Aegon Religare’s Rising Star Plan | Child Ulip
Child Ulips benefits by securing children’s financial security in parents’ absence. The newer versions of Ulips are relatively more investor-friendly – the lower charges mean more money in the policyholder’s hands.
Aegon Religare Life Insurance has launched a child Ulip called Rising Star Plan under the new regime. This child plans, offers many features including premium waiver and income benefit riders.
The plan offers 4 funds –
- Secure,
- Debt,
- Stable and
- Accelerator.
Be-sides, it also comes with the Invest Protect option, where all premiums are invested in an Accelerator Fund in the initial years of the policy and later switched to stable, secure and debt fund systematically in the last three years of the policy.
Best Feature –
- Highest net yield (expected return minus charges).
Drawback of Child Ulip according to financial planners –
- Ulips are not necessarily the ideal avenue for securing your child’s future, primarily due to the charges, which continue to be high despite the ceiling on charges.
Explanation: With the help of an example –
A term insurance cover coupled with SIPs in a diversified equity mutual fund is likely to do the job better. For instance, under this product, the policy administration charges amount to Rs 60/month, and start increasing by 3% every year, second year onwards. The only advantage that child plans may have over this combination is that thanks to the premium-waiver rider, the company continues to pay the premium in the event of the parent’s demise, resulting in the fund value on maturity benefiting from the power of compounding.
The minimum yearly premium payable under this plan is Rs 20,000 in the annual mode. The minimum age of entry for the parent is 18 years (1 day for the child beneficiary), with 60 years (15 years for the child) being the upper limit. The minimum cover, depending on the parent’s age at entry, is 7-10 times the annual premium, while the maximum is 30 times the amount.
Advantage:
- Offers all features of a typical child plan, in addition to accidental death and disability as well as critical illness riders.
Disadvantage:
- A combination of term insurance and SIP in an equity diversified fund remains a better bet.
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