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Sowmya Sundar

SBI Life-Scholar is a child endowment plan that matures when your child turns 21. It takes care of your child's educational needs in the event of death.

How it works?

The policy is taken on the life of the parent or guardian. You pay regular premiums till the child grows up to be 18. The premium would depend on your child's age as well as your age. You have two payout options. You can receive payments in four equal instalments of 25 per cent each for the next four years till the child is 21 years old. Alternatively, you can receive a one-time payment either when your child turns 18 or 21. If you choose to withdraw at age 18, the payout will be discounted.

Maturity benefits

The maturity benefit is the sum assured plus a guaranteed bonus. The minimum guaranteed bonus is Rs 25 per Rs 1,000 of sum assured. The bonus accrues till maturity, that is, till 21 years. You might also get additional bonuses depending on the policy performance. If you choose to receive payments in instalments, you get the bonus along with your final instalment at the end of 21 years.

If you choose to receive the benefit at age 18, you get the guaranteed bonus only up to 18 years. The policy terminates thereafter. The payout choice has to be made three months before your child turns 18.

Death benefit

A feature of this plan is that the payout is made both on death and maturity of the plan. On the event of death before maturity, an immediate payment equivalent to the sum assured plus bonuses accrued till date is paid. Moreover, all future premiums are waived. Over and above, the child receives 25 per cent of the sum assured in four equal instalments from the age of 18.

However, bonuses are paid only once — at the time of death. This is applicable even if death occurs in the interim period (18 to 21 years), though you pay premiums only till 18 years.

Riders

You can opt for Accidental Death and Total Permanent Disability cover at a nominal rate of Re 1 per annum per Rs 1,000 Sum Assured. On accidental death, double the sum assured is paid as benefit. Under total permanent disability cover, the insured receives twice the sum assured over the period of the policy.

On occurrence of disability, 10 per cent of the sum assured is paid every year and the balance on maturity along with guaranteed returns. All premiums are also waived on occurrence of disability.

Loan

You can take a loan for up to 95 per cent of the surrender value of the policy after one year.

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