SBI Life Insurance has introduced a new Child ULIP Plan with some extra-ordinary features.
It is a Unit Linked Child cum Life Insurance plan available for parents (Life Assured) who have a child aged between 0 – 17 years. You can pay premiums for a limited period whereas the policy benefits would continue till your child becomes an adult.
Your money can be invested in any of the available Nine Funds, as per your choice and risk appetite. At the end of the term your accumulated Fund Value can be used for your child’s higher education, marriage, financial security or anything else, while withdrawals facility helps you to meet unplanned expenses.
Protection for your child’s future in your absence:
In case of your unfortunate death due to any reason other than accident:
Benefit 1: We pay a lump sum benefit equal to maximum of Sum Assured and 105% of all basic premiums paid as on the date of intimation of death claim. If on the date of intimation of death, the Sum Assured is less than 105% of all premiums paid, the amount in excess of the Sum Assured will be paid from your Fund by disinvestment of units.
Benefit 2: We continue to pay your future premium(s) on your behalf (inbuilt Premium Payor Waiver Benefit) and the accumulated Fund Value will be paid at maturity. In case of your unfortunate accidental death or accidental total and permanent disability we pay:
Additional benefit equal to Accident Sum Assured
The Accident Benefit and Premium Payor Waiver Benefit are not available in the Single Premium policies.
Loyalty Additions, by way of free allocation of units:
During the term of the policy loyalty units would be given for in-force policies on completion of specific durations. Loyalty additions depend on term of the policy.
The loyalty addition at relevant Policy Year end will be equivalent to – 1% x [Average Fund Value over the 1 day of the last 24 policy
Loyalty additions are payable at the end of the year(s) as per the chart below
The loyalty addition will be offered for all policy terms irrespective of premium frequencies. The same will be added through allocation of units at the end of relevant policy years as mentioned in above chart. Loyalty additions will continue in case of continuance of the policy after the death of the Life Assured. Loyalty additions once allocated shall remain attached till the remaining Policy Term.
Age at Entry: Parent (Life Assured) : 18 years to 57 years
Child: 0 years to 17 years
Age at Maturity*: Parent (Life Assured) : Maximum: 65 years
Child : 18 Years to 25 years
Plan Type: Limited Premium upto the Policy Term / Single Premium
Policy Term (PT)*: 8 years to 25 years
Basic Life Benefit:
In the event of unfortunate death of Life Assured, a lump sum benefit equal to higher of the Sum Assured or 105% of all premiums paid till date of death will be payable. If on the date of death, the Sum Assured is less than 105% of all premiums paid, the amount in excess of the Sum Assured will be paid from your Fund by disinvestment of units. In the event of death of child no Sum Assured is payable. Life Assured will inform the Company regarding the event. In such case he/she can either continue the policy or terminate the contract. In case of termination of contract, the Fund Value (without any Surrender Charges), will be payable. If both the Life Assured and the child die during the term of the policy, the policy will be automatically terminated and all due benefits will be paid along with the Fund Value.
On completion of the Policy Term, Maturity Benefit i.e. the Fund Value shall be paid to beneficiary in a lump sum or as per settlement option, if chosen. The beneficiary will be: The Policyholder if he/she survives OR Child, in case of death of the Life Assured during the Policy Term
Additional In-built Benefits:
These benefits are not available in the Single Premium policies.
1. Accident Benefit:
This in-built benefit provides an additional benefit for Accidental Death or Accidental Total Permanent Disability. In this benefit, the Accident Sum Assured is equal to the Base Sum Assured, subject to an overall cap of Rs. 50 lakhs. This cap of Rs. 50 lakhs pertains to the total Sum Assured under all policies with SBI Life for Accidental Death and Accidental Total Permanent Disability benefit on your life.
Accident Sum Assured will remain constant during the Policy Term.
In respect of Accidental Death, the amount payable is in lump sum, whereas for Accidental Total Permanent Disability, Accident Sum Assured will be paid in 10 equal annual installments. Accidental Death should occur within 120 days of the date of accident, solely and directly due to injuries and independent of all other causes. In case of Accidental Total Permanent Disability Benefit the permanence of the disability will only be established 6 months following the date of the disability.
This Accident Benefit shall be payable only once, i.e. in the event of death or disability whichever occurs first. In case of claim towards Accidental Total Permanent Disability being accepted, Accident Benefit will cease and no charges towards the same will be deducted from your Fund. However , the policy will continue with basic Life Benefit and you would continue to pay all due
premiums thereafter .
2. Premium Payor Waiver Benefit (PPWB):
There is also an in-built Premium Payor Waiver Benefit under this product whereby SBI Life Insurance Company will pay all the future premiums at respective future premium dates. Subsequently on maturity your child will be entitled to the Fund Value to meet his/her needs. In case of death of child the Premium Payor Waiver Benefit will cease and no further charge will be deducted. If the child dies subsequent to the death of the Life Assured the discounted value of remaining future premiums are paid to legal heir of Life Assured.
You may download SBI Life Insurance Scholar Child Plan from here.
Comments from InvestmentKit.com : Like always, SBI Life Insurance has come up with one of the best plan for child higher education and/or marriage planning. If you’re looking for such plan, start investing in this plan without any second thought. Low charges as compared to other ULIP’s as of now of other companies makes it on top of the list.
However, you must compare the IRR from official benefit illustration before signing the application form. If you’re taking this plan for a child upto 3-4 years for a period of 14-15 years, you can get higher returns. Higher the period, higher the returns. But for a period of about 10 years, you should invest in mutual funds rather than this plan.