You cannot switch from traditional term plan to e-term plan

What are the factors I should look at before buying a child policy? What should be the sum assured of the policy as my son is five years old?

P N Rao

A child policy is a combination of insurance and investment. The return in case of child endowment policies is not more than 7-8%. In a linked child policy, the return is linked to the market return on debt or equity, depending on the option chosen.

In a child policy, the life assured is the parent. The premium waiver rider is available invariably in all child policies, in which case the future premiums are waived in case of the demise of the life assured. It is advisable to separate insurance and investment. You can take a term policy with waiver of premium rider and invest in mutual funds to maximise benefit and return. The sum assured will depend on the future cost of need of the child— education, marriage, etc.

How do deductibles work in health insurance policy?

Swapna Choudhary

In an insurance policy, the deductible is the amount of expenses that must be paid out of one’s pocket. The balance is paid by the insurer in case of a claim. The policy becomes cheaper if deductibles are opted for.

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