Birla Sun Life Insurance Children's Dream Plan-Part I

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On request of one of the reader, here comes the review of Birla Sun Life Insurance Children's Dream Plan.

The review will be published in 2 parts, the first part will discuss the special feature of the plan which is unique to it and 2nd part will discuss the regular feature.

This is guaranteed return Child ULIP plan with Money Back facility.

1) Guaranteed maturity Benefit:

Like many other guaranteed return ULIP plans available in the market, this plan too provides a facility of potential upside along with the guaranteed benefit.

Others are:

1) ICICI Pru: Secure Save

2) Reliance Super Invest Assure Plan (RSIP)- Plus

You need to decide on the guaranteed maturity benefit that you would need on the maturity. The same is paid on maturity.

Maturity date would be the year when your child completes 18 years.

If your child is 5 years old then premium payment term will be 13 years.

2) Guaranteed maturity Option:

There are three options available as described in the table.

Child’s Age

100% option

200%

option

300%

option

18

100%

100%

100%

19

20%

25%

20

20%

25%

21

20%

25%

22

20%

25%

23

20%

100%

Total

100%

200%

300%

After maturity a percentage of GMB is paid every year and at the end of 5th year after maturity if fund value is more then guaranteed that too is paid along with the last installment.

3) Additional protection:

Basic Sum assured: The Basic Sum Assured is associated with the Guaranteed Maturity Benefit.(This will comes along with illustration)

One can choose for additional protection, this amount is paid along with the BSA on the death of life assured.

Your Premium amount depends on the above three apart from your age, gender and riders.

Death Benefit:

This is the most significant feature of this plan; it not only pays BSA + Additional protection amount to child (nominee) on the death of life assured but also GMV as promised that means double protection.

For eg: if person dies in between the term child will get BSA + Additional protection amount, from then onwards till the maturity date premium will be paid by insurer and at the age of 18th child will get 100% GMV and then a % of GMV for next five

Years, in addition to that at the time of last installment if there is any potential upside in your fund that will be paid to child this means even if person dies policy will continue with the regular benefit.

In case if child also dies then higher guaranteed fund value or 105% of fund value is paid.

*Fund value is number of unit multiplied by value of one unit.

* Units are allotted to the policy account every time you pay your premium depending on the NAV.

*Guaranteed fund value will be given to you along with illustration.

No Allocation charge:

The third unique part after GMB and death benefit is no allocation charge.

In almost all the ULIP whenever you pay premium allocation charge gets deducted and only net amount is invested, this plan invests 100% of premium you pay (for top-up 2% of premium amount is deducted as Allocation charge).

You directly save a very good amount here which ultimately means allotment of higher number of units which in turn will increase the chances of potential upside

After discussing most significant features of this plan lets see what you will be paying as a premium.

*Use this link for custom illustration.

For person of 25 years age with premium paying term of 14 years (that is child is of age 4), if opt for GMB of Rs. 5,00,000 and additional protection of Rs. 100,000 will need to pay a yearly premium of Rs. 60,650.00, this comes with the BSA of Rs. 582,500.

As described in the table total receivable GM amount is Rs, 10,00,000 + additional upside in the fund value.

Total premium require to be paid is Rs. 8,49,100 (60650 * 14) this gives you a guaranteed benefit of Rs. 1,51,000.

Apart from this you are also eligible for potential upside in your fund value (please visit illustration link to better understand the return.)

Child’s Age

200%

option

18

5,00,000

19

1,00,000

20

1,00,000

21

1,00,000

22

1,00,000

23

1,00,000

Total

10,00,000

Although premium is high policy comes with nice features of GMB, no allocation charge and an enhanced risk cover.

We will discuss other features and condition of the policy like Surrender, partial withdrawal, charges, fund options, switches in the next post.

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