance premium rates.

Health Condition and Age Factor

These are small but important factors that an applicant needs to consider. When buying a term plan you must mull over your age and health condition. However, it makes sense to invest in the long-term at a young age if you want to ensure higher savings in future.

So, before you choose a term insurance plan you should consider your age and any health condition that you are suffering from. Because a person with serious health conditions, might not be eligible to buy a term plan for a longer duration.

Future Financial Goals

Most of the people buy term insurance cover for more than 40 years to ensure that they are able to fund their child’s marriage, child’s higher education cost, have comfortable post-retirement years and so on. So, while you select the term and coverage amount make sure that that you factor in the inflation as well.

Taking an example of the soaring education costs, the fees of B.Tech Course the costs Rs. 10 lakh now would cost Rs. 42 lakhs after 15 years. So you need to choose the sum insured, policy duration that would help your dependents lead the dame lifestyle even when you are not around.

Seek Financial Advice

You can seek insurance advice from a professional before you get yourself into a long-term commitment of paying a premium for a term insurance plan for the selected duration. Analyze all the pros and cons before you actually make the payment. You can ask the experts to take you through different plans and their premium rates and duration and help you select the one as per your requirements.

The Cons of Buying Long-term Term Plans

Naturally, longer coverage tenures would mean paying premium for a more years, as you need to pay it regularly throughout the policy duration. But then again, is it feasible to pay the premium for such long tenures?
Buy a long-term term insurance plan would mean paying off regular premiums for the entire duration to keep the policy in force. And, it can be disadvantageous for the below-mentioned reasons:

Liability to Pay Premium Post-retirement

If you choose a longer duration term plan that promises coverage up to 85 or 100 years, the premium would be an added expense post your retirement also. You will be liable to pay the premium till the policy term i.e. 85 or 100 years of your age. So, it can be difficult for you to pay premium regularly especially when you do not have a regular earning.

Higher Chances of Policy Lapse

In cases where the premium needs to be paid for such a long tenure, there is a higher probability of you inadvertently missing a payment during the retirement years. Non-payment of the premium would mean policy lapse. And all the year that you have been paying would be lost, along with the coverage benefits. So, make sure that it is a well-thought decision.

In a Nutshell

The above-mentioned parameters would help you select an adequate term insurance plan for longer tenure. You can now secure your family without worrying about future payments once you are sure while purchasing the policy. You can check out some of the best long-duration term plans on our site, compare them on the basis of the above factors and make an informed choice.

By Policybazaar

Visit us at rfcindia.net for more info or to solicit the insurance policies.

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