Many people buy education or insurance plans for their children, but most are not aware of a special clause in the policy called “Juvenile Lien”. It normally goes like this:
If the Life Assured sustains Total & Permanent Disability or is diagnosed with Critical Illness before 1st Birthday, 25% of the Sum Assured is used to calculate the amount of benefit payable. After such payment, the Policy terminates.
Though this has become more and more obsolete but you may still want to take note.
What us the rationale behind juvenile lien?
The main reason is for insurer to reduce morale hazard. Because a juvenile is vulnerable and insurer is afraid that the adult may buy insurance and injure the children on purpose in order to claim insurance.
In some countries, the lien can be applied as high as age 5 to 7.