Ask Mint | Single-premium policy, the perfect gift

Ask Mint | Single-premium policy, the perfect gift
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First Published: Sun, Feb 08 2009. 09 33 PM IST

Updated: Sun, Feb 08 2009. 09 33 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.
What is the minimum amount I can invest every year in any unit-linked insurance plan (Ulip)? Also, is it advisable to have a systematic investment plan in Ulips, just as we have in mutual funds?
The minimum amount that can be invested in a unit-linked plan which requires regular payment differs from company to company. Most companies would have Ulips with a minimum payment of Rs12,000. However, it is possible that some products could even have a minimum premium of Rs1 lakh. Single-premium Ulips would have a higher minimum premium requirement. This again would vary from company to company.
Systematic investment is a natural benefit that you get while investing in a regular premium insurance plan. The periodicity of the systematic investment plan could be yearly or quarterly or monthly, depending on your convenience.
I am a 60-year-old man and I have been recently blessed with a granddaughter. My friend suggested a single-insurance life insurance plan. Does it make sense from a long-term perspective?
You are absolutely correct in considering a life insurance plan as a gift for your newly born granddaughter. A life insurance plan is a thoughtful, practical and valuable gift that can help a child take the first step towards financial security. A single-premium policy is the perfect gifting idea for a newborn. A single-premium policy is a plan where you make a one-time payment for the insurance policy. In other words, it gives the assurance that with a single payment, the plan for the child continues and would help provide for the critical milestones in the child’s life.
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 Rajesh Relan, managing director, MetLife.
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First Published: Sun, Feb 08 2009. 09 33 PM IST