HDFC Life Child Insurance Plans-hdfc-life-child-insurance-plans

Almost every insurance company in the market today offers a child insurance plan which is a unique plan designed specifically for the childs benefit. This plan aims to create a stable future of the child in terms of finance which will remain unaffected by the presence of the parent. These plans have some common features and promise some unique benefits which are highlighted in the following points: The plan can be bought only by a parent who has a minor child for whom he would like to plan. Other individuals cannot buy the plan. HDFC offers two HDFC child plans These plans cover the life of the parent and he is also the person responsible for paying the premiums. Some plans, however, also cover the life of the child while the parent is supposed to pay the premiums and is called the policyholder. Child insurance plans can be offered as a traditional plan where the benefits payable on death or maturity is fixed or a unit linked insurance plan where the benefits payable will depend on the growth experienced in the capital market. This is because the premiums are invested in funds representing the capital market and so the growth is market related. One of the HDFC child plan is an ULIP while the other HDFC child plan is a traditional product Unlike other plans of insurance, a child plan will have an inbuilt benefit of the waiver of premium rider. This rider ensures the continuation of premium even after the policyholder who is responsible for premium payments dies. So, the child, who might be the life insured or the beneficiary will not have to worry about paying premiums if the parent dies because the company will take care of the same. Normal maturity benefits are payable if the policyholder survives till maturity. However, on death two things happen. One, an immediate death benefit is paid to the nominee. Two, the plan still continues and the premiums are paid by the insurance company on every due date. When the plan matures, the maturity benefit is paid again to the nominee and then the plan is completed. HDFC child plan helps the policyholder to get maximum maturity benefits and also take advantage of various payout options under these HDFC child plans. If the childs life is insured, the insurance company does not take the risk immediately since inception. There is a few years wait which is called the deferment period during which the Sum Assured cover is not provided on the childs life. If the child dies only the total premiums paid till the childs death are returned to the policyholder, i.e. the parent. Another feature in case where the child is covered is the vesting of the policy. Vesting means transfer of ownership of the policy. Since, the child being a minor cannot have the title to the policy, the parent acts as the policyholder. But, after the child attains 18 years of age, he is legally matured and then the policy ownership transfers in his name automatically making him the policyholder.