Bajaj Allianz Child Plans
There are two main Bajaj alliance child plans - Bajaj Allianz Lifelong Assure and Bajaj Allianz Young Assure. Seeing your kid grow into a financially independent person is one of the greatest joys for a parent. When there is financial security, the kid becomes smart, resilient, self-dependent, and focused. There is no unwanted stress or tension on the kid. Their formative years are without the worry of an uncertain future.
Financial planning is a crucial aspect of parenting. Taking little steps to ensure a kid’s financial future ensures that at important milestones, there is enough money to cover their expenses. Rising educational expenses travel to overseas destinations for project work, and many other miscellaneous expenses can increase financial burden. It is always in the best interest of the parents and children to reduce this financial burden by way of systematic savings.
After education, another important milestone in your child’s life is marriage. Depending on how early you have started planning for your children’s future, the key milestones of your kids are school education, college admission, college education, post-graduate education, and marriage. Therefore without leaving things to chance, it becomes important to take control of the future by building a corpus of fund that evolves.
Core Benefits of Bajaj Allianz Child Plans
Bajaj Allianz Child Plans come packed with a wide range of benefits to offer to its buyers. Here is a rundown of the key benefits offered under Child Plans:
Supporting a Child’s Immediate and Future Educational Expenses
Most parents want to give the best education to their children. However, it is critical to start planning for that early on. Gaining admission in colleges, especially the reputed ones, might take a lot of money. It may not be feasible to generate this amount of money at that time. That is why it is important to plan. By building a corpus of the fund over a period of time, you can ensure that by the time your child needs money to be educated in a better college in India and abroad, you have the money handy.
Bajaj Allianz Child Plans cover a parent’s life. So that if anything happens to the child, their future is still secure. They are not burdened with the responsibility of paying the remaining premiums. Once a child plan is taken, a child’s future is guaranteed. The fund will continue to accumulate income depending on whether the plan is unit-based or not. Therefore, you need not be worried about your child’s future after taking this plan. Therefore it is critical to take this plan to ensure that you have peace of mind, and your child is not put in financial distress.
If savings are regular and disciplined, then it is possible to save a large amount of money over a period of time. The accumulation of funds ensures that at critical junctures in your lifetime, you have enough money to attend to your child’s immediate requirements.
Under Section 80C and Section 10(D) of the Income Tax Act, tax benefits can be availed under Bajaj Allianz child plans. The premium amount paid is covered under the tax benefit. Even the maturity benefit and death benefit received can be covered under the tax rebate.
Tips to Purchase a Child Plan
Here are some tips to purchase a child plan:
Understand the Fund Requirement
Arriving at a correct estimation of the funds with Bajaj Allianz child plans is a crucial aspect when planning for a child plan. You can check if the returns from the plan are enough to cover the proposed future expenses of your child. The plan should have enough accumulations to ensure that at critical milestones, there is enough money to fund your child’s progress. You can use a child plan calculator to achieve this. Using a child plan calculator can help you determine the right amount that is needed for your child’s journey through life and adulthood.
Know the Time Horizon
Once the determination of the amount that is required is done, the next step is to determine the period of the child plan. Over this period of time, you will build the corpus. This corpus of the fund has to be enough to support your child’s financial requirements through education and then life events such as marriage.
Choose a Plan based on Personal Risk Appetite
Depending on how risk-averse or risk-compatible you are, choose a plan that suits your lifestyle, short and long-term aspirations, income, and family dynamics.
Purchase a Plan that has Adequate Insurance Cover
You should choose a plan that has sufficient cover so that even in the event of an illness or hospitalization, you won’t have to pay from your pocket to repay the expenses. Sometimes, taking less coverage can be detrimental - if any unforeseen circumstances occur, the financial burden is borne by the parent and that can spiral into further financial stress.
