Child insurance: Waiver of premium can help secure education goal

Vineet Kumar (name changed on request), a 32-year-old Faridabad-based advertising executive, is the father of a one-year-old. While he finds fatherhood fulfilling, he admits to certain anxieties. "I do sometimes worry about what would happen to my child if I am not around," says Kumar.

- SANJAY KUMAR SINGH & KARTHIK JEROME

A child insurance plan can offer the necessary reassurance to parents like him.

Key features These plans generally mature when the child reaches 18 to 25 years. Thus, their payouts are aligned to milestones like higher education and marriage. These products can help with disciplined, goal-based wealth creation. Most importantly, they provide insurance coverage. "On the unfortunate demise of the parent, an immediate lump-sum payout is made. Also, all future premium payments are waived. If the product comes with a premium payment term of, say, 10 years, and the parent passes away after two years, the life insurance company pays the remaining eight premiums, thereby ensuring the policy continues to be in force and offers all the promised benefits upon maturity," says Srinivas Balasubramanian, chief of products, ICICI Prudential Life Insurance.