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Life insurance plan, the perfect gift for a newborn

Life insurance plan, the perfect gift for a newborn
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First Published: Sun, Jul 27 2008. 10 35 PM IST

Updated: Sun, Jul 27 2008. 10 35 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 am 30 years old and I plan to upgrade my life insurance with a term plan. I already have an endowment plan. What is termlife insurance?
The simplest form of life insurance providing pure risk cover is the term plan.
In a term plan, in case of the death of the policyholder during the period of the plan, his nominee gets the “sum assured” (or the cover amount as it is commonly known).
The term plan works like a contract that provides a specified death benefit, but no cash build-up or investment component.
Term plans may have lower premiums compared with other insurance plans and provide peace of mind against life’s uncertainties.
I work in an advertising agency and have been recently blessed with a daughter. My father wants to buy a gift for my daughter. I have suggested a life insurance plan. Does it make sense from a long-term perspective?
A life insurance plan as a gift from her grandfather is the perfect gift for a newborn.
Children’s life insurance is a thoughtful, practical and valuable gift that can help a child take the first step towards financial security.
I recommend at this stage that your father can buy a single-premium plan.
The single-premium plan helps you pay for the insurance plan with only one payment.
The plan for the child will still continue and hence, help provide for the critical milestones in her 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, Jul 27 2008. 10 35 PM IST