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 and A on insurance every Monday.
I have a 10-year–old son who wants to become a doctor when he grows up. How does one decide the exact amount needed to invest for that?
The key to successful planning for your child’s future is to start early. As you are aware, the cost of medical education is very high and there are a lot of hidden costs to it as well. The decrease in the value of money due to inflation should also be kept in mind while planning. It is important, therefore, to find out what will be the monetary requirement in the future and with that goal in mind, you can plan your investment.
I want to invest a regular portion of my income for my child’s education. Should I invest in a unit-linked child plan or a fixed deposit?
If the purpose for investment is to support your child’s education, then I would suggest you opt for a unit-linked child plan. These plans provide a long-term investment option and provide financial protection to the child in case of the parent’s death. Most such policies provide waiver of premium and pay the entire sum assured on the death of the policyholder.
I have already invested in a health insurance policy. Would it be advisable to still buy a life insurance policy with the riders?
The health insurance policy and riders offered by a life insurance company are different products and should not be compared. A health insurance policy generally covers you against hospitalization costs and post-hospitalization for a limited period, depending on the sum assured. A life insurance policy along with death benefit offers riders such as hospitalization cash benefit or critical illness rider and pays you a lump sum assured, irrespective of the total hospital/doctor’s bill.
Readers are welcome to write in with their queries to firstname.lastname@example.org. 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.