Analysis of Children Insurance Plans in the Present Context

Transcription

1 IJMT, Volume 2 Number 1 January-June, 2012 pp Analysis of Children Insurance Plans in the Present Context G. BALACHANDAR 1, PANCHANATHAM 2 & K. SHEIK MYTHEEN 3 INTRODUCTION Life insurance in our county was regularized by Central government, for which 245 Indian and foreign insurers, Provident societies were taken over and nationalized. LIC was established by LIC Act, Central government contributed Rs 5 crores for formation of LIC. Till 2000, LIC was the single leader in this field, covered the risk or uncertainty faced by crores of people in India. IRDA was created by IRDA Act 1999 in the Parliament, and permitted lot business magnet to start life Insurance business. Now there are 19 private life insurance companies. Offering various innovative life insurance product. This entirely different new product satisfies the needs and demands of lot of people. Life insurance is a contract that pledges payment of an sum assured to the insured person or his nominee or his assignee. On the happening of the event against. 1. During maturity date. 2. Particular dates at regular intervals. 3. Unexpected death. In other investment methods, wealth is created over a certain period of time and at any given point of time the value available in the investment will be based on the actual investments done in that avenue. In case of life insurance product, Perhaps the sum assured is available to the nominee/ assignee or the beneficiary on the occurrence of the unfortunate death/ disease, any time during the policy tenure. 1. Asst. Professor of Busniess Adminis-tration, Annamalai Univeristy, Chidamabaram, Tamilandu. 2. Professor & Head of Busniess Administration, Annamalai University, Chidambaram, Tamilnadu. 3. Head, Dept. of Business Administration, Sadakathulla Appa College, Tirunelveli, Tamilnadu.

2 40 G. BALACHANDAR, PANCHANATHAM & K. SHEIK MYTHEEN Various plans offered by life Insurance companies: 1. Term assurance plan 2. Endowment plan 3. Children s assurance plan 4. Pension plan 5. Unit linked Insurance plan.and Riders. This is the new concept introduced by private life insurer and is followed by LIC also. Rider is a condition, that is attached with the main policy offering additional benefits. Insurers find it convenient to have a small number of basic plans, with riders being offered as options, so that effectively the prospect has number of option to choose from. In this article researcher compares the children plan offered by LIC, HDFC standard life insurance, Tata AIG, Bajaj Allianz life insurance, ICICI prudential life insurance, SBI life. OBJECTIVES 1. To analyse the strength of children s plan offered by few life insurance companies. 2. To compare features of various of children s plan promoted by life insurance companies. METHODOLOGY Primary data were collected, after making discussion with various agents of different life Insurer in Tirunelveli city. In this article agents were considered as experts. Secondary data were collected from agents ready reckoner, website, articles Published in Various Journals. In this study, researcher s compared the attributes of various children s plan offered by LIC, HDFC insurance, Bajaj Allianz, Tata AIG, ICICI Prudential, ING-vysya. CHILDREN S PLAN Despite there are lot of insurance plans, Children s plan has lot of advantage to the insured than other plans. Every one works day and night to earn more money for the welfare of his son s education or his daughter s marriage. No one can live without this type of basic dream. Even if the policy holder dies, his family may face financial crisis for the day to day life. But his dream i.e his daughters marriage, son s higher education will not be affected by the children s plan. Companies various life insurance companies children plan, it will be useful to the public to choose the right companies children plan at right time and at right price.

3 ANALYSIS OF CHILDREN INSURANCE PLANS IN THE PRESENT CONTEXT 41 HDFC STANDARD LIFE CHILDREN S PLAN HDFC s children plan are attracted by all kind of people in our society. HDFC s plan offers invaluable financial support to the child s marriage or higher education. This plan is introduced to safe guard the child s future by giving sum assured and bonus to the child, on maturity or in case of the life assured unexpected death [i.e: parent]. According to Gopalakrishna (2007) There are insurance policies that cover the lives of children, who are not majors. Here, the proposal for insurance cover will have to be made by a parent or a guardian. It is clear that even though policies are written by the parent or guardian, they are the real core takes of the child. They know when to buy children plan and choose the right option. Special features: Let us assume life insured is the parent, beneficiary is the child. As a life insured, parent has to pick any one option. Added Advantage Perhaps life insurance company may announce reversionary bonus to the policy holder based on their sum insured. Once it is announced that may be added with the sum insured. This happens every year based on profit of the organization. If an insured person died, before getting reversionary bonus; nominee of that policy may have a chance to receive interim bonus declared by HDFC. This Interim bonus is based on percentage of sum insured. Some time Terminal bonus may be added to basic sum insured and other bonuses if any. Terminal bonus will be announced only at the time of maturity. Policy holder s are allowed to utilize the tax benefits u/s 80-c and 10(IOD). Death Benefit [unfortunate death Plan to Pick of parent, during policy tenure] Maturity Benefit Accelerated benefit Plan Sum assured + Bonus S.A + Bonus Policy ceases instantly. Maturity benefit plan Waiver of premium S.A. + Bonus Policy continues Double Benefit plan S.A S.A + Bonus Waiver of premium Policy continues Basic Criteria Minimum Maximum Policy Tenure Age at entry Maximum age at maturity - 75 LIC KOMAL JEEVAN This is one of the best selling insurance plan in LIC. The main objective of this plan is to save children s future from the unfortunate death of bread

