Child Life Insurance Plans: Myths Vs. Reality
Updated On Jul 31, 2021
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Your child/children's happiness means the world to you and you every bit to give them the happiness they deserve. Providing them comfort, education, quality lifestyle, etc. are some of the things that you do for them. But what you may neglect sometimes is to give a considerable thought to how they will manage finances in case we are not around. Not only this, but the rising cost of education may also make you stressed for the future. Here comes into the scene a reliable child life insurance plan that offers you complete financial protection for the future of your child.
There are several child life insurance plans in the market but the misconceptions surrounding them are also not less. So, before you plan to buy any of them, let us discuss some myths and the reality behind them so that you are able to make an informed buying decision.
1. Child life insurance policy only covers the child’s life
Reality: Most child life insurance plans insure the life of the income-earning parent instead of the child. The benefits offered are such that the child’s dreams can be fulfilled with them even when the parents are not there.
2. Death benefit is paid out as lump sum on death of the insured parent and does not take care of child’s future needs
Reality: Many child life plans come with features like Family Income Benefit that make sure to pay periodic payments to the family (apart from lump sum paid on death) so that the educational requirements of the child can be taken care of.
3. Inflation is not considered in child plans. Hence, the payouts will not be sufficient to cover tuition for the child.
Reality: Market linked child life plans invest your money in a fund of your choice to generate higher returns. Some plans offer Guaranteed Loyalty Additions and a certain percentage of fund value is added to your investment fund on an annual basis, on completing certain years. These features give you higher growth.
4. If investing in child plans, your money will get blocked for a complete policy term and cannot be partially withdrawn.
Reality: Child plans are flexible. In a market-linked plan, you can make partial withdrawals on completing a term of 5 years.
5. Child plans are not very transparent.
Reality: A market-linked child plan has all the features clearly mentioned. You get documents and regular statements of holdings which allow you to monitor the amount invested.
When it comes to buying a child life insurance plan, you should not go by hearsay. Instead, you can talk to the customer care executives at InsuranceDekho and get your queries solved. They will not only help you clear your doubts, but also help you to buy the most suitable child life insurance plan online without any hassle.
Also Read: How to Choose the Best Child Insurance Plan?
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.