Bajaj Allianz Lifelong Assure - Child Investment and Saving Plan
Bajaj Allianz offers this plan which is designed to provide a strong platform for a child to fulfil their life goals and aspirations. Having this plan is considered to be a motivational factor. Along with the unconditional support of the parent, the child feels reinvigorated with confidence with Bajaj Allianz child plans. No financial stress challenges will hamper if this plan is systematically paid and planned. This plan provides life cover till the insured turns 100 years old along with a steady income. There is also a cash bonus component that is paid out along as well that starts getting paid out from the 6th policy year onwards.
Even in the unfortunate event of the death of an insurance premium payer, the guaranteed death benefit can be up to 300% of the sum insured amount depending on the premium payment term.
Key Advantages of the Bajaj Allianz Lifelong Assure - Child Investment and Saving Plan
The key advantages of the Bajaj Allianz Lifelong Assure - Child Investment and Saing Plan are as follows:
After the premium payment term, every year 3% of the sum assured is given as guaranteed cashback. This payment is up to the age of 99 years
A cash bonus is paid out from the 6th year onwards up to the age of 99 years.
Whole Life Policy
Up to the year of 100 years, life cover is available. Guaranteed cashback and bonus is provided up to the age of 99 years.
Limited Premium Paying Term
There are three premium payment terms available of 10, 15, and 20 years.
Guaranteed Death Benefit
Up to 300% of the sum assured is paid out as a guaranteed death benefit as with all Bajaj Allianz child plans.
Periodicity of Death Benefit Payout
There is the option to take death benefits either yearly or in monthly installments. This can be done over a period of 5 to 10 years from the date of death of the policy premium payer.
Multiple Rider Options
One or more optional riders can be chosen to increase the coverage. There are five available riders under this policy. It can be taken at a nominal extra cost.
High Sum Assured Rebate
Depending on the age of the premium payer, and premium payment term, rebates can be received of up to Rs. 19 per Rs. 1000 sum assured. The only condition being that the minimum sum assured is Rs. 1 Lakh.
|Entry age||The minimum age is 10 years||The maximum age is 55 years|
|Policy term||100 subtracted by the age at entry|
|Premium paying term||10, 15, 20|
|Frequency||PPT 10||PPT 15||PPT 20|
|Yearly||Rs. 18,303||Rs. 13,401||Rs. 10,811|
|Half-yearly||Rs. 10,000||Rs. 8,500||Rs. 7,000|
|Quarterly||Rs. 5,500||Rs. 4,625||Rs. 3,875|
|Monthly||Rs. 2,000||Rs. 1,667||Rs. 1,417|
Bajaj Allianz Lifelong Assure plan offers the following benefits:
On the unfortunate death of the Life Assured after the policy start date, but before the date of policy maturity, and if the policy has not been terminated, will pay the death benefit to the nominee. This is subject to all premiums being paid. Sum assured along with death bonus along with terminal bonus, if any, is paid. If the policy is a paid-up one, 2 times, 2.5 times, 3 times of the sum assured of the paid-up policy is paid. This is based on whether the premium payment term is 10, 15 or 20 years.
If the policy has lapsed, then it does not qualify to receive any benefit just like other Bajaj Allianz child plans. If the death of the life assured is during the grace period, then the sum assured is paid after deducting the outstanding premiums. The outstanding premium payable will also consider any cashback benefit that came about during the period.
Cash Back Benefits
Provided the policy has not been terminated, the company will pay cashback benefits. Cashback benefit is only received if all the premiums have been paid till the date of cashback benefit. If the company has declared any cash bonus, then it will be paid from the 6th policy year onwards till the insured attains 99 years of age.
On the maturity date of the policy, if the policy has not been terminated, the company pays the maturity benefit. This benefit is only paid if all premiums have been paid up till the date of maturity of the policy. On the date of maturity, if all conditions have been met, then the sum assured, along with any cash benefit is paid out similar to other Bajaj Allianz child plans.
The policy can be surrendered any time after the policyholder has paid 2 years full premium. The surrender benefit calculation has two components - guaranteed surrender value and special surrender value. The higher of these will be paid. Guaranteed surrender value is calculated as a proportion of premiums that have been paid minus the total of all guaranteed cash backs paid. Premiums for additional rider benefits and extra premiums paid will be excluded from calculating surrender benefit. The special surrender value will be as determined by the company from time to time.
