Limitations

None of the policies offer life cover to the beneficiary (child) for whose benefit the policies are apparently made. Many policies contain a list of charges (given below) that are deducted from the premium, thereby partially reducing the growth of the fund proportionately.

Premium allocation charge

Fund management charge

Policy administration charge

Mortality charge

Surrender/discontinuance charge

Switch charge

Premium redirection charge

Partial withdrawal charge Wherever ‘surrender value’ is offered after five years, policies offer partial withdrawals but no loans are allowed.

Where surrender value is available after three years, partial withdrawals are not allowed but loans are allowed. Death benefit to the proposer is given up to 105 per cent of the basic sum assured in most of the policies.