AEGON Religare has launched a child endowment plan, that offers pre-fixed pay-outs during the last four policy years. It is aimed at parents intending to build a kitty to fund their children's higher education .
The product offers two options for the life assured (parent) to choose from with respect to death benefits. Under the first option: The sum assured and accrued bonus then will be handed over to the dependent (child), with guaranteed pay-outs flowing in during the last four years.
The second option, in addition to the benefits offered under option 1, undertakes to provide 10% of the sum assured to the nominee, every year, till the end of the premium payment term.
The product comes with an in-built waiver-of-premium benefit. This apart, the policyholder can opt for accidental death, disability, dismemberment (ADDD) rider benefit too.
The plan may interest parents who are convinced about the insurance-cum-investment concept and seek comfort in the secure-returns promise.
The key area of concern in endowment plans is their opaque charge structure. Also, since these traditional products do not invest in equities as such, their return-generating ability is limited.
Source: economic times