Cash Bonus and Terminal Bonus
The company carries out valuation annually. At the conclusion of the financial year, bonuses may be declared for participating policies.
A cash bonus is a percentage of the sum assured. It is paid from the 6th policy year onwards. A terminal bonus is given if the policy has acquired 10 policy years. Terminal bonus is declared after an evaluation or payable as part of death or maturity benefit.
There are also additional rider benefits. If it is specified in the schedule shall be paid after being subject to terms, conditions and exclusions.
Free Look-in Period
The free look-in period for Bajaj Allianz child plans is 15 days, and in the case of electronic policy, it is 30 days. During this time, the policyholder can review the policy. If the policyholder disagrees with any terms and conditions, the policyholder can return and cancel the policy. The insurer refunds the amount that comprises of premium paid minus the risk premium and rider risk premium and also the expenses borne by the company.
Forfeiture of Policy or Non-payment of Regular Premium
- Before the expiry of the grace period, if the regular outstanding premiums have not been paid, the policy is subject to the following conditions.
- If for the first two policy years the premiums have not been paid, the policy along with any rider is automatically transitioned into a lapsed policy at the conclusion of the grace period.
- If regular premiums have been paid during the first two years, and subsequent premiums are not paid, the policy will be converted into a paid-up policy with a reduced sum assured.
- If five policy year premiums have been paid and subsequent premiums are not paid, then the cashback terms and conditions change.
A policy can attain early termination value. This value is applied if the policy is more than a year old and all premiums have been paid, but two full-year premiums are pending. The early termination value is calculated as 11% of all premiums paid. The early termination value is paid the only request. The request is made by the policyholder. It usually happens on the death of the policyholder or the expiry of the revival period.
A lapsed or paid-up policy due to non-payment of premium can be revived by the policyholder. The policyholder has to make an application for the revival of Bajaj Allianz child plans and should be received by the insurer during the revival period. Regular premium arrears and prevailing charges are applied. Based on the discretion of the insurer the life assured should furnish satisfactory evidence of individual health. The insurer reserves the right to refuse the revival and refund the money deposited towards revival. On revival, the sum assured that was prevailing before the lapse or paid-up status of the policy is reinstated.
Payment of Claim
The insurer is not obligated to make any payment unless the insurer has received a communication from the nominee, legal heirs or concerned party with 180 days of the death of the life assured about the event of death. The claimant should furnish proof of entitlement to the insurer or as required by the insurer for payment of the sum assured death benefit to the claimant. The original policy document should be furnished upon request. The original death certification of the life assured may be required, where the certificate has been issued by a competent authority. A medical cause of death certificate may be required to be issued by the doctor. If the death is due to unnatural causes, then a First Information Report (FIR) and Post Mortem Report (PMR) would be required.
Child Education Investment Plan - Bajaj Allianz Young Assure
The Bajaj Allianz Young Assure plan is designed to fulfil the aspirations of children. If started early, the benefits of the plan can be enjoyed earlier. Not only are the fruits of long-term investment yielded faster, but a milestone of children are tended to at the right time. Being a traditional, participating plan, it is eligible for receiving bonuses and cash payouts.
Key Advantages of the Child Education Investment Plan - Bajaj Allianz Young Assure
The following are the key advantages of the child education investment plan by Bajaj Allianz Young Assure:
- Guaranteed maturity benefit and additions
- At the maturity of the policy, the guaranteed maturity benefit is paid out along with the guaranteed additions. The amount paid up is up to 90% of the guaranteed maturity benefit.
- The vested bonus is paid on maturity of the policy in Bajaj Allianz child plans. If any terminal bonus is applicable, it is paid along as well.
- Three cash installment options
- Maturity benefit can be received over 3, 5, or 7 years depending on the milestones of the child’s educational requirements.
Comprehensive Coverage of Child Education Investment Plan - Bajaj Allianz Young Assure
In case of death of the policyholder, the nominee receives the higher sum assured or guaranteed maturity benefit. The payment is made immediately. The policy is covered in a fully paid-up policy. It continues to accumulate guaranteed additions until the maturity of the policy.
