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Sowmya Sundar

Creating Life — the new child protection plan from the ING Vysya — offers double protection to the child if his parent dies. It not only provides immediate relief but also acts as a savings plan for future needs such as marriage and higher education. As the child cannot pay premiums under such circumstances, the policy has a built-in waiver of premium clause. On the parent's death, the policy will continue to be in force and all premiums are waived.

Under the plan, an immediate payment equivalent to the sum assured is made on the death of the policyholder (the parent). The plan continues till maturity and an additional sum assured — irrespective of the earlier payout — is paid with accumulated and terminal bonuses. If the child dies during the premium-paying period, then no payouts are made. Bonuses are reversionary and compounded, that is, apart from the bonus on the basic sum assured, the accumulated bonuses will also earn bonus. All bonuses accumulate on the sum assured and are not guaranteed.

Loans can also be taken against this policy.

Riders

You can also choose from four riders: Term, Accidental Death, Disability and Dismemberment, and Waiver of Premium. The built-in waiver of premium clause is applicable only if the policyholder dies. But if the parent were to meet with an accident and become disabled, the built-in clause will not be applicable. In such circumstances, the additional rider will provide cover if opted for. The payout under the riders is equivalent to the sum assured subject to a maximum of Rs 20 lakh.

Premiums

Premiums can be paid annually, half-yearly, quarterly or monthly. The premium payment term is equivalent to the policy term. The minimum premium payable is Rs 6 lakh. The premium payments for a male in various age groups (assuming a 20-year term, yearly premium payment and Rs 2 lakh sum assured) would be Rs 9,557 for age 25; Rs 9,665 for age 30; and Rs 9,883 for age 35.

Maturity benefit settlement options

At maturity, the child has the choice of taking the maturity benefit either as a lumpsum or in three or five equal annual instalments. The quantum of instalments will be calculated on the rates of interest applicable at the time.

If premium payments are discontinued

If premium payments are discontinued after at least three years premiums have been paid, the plan will continue with a reduced paid-up sum assured and without any death benefit. The reduced paid-up sum assured along with vested bonuses are payable on plan maturity. The plan will not be eligible for bonuses if it is made paid-up.

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