The state insurer, Life Insurance Corporation of India (LIC) launched two children plans-Child Career Plan and Child Future Plan on February 8 2007.
These two plans are MoneyBack With-Profit plans and are designed to meet the increasing educational needs and events like marriage, which require monetary assist.

The plans provide risk cover on the life of the child not only during the policy term but also during the ‘Extended Term’ i.e. 7 years after the expiry of the policy term. Its other features include ‘Auto Cover’, which continues to provide death cover for a period of 2 years in case of policyholders who have not made their premium payments. But for the Auto Cover feature to be functional, the policyholders should have paid the premiums for atleast two years. Apart from this, the plan has other features like Premium Waiver Benefit, which is available on the payment of an additional premium. The minimum and maximum age of entry under this plan are 0 years and 12 years respectively. The minimum sum assured under this plan is Rs. 1 lakh and the maximum limit set is Rs. 1 crore.

This plan can be purchased for a male or a female child. But ideally, Child Career Plan is best suited for the male child and the Child Future Plan for the female child.

In the detariffed regime, the Tariff Advisory Committee (TAC) will function as an advisory body for tariffs. Its recommendations will not be compulsory to abide by. As far as insurers are concerned, they will now have more freedom in terms of pricing. This new move in the general insurance sector is expected to pull down the cost of fire and engineering products by 20-25%. The cross-subsidisation, which was very much a part of the tariff regime, is also expected to reduce sharply. Usually when Corporates opt for insurance products; through cross subsidisation, motor insurance or any other insurance product is negotiated at a low price with other high budgeted products.

As far as ‘motor own damage’ is concerned, insurers are giving out a discount of 15-20% on it and around 20-30% on fire insurance. For example, if an individual’s premium for ‘motor own damage’ were Rs. 1000, the individual would be getting a discount of 20-30% on it as per the revised prices under detariffing regime. However, the liability would increase with the third party motor premiums. Understanding the intensity of the situation, IRDA has introduced ‘motor pool’ in which the insurers would share the risks. This ‘motor pool’ will comprise of all non-life insurers and would be managed by General Insurance Corporation (GIC). It functions by the model in which all motor third-party premiums collected by every insurer goes into this pool and the claims arising would be fulfilled through it. An insurer’s usage of this pool will be subject to its overall market share.

Fundamentally, the motor insurance is priced on the RFRS (risk factor rating system) model, which is used overseas. The premiums are based on factors like vehicle, driver, location and extent of use, occupation, accident repair cost, liability, etc. With detariffing, the rating of the products would be based on the risk profile of the customer; for instance, a car owner with no claims financially supports the one who makes large claims or in other words, the car owner with no claim record would pay less premiums compared to the one who has had a claim year. In the detariffed regime, car owners with a good track record will be at a gain. But the unfortunate ones who have already had a claim year may have to pay higher premiums while renewing it in the following year. Lets say, Mr. Desai owns a four-wheeler and he uses it only for commuting to office and back home and on the other hand, we have Mr. Vittal who is a cab driver. In this case, the latter, Mr. Vittal would be paying more premium because the usage of vehicle increases in his case. The inference of detariffing is that the premium charges will be influenced by factors such as age, experience and even educational qualification. This will help in determining how much risk an individual is willing to take. And the premium charged will differ in line with the vehicles’ make and usage. All the same, the owners of Vintage cars will have to pay more premiums because of the higher risks involved. And as far as commercial vehicles are concerned, the third party liability would also shoot up sharply.

In a nutshell, detariffing has its own advantages and disadvantages. While on some issues such as motor own damage, premiums are expected to reduce; its outgo would increase with commercial vehicles. This may also call for more capital infusion for private insurance companies who are in tie-up with their foreign partners.

Here’s an example. Mr. and Mrs. Patel had been out on a vacation, which ran into a one whole month. Though this much needed vacation was more than anything that each family member longer for, the return back to home proved nothing but a complete disaster. On returning, they found their home as barren as a desert. It took only a few minutes for Mr. Patel to realise that a theft had taken place in the house. It was a feeling of despair but the emotions came to closer to happiness for he had insured his home. But the situation was graver than he had anticipated when his insurance advisor informed that the policy becomes inapplicable if the house remains unoccupied for a certain number of days. This was something that Mr. Patel was not expecting at all. He like the most of them paid less heed to the fine print of the policy documents before signing on the dotted line. Hence, a word of caution, a little detail study proves immensely helpful before you make your wallet thinner.

Getting back to the topic, according to the policy principles, if the house remains unoccupied for certain number of days, the risk cover becomes void. So if you are vacationing with your family members and the absence in the house has exceeded let’s say for over a month, you are no longer eligible to get the insured amount in case a theft takes place. The number of days that limit the insurance cover differs from insurer to insurer.

Essentially, there are two types of householder’s policy-one that protects your house from losses due to fire and the other is that protects the valuables of your house. The individual is free to choose the cover that best suits his requirements.

Though the need to have insurance cover when you are not around is doubled, insurers believe that the risk of burglary or theft also increases in the bargain. This is why they do not offer insurance protection when your home remains unoccupied for a certain number of days. So, what can you do ensure complete protection of the house in your absence? The first and the foremost thing that you should do is to inform your insurance company about the vacation plans well in advance. Inform them of other preventive measures taken by you such as burglary and fire alarm facility, etc. In such a case, the insurer may make a personal visit to check if the precautions made are enough to prevent a burglary from taking place. This would atleast lessen your burden largely.

Just take a little more effort towards protecting your home and you can spare yourself from unpleasant situations.

Direct investments in stocks require acumen and expertise knowledge of the market and if you think you lack that kind of knowledge, you can go via mutual fund route, which is managed by the fund manager. The fund manager is one who manages all the monies invested by the investors to give reasonable benefits. This side of the story belongs to mutual funds. As an investor if you are looking at getting your risks covered and a good deal of amount in return, Unit Linked Insurance Plan (ULIP) would be your best bet, an alluring opportunity that can sail you through your investment regime. Just to get your basics clear, ULIPs give the investor the chance to stay protected though insurance cover along a portion of the premium amount that can be invested in the stock market as per the fund selected by the investor. ULIPs can be termed as a two-in-one plan because it offers insurance cover along with stock investment choice. This is unlike mutual fund that is purely for investments with no insurance cover. Besides, other reasons like multiple investment options of unit linked plans score over traditional insurance plans. Each individual has a different risk profile, while some allow you to invest rigorously in the equities; options like balanced fund and secured fund set more portion of your premiums towards your insurance cover with the remaining kept for investing in equities.

Another feature that makes ULIP more desirable among investors is its flexibility in terms of its ‘switching’ feature, which is not available in mutual funds. The switching feature allows the investor to switch between the funds that vary between equity and debt funds. Some insurance companies allow a certain number of `free' switches too. So, if the market is performing poorly or brilliantly, you can switch as per the market trend.

The appealing performance of the stock market has attracted many ULIP buyers. If you want the best of both insurance and stock market returns, you don’t need a second thought to take a plunge in it.