Ask Mint | Child plans help secure the future

Ask Mint | Child plans help secure the future
Comment E-mail Print Share
First Published: Sun, Aug 16 2009. 11 22 PM IST

Updated: Sun, Aug 16 2009. 11 22 PM IST
The insurance business in India isn’t just growing, but also becoming more sophisticated in terms of product offerings. To help readers keep ahead of developments in this business, Mint features a Q&A on insurance every Monday.
I have been blessed with a child a month ago and have been approached by an agent to buy a child plan. What are the advantages of buying one?
Planning for your child’s future is an important decision in any parent’s life. While you may well have a financial plan in place for your own future, it is equally vital that you make similar provisions for your child’s future. There are a variety of products available to provide for the child.
Child insurance plans are tailor-made to act as a savings tool to secure your child’s future. Child plans help address your child’s future education and/or marriage needs. They also provide the capital that your child may need at a later stage to venture into a business. The earlier you start investing, the higher would be the fund value of your policy on maturity.
What is a group pension scheme? Do life insurance companies offer such a scheme?
A group pension scheme is a product that an employer sets up for the benefit of his employees. All staff can become members. Most of the life insurance companies offer group superannuation products. A well-structured group superannuation plan helps to create an irrevocable fund during the working lifetime of the employees for their pension benefits after retirement.
The employer can make a contribution of up to 15% of basic salary of the employee towards this fund. The employee can also make voluntary contributions to the superannuation fund.
Readers are welcome to write in with their queries to askmint@livemint.com. The questions will be answered by senior executives from leading insurance firms.
This week’s expert is T.R Ramachandran, managing director and CEO, Aviva India.
Comment E-mail Print Share
First Published: Sun, Aug 16 2009. 11 22 PM IST