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 want to invest some money for my child’s education. What advantages does an insurance product offer over other financial instruments such as mutual funds?
You should look at long-term investment products when saving for your child’s education to build the required corpus.
It is advisable to invest in a child insurance plan because this not only helps you build a required corpus over the policy term, but also covers you against uncertainties in life.
Child plans come with additional features such as income benefit riders and waiver of premium options. These ensure that even if you are not around, the child’s future does not suffer and the policy continues till maturity.
What is a family income benefit rider?
A family income benefit rider is usually attached to a basic life insurance policy. If one opts for this rider, the life insurance company not only pays the death benefit in case of the unfortunate death of the policyholder, but also provides a regular monthly income to the family for the rider policy term.
For example, if there is a 10-year family income rider attached to the main policy, and the insured dies, a life insurance company will pay the family monthly income for the remaining rider term.
Readers are welcome to write in with their queries to email@example.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.