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Child Insurance Plans: Myths vs Reality

Published On Nov 29, 2021

Your child's or children's happiness is extremely important to you, and you will go to great lengths to ensure that they receive the happiness they deserve. You provide them with comfort, education, and a high-quality lifestyle, among other things. However, you may overlook the importance of considering how they will manage their cash if we are not present. Furthermore, the rising cost of schooling may cause you to be concerned about the future. A dependable child life insurance plan enters the picture, providing you with total financial safety for your child's future. There are several Child life insurance plans on the market, but there are also many misconceptions about them. So, before you go out and buy any of them, let's talk about some myths and the truth behind them so you can make an informed selection.

5 Common Myths & Facts About Child Insurance Plans

The majority of individuals have a very different perspective on the child plan. The following are five common misconceptions concerning child plans, as well as the facts behind them:

  • A child's life is solely covered by a child's life insurance policy.

Reality: Most Child life insurance policies cover the income-earning parent's life rather than the child's. The advantages provided are such that the child's dreams can be realised even if the parents are not present.

  • The death benefit is paid out in a lump sum when the insured parent dies, and it does not cover the child's future requirements.

Reality: Many child life insurance policies include provisions such as Family Income Benefit, which ensures that recurring payments are made to the family (in addition to a lump sum payout upon death) so that the Child's educational needs are met.

  • Inflation is not taken into account when making Child plans. As a result, the reimbursements will not be sufficient to support the child's tuition.

Reality: To generate higher returns, market linked Child life policies invest your money in a fund of your choice. Some plans offer Guaranteed Loyalty Additions, which increase a particular percentage of fund value to your investment fund on an annual basis when certain years are completed. These characteristics allow you to grow faster.

  • If you invest in Child plans, your money will be locked for the whole policy term and will not be able to be withdrawn in instalments.

Reality: Child plans are flexible in reality. After completing a 5-year term in a market-linked plan, you can make partial withdrawals.

  •  Child plans aren't always clear.

Reality: All of the aspects of a market-linked Child plan are clearly stated. You will receive documentation and frequent holdings statements, allowing you to keep track of your investment.


When it comes to purchasing a child life insurance policy, don't rely on word of mouth. Instead, you can contact InsuranceDekho's customer service representatives and have your questions answered. They will not only clear all your worries, but they will also assist you in purchasing the most appropriate child life insurance plan online without any hassle.

Also read: Mistakes To Avoid When Buying Child Insurance Plan    

5 Key Things You Should Know About Child Insurance

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.

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