Multiple Rider Benefits of Child Education Investment Plan - Bajaj Allianz Young Assure
There are five rider benefits to choose from in Bajaj Allianz child plans to enhance the life insurance coverage at a very nominal extra cost. The riders are namely, death benefit rider, accidental permanent total, partial disability benefit rider, and critical illness benefit rider.
Multiple Premium Payment and Policy Terms
There are three options for premium payment terms available - 10, 15, and 20.
|Entry age||Min age is 18 years||Max age is 50 years|
|Maturity age||Min age is 28 years||Max age is 60 years|
|Guaranteed maturity benefit||Minimum Rs. 1 Lakh||Max as per board approved underwriting policy|
|Sum assured||10 annualized premium|
|Premium payment frequency||Annual, half-yearly, quarterly, monthly|
Premium Payment Term
|Policy term||Premium paying term|
Policy Benefits of Child Education Investment Plan - Bajaj Allianz Young Assure
The following are the key benefits offered under the child education investment plan - Bajaj Allianz Young Assure:
Due to the unfortunate death of the policyholder before the maturity date, and if the policy has not been terminated, the insurer pays the nominee the death benefit in Bajaj Allianz child plans. The condition for this is that the policy should be in force on the date of death. All regular premiums should have been paid in full. The minimum death benefit received is dependent on the guaranteed death benefit. All regular premiums due in the policy are waived. The policy continues until the maturity date. Future reversionary bonus (if any), terminal bonus (if any), and guaranteed addition is applied to the policy on their due dates. If the policy has lapsed previously, and if it is a paid-up policy, then death benefit is the paid-up sum assured.
On the policy maturity date, if the policy is in force, and all regular premiums have been paid, the maturity benefit is paid. It is the addition of guaranteed addition, guaranteed maturity benefit, vested bonus, interim bonus, and terminal bonus. If the policy has lapsed, then it does not qualify for maturity benefit. Maturity benefit is paid over 3, 5, 7 years as depicted in the following table.
Cash installment option Annual Installment in Year 2 3 4 5 6 7 Option 1(3 years) 50% 55% Option 2 (5 years) 22% 25% 28% 34% Option 3 (7 years) 12% 15% 18% 20% 23% 25%
At the end of the policy term, the guaranteed addition is attached to the policy. It is expressed as a percentage of the guaranteed maturity benefit as depicted in the following figure:
PPT (in years) 5 7 12 15 20 GA% 15% 25% 40% 60% 90%
At the end of each financial year, the company carries out annual valuation and provides the following bonuses:
Compound Reversionary Bonus - This bonus is expressed as a percentage of the guaranteed maturity benefit. It determines the amount of reversionary bonus. At the end of the financial year, the compound reversionary bonus is added.
Interim Bonus - Before the declaration of the valuation results, or in the event of the death of the policyholder or upon maturity of the policy, the company pays an interim bonus. The amount is as decided by the company, which is generally a proportion to the premium paid in the financial year.
Terminal Bonus - The terminal bonus for Bajaj Allianz child plans is applicable only if the policy has completed ten policy years and all due premiums have been paid. The terminal bonus is a percentage of the guaranteed maturity benefit.
Foreclosure - If there is an existing loan under the policy or if the policy is paid-up, and if at any time if the outstanding loan exceeds the surrender benefit on the policy, the policy is automatically and immediately closed. Sufficient notice is given, and no benefit will be available under the policy.
If the policy has not been terminated, the policy will continue to acquire surrender benefit. The policyholder can surrender the policy anytime. The requirement to surrender the policy is that a full year’s premium has been paid where the premium payment term is less than 10 years or at least 2 full years premium has been paid under the policy with the premium payment term greater than or equal to 10 years.
The higher the guaranteed surrender value or the special surrender value is the surrender benefit payable. The guaranteed surrendered value is a proportion of the regular premiums paid. The table below indicates the guaranteed surrender value payment.
