The recently launched Kotak Headstart Child Plan is designed to help parents save money for the long-term financial needs of their children. It has two variants: Future Protect and Assure Wealth. The life insured in both versions is the parent and the beneficiary is the child.
Features
In both the variants, one needs to first decide on the amount to be saved regularly and the term of the plan. The minimum cover in both the cases is the higher of (a) five times the annual premium and (b) half the number of years of the policy term multiplied by the annual premium. The difference between the two options is in the death benefit. In Future Protect, the entire sum assured is paid as a lump sum upon the death of the parent. In addition, the insurer also pays the nominees a sum equal to the premium amount multiplied by the number of outstanding premiums. For instance, if a person who has a 20-year plan with an annual premium of Rs 50,000 dies in the fifth year, his nominees will be paid Rs 7.50 lakh (Rs 50,000 x 15) in addition to the sum assured. The nominees can also choose to take this amount in equal instalments payable semi-annually over the next five years.
In the Assure Wealth option, the higher of the sum assured and the fund value is paid to the nominees when the insured dies and the plan ends. On maturity, the insured gets the sum assured in both the variantseither as a lump sum, or in pre-specified instalments over five years, or as a mix of the two.
You can choose among seven fund options with varying degrees of equity exposure. The Dynamic Floor Fund option would suit those who are not good at switching funds as it would automatically try to maximise equity exposure in bull markets, and actively trim it to limit the downside risk in falling markets.
Plan continuityYour policy will continue even if you stop