Child Insurance Plan And Key Things To Know About It
Published On Sep 10, 2021 11:00 AM By InsuranceDekho
Table of Contents
Child Plans are a means for you to financially plan for your child's better future and the more you can help your child in achieving their ambitions and excelling in their life, the better. These plans provide long-term investment opportunities, allowing you to save for your kid until they reach the age of independence or adulthood, or even later, depending on the tenure you choose. It not only guarantees you assured returns on all investments, but it also protects your kid with life insurance during difficult circumstances. Child plan elements not only seek to fulfill a child's goals, but also benefit parents through tax savings (as per current tax rules), increased wealth, and so on. Few investments ensure that your child's aspirations are met regardless of circumstances. Before you pick an investing product, you should consider the following.
Key Characteristics of Child Insurance Plans
Before purchasing a plan, you should be aware of certain essential aspects of the Child Insurance Plan. Here are a few examples:
1. A Wide Range of Advantages
Child plans assist you in establishing an investing corpus for your child's education. These plans also have several additional advantages. Some Child Plans allow you to take a portion of the funds to aid with a financial emergency.
Must Read: Should Parents Invest in Child Insurance Policy?
2. Varieties of Child Plans Are Available
Regular Premium Child Plans, Single Premium Child Plans, Unit-Linked Insurance Plans (ULIP), and Endowment Plans are the many types of Child Plans offered.
3. Optional Pay-Out
Child insurance policies provide you the option of choosing between two types of payouts: lump sum and regular. A lump-sum payment provides you with a significant quantity of money all at once to help your child achieve major long-term goals.
4. Important Considerations Before Purchasing
Before acquiring the plan, look for a waiver of the premium, partial withdrawals, and other accessible and essential advantages, as well as thoroughly reading the paperwork.
5. Children's Fund
Child insurance policies allow you to set up a fund for your child. This fund allows your child to receive recurring payments of a certain amount of money. This is useful in supporting your child's numerous life milestones.
6. Consistent Investments
Child insurance policies also assist parents in developing sound financial habits. You may amass a sizable corpus for your child by putting down a certain amount of money monthly. In the case of Child ULIPs, you can even select the investment fund. Your consistent investments in the present will benefit your child in the long run.
7. Premium Benefit Waiver
Kid Life Insurance policies typically include a ‘Waiver of Premium' benefit, which states that if the life guaranteed, i.e. the parent of the child, dies during the policy term, all future payable premiums are waived and the policy continues. In this manner, you can ensure that your child has adequate financial means to achieve their objectives. Investing in the present will benefit your child in the long run.
8. Great Profits
Child insurance policies provide excellent returns on investment. You can ensure that your child receives a high return on investment by saving. The premiums are accumulated to pay out a significant sum in the future.
Child insurance policies are thus the most effective approach to contribute to your child's financial security. Even if you are no longer available to them, the insurance policy will protect their financial interests. Small savings in the present compound into large advantages in the future
Also Read: How to Save for the Higher Education of Your Child?
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.