4 42 G. BALACHANDAR, PANCHANATHAM & K. SHEIK MYTHEEN winner of the family. Here policy holder is the child, risk starts either 1 st policy anniversary immediately following the completion of 7 years of age or after 2 nd policy anniversary date, which is later. Guranteed bonus of Rs 75 per 1000 sum assured is accumulated each financial year with sum assured. If LIC is going on in right track and earn more profits, LIC may announce its terminal bonus, and it is added with sum assured. Survival Benefit Sum assured is selected by life insured. Certain percentage of sum assured is paid to the insured period at a regular frequency. Life Insure s Reaches (age) % of Sum Assured If life assured dies before starting date of risk, it covers all the premium paid (except premium paid for waiver of premium) is returned. If life assured dies after starting date of risk cover, sum assured and bonuses if any will be given. BAJAJ ALLIANZ CHILD GAIN PLAN Bajaj Allianz s children plan comprises numerous benefits with it. While analyzing child gain plan, it is understood that, higher authorities of this company took more effort in designing this plan for the welfare of children. Along with the child. Parent is also insured, because child cannot be jeopardized at any cost. It the policy holder dies during the tenure of the policy, 1% of sum assured is paid to the family till the end of the policy term. If the child likes to continue with Bajaj, he/she is permitted to buy with profit endowment plan or an equivalent plan for twice the amount of face value of the present policy, without undergoing any medical examination. Policy Anniversary following Completion of Age For Child Gain 21, 21+ For Child Gain 24, % of S.A 20% Bonus Bonus accumulated SBI LIFE SCHOLAR - II Children is plan introduced by SBI life insurance is named as scholar-ii. It has combined the special features of endowment plan and money back policy.

5 ANALYSIS OF CHILDREN INSURANCE PLANS IN THE PRESENT CONTEXT 43 Vijaya Raghavan (2008) article highlights Family is regarded as units and looks bread winner of the family for its economic necessities. Moreover experts say that plan like scholar-ii are necessary to safe guard children marriage and education. Customers desire and expectation change regularly, by keeping it in mind, scholar-ii plan was launched. Parent in the range of years, with child in the range of 0-15 years of age are able to become customer of this policy. If a woman wants to insure herself, she will be given fantastic rebate on the premium amount. She is given more discount on the premium, if she prefers to choose huge sum assured. Financial benefits received by the insured person as given below: During the Policy Anniversary following the Life Assured Reaches [age] Percentage of Sum Assured (1 st Installment) (2 nd Installment) (3 rd accrued 25% of S.A + bonus if any) 21 (4 th Installment) Nominee may collect the S.A and accrued bonus in a single time at the unfortunate demise of life assured. It attaches 1) Dhanvantri supreme 2) Accidental Death & Permanent disability Rider 3) Premium waiver benefit as rider with the main policy. ICICI Predential insurance launched it s innovative children s plan named Smart kid regular premium. It is a traditional with profit plan to save the children from financial crisis, despite the insured person/parent s unfortunate demise. At the death of insured person beneficiary can get 10% of the sum assured per annum till the end of policy. In additional to actual sum assured and accrued bonus. Hence child can continue its education and its parent dream becomes real. It is a children plan utilizes the salient features of money back policy. Life Insured can surrender the policy only after 3 years of the commencement date it includes 2 riders such as income benefit rider, accident and disability benefit rider. ING-VYSYA New children s plan designed by ING-vysya life insurance is called creating life. This plan is appropriate for person who takes care his child s higher education and marriage. Child gets terminal bonus if any only at the timer of maturity, despite the insured person dies during the tenure of the policy. Premium s need not be paid after the death of the insured parent. Minimum premium must be paid as below. At the time of maturity nominee can collect all financial benefit in one installment or collect it in 3 or 5 equal installments. After paying premium for at least 3 years, insured person is permitted to avail loan facility based on this policy.

6 44 G. BALACHANDAR, PANCHANATHAM & K. SHEIK MYTHEEN Mode Premium Amount (Rs) Monthly 750 Quarterly 2000 Half yearly 4000 Annually 8000 TATA-AIG Customer friendly children s plan introduced by Tata-AIG life insurance company is Assure career building. It utilizes the main features of money back plan. Child will receive extra 10% of sum assured along with S.A provided the policy persists for 10 years. Maturity benefit receives by the child at the below period. Age of Child % of Sum Assured and accrued bonus Another unique feature of this plan is automatic premium loan. According to this special feature if the insured is not able to pay the premium with in the Grace period, the premium then due will be paid as an automatic loan to the insured person. COMPARISON Here relate the special features of various behemoths various children plan. It is clearly understood that one companies plan is slightly different from its competitor s product in order to satisfy the existence of unsatisfied customer. CONCLUSION Life insurance companies include both public sector and private sector has lot of products in its portfolio. All the companies give more importance to Traditional children plan as like as other products. Need for children plan is more than other life insurance plan. Because children plan s main objective is to safe guard children education and marriage even after the unfortunate death of the bread winner of the family. Children s plan of various companies have unique feature. Client has to choose the right plan based on the child s age, family income, future need for child education and marriage. Totally it is understood, that children scheme cannot be not isolated from any family. References Balachandran.S. Life Insurance Insurance Institute of India, Mumbai

7 ANALYSIS OF CHILDREN INSURANCE PLANS IN THE PRESENT CONTEXT 45 Gopalakrishnan.G. (2007), Life Insurance Products Their innovation and developments Insurance Chronicle, June. Karvy Bazaar Baatein May 2008-Volume-II. Issue