Key Child Insurance Features You Must be Aware Of
Updated On Oct 24, 2021
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Do you think child insurance serves your purpose of securing the future of your child in your absence? Are you ready to buy the best possible child insurance plan for your son or daughter? Well, if looking for the perfect plan to invest in, know that it would be great to understand the key features of a child insurance plan in the first place.
Key Features of Child Insurance Plans
Child insurance plans provide the best of financial securities to make sure that a child does not have to financially depend on any person in the event of the death of their parent. Child insurance policies come with different benefits and features. Some of the key features of child insurance plans that you must be aware of include:
A policyholder can pay a lump sum premium at the beginning of the tenure or in a periodic manner. Most insurance companies come with options like monthly, quarterly, half-yearly, annual that can be credited directly from the bank account of the policyholder. It must be noted that the amount of premium is dependent on maturity and sum assured figures that the policyholder chooses to go with.
2. Sum Assured
The sum assured is the amount that will be paid out to the nominee in case of the policyholders’ demise. Usually, the sum assured should be above 10 times the current gross income of the insured individual.
The tenure for child insurance policies goes up to the age of 18 years or 21 years. The tenure for the child insurance plan can be chosen from birth until the child reaches a predefined age.
A policyholder must choose the maturity amount while keeping the future in mind. For instance, if your child is 8 years old, and the child insurance plan matures in 10 years’ time, then various factors including inflation and interest rates must be kept in consideration. Failure in considering these factors can result in a lower fund amount than required in the future.
5. Segmented Payouts
With child life insurance, a policyholder can select if the child will get payment in the form of a lump sum, or in the form of annual instalments. Such a setting plays a major role in paying dues like college fees, mortgage amounts etc.
6. Premium Waivers
Waiver of premium is one of the key aspects of a child insurance plan. This becomes applicable when the insured dies within the stipulated tenure. If anything unfortunate happens, the beneficiary is given the sum assured, while the premium for the remaining tenure is paid by the insurance company.
Riders or add-on covers bring the best out of the child insurance plans. For instance, the rider for critical illness plays a significant role in providing cover for a set of predefined critical illnesses. Similarly, other riders work as designed. A policyholder can add a rider to their base policy to extend the coverage by paying a small additional premium price.
Having said that, what are you waiting for? Now that you know what to expect from your child insurance, go ahead and buy yours today!
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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.