Surrender year of the policy The proportion of the total premiums paid to date PT = 10 years (PPT = 5,7 years) PT = 15 years (PPT = 12, 15 years) PT = 20 years (PPT = 12,15, 20 years) 1 10% 2 30% 30% 30% 3 35% 35% 35% 4 to 7 50% 50% 50% 8 70% 55% 53% 9 90% 61% 56% 10 90% 67% 60% 11 72% 63% 12 78% 66% 13 84% 70% 14 90% 73% 15 90% 76% 16 80% 17 83% 18 86% 19 90% 20 90%
Alteration of Premium Payment Frequency
The premium payment term can be changed at any time provided all existing premiums have been paid.
Maturity Benefit in a Lump sum
The policyholder has the option to take maturity benefit as a lump sum, which includes a terminal bonus. This has to be informed to the insurer at least 90 days before the maturity date.
Policy Loans of Child Education Investment Plan - Bajaj Allianz Young Assure
A future loan can be taken under the policy, only if the policy has acquired surrender benefit. The maximum amount of loan that can be taken is 90% in Bajaj Allianz child plans of the surrender benefit amount available. The rate of interest on the loan is decided by the company and as regulated by IRDAI. Currently, the average loan interest rate is 8% per annum. The policyholder can pay part or full amount of interest on the loan at any time during the policy term. During the subsistence of the loan if surrender or policy maturity takes place, then any loan outstanding is recovered as on the date of surrender or maturity date, whichever comes earlier.
In case a loan is outstanding on maturity benefit, then the outstanding loan is deducted from the guaranteed addition, vested bonus, interim bonus, and guaranteed maturity benefit. The remaining guaranteed maturity benefit is paid in annual installments from the second year from the maturity date.
Exclusions of Child Education Investment Plan - Bajaj Allianz Young Assure
The following are the key exclusions of the child investment plan - Bajaj Allianz Young Assure:
If within 12 months the life assured takes his or her life, then the claimant will receive 80 per cent of the surrender benefit or total premiums paid, whichever is higher. The policy should be in force for this.
Termination Conditions for the Policy
The policy terminates on surrender of the policy on receipt of valid documents in this regard. The policy also terminates on the expiry of the revival period, which is of the duration of 5 years. On foreclosure, the policy is terminated, if the outstanding loan amount is greater than or equal to the surrender benefit.
In case of any query or complaint, the grievance office may be contacted. The officer is available at any customer care centre at the nearest branch office. Alternatively, the company can be contacted by postal mail. In case of dissatisfaction with the issue redressal, the ombudsman can be contacted. This ombudsman is usually contacted in case of delay in settlement claim, partial or total repudiation of claims, obscurities over premium paid or payable, misrepresentation of terms and conditions of the policy, non-issuance of the policy even after the receipt of premium.
The complaints can not only be made by the policyholder but by also the claimants and the legal heirs of the policy. Supporting documents, name and address of the complainant, name of the office or branch, and any other detail required by the ombudsman has to be provided.
Bajaj Allianz Child Plans - FAQs
Ans. Bajaj Allianz child plans can be purchased immediately after the birth of your child. This is probably the best time to buy a plan because, by the time the child goes to college, there is a large sum of money to rely on to fund the child’s educational expenses. So in effect, the sooner you buy a child plan for your child, the better it is. This is because you give the fund to benefit from the compounding interest accumulated every year.
Ans. If both parents are working, then the parents can decide who the primary earning parent is. It could be the husband or the wife. Once this is decided, the primary earning parent can then buy the child plan.
Ans. The term of the policy depends on the child’s current age and the span of time by which they will start to require money.
Q4. What is the difference between paid-up sum assured on death versus paid-up sum assured on maturity?
Ans. Paid-up sum assured on death is the reduced amount or value of the assured sum on the death of the premium payer. This value is determined by multiplying the assured sum on death with the number of regular premiums that have already been paid to the number of premiums remaining to be paid.
Paid-up sum assured on maturity is relevant if on the first three years the premiums were paid on time but subsequent premiums were not paid. At this time, the policy will automatically be converted into a paid-up policy similar to other Bajaj Allianz child plans, but not until the expiry of the grace period.