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Some Myths About Child Plans You Shouldn't Believe

Published On Dec 09, 2021

Child insurance plans are life insurance policies that are meant to help your child build a secure financial future. If the parent dies during the policy's term, the plan's premium waiver benefit kicks in, and future payments are waived. As a result, the plan, with or without the participation of the parents, generates a solid corpus and is an excellent financial instrument for your child's future. As beneficial as the strategy may be, it is riddled with misconceptions. The majority of us are unaware of the finer points of Child planning and hence have preconceived opinions. These misconceptions keep you from purchasing a Child plan. Here are some frequent and popular child-planning misconceptions and their truths.

Myths about the Child's Insurance Plan

The following points dispel common misconceptions and give a reality check for better decision-making.

Myth #1: It is only available for children.

A child insurance plan, like any other type of insurance, covers the person who earns money. The strategy ensures that a child's hopes and aspirations are never shattered, even if there is no income-earning parent. You may also use the insurance to meet other financial goals like asset accumulation and retirement planning.

Myth #2: It's only healthy if it's healthy for you. When Does the Child Begin Post-Secondary Education?

This myth is common because most parents want to provide their children the greatest child education plan possible to help them reach their educational goals. As a result, when your child turns 18, you'll receive a lump-sum payment. This is the point at which he or she will start undergraduate studies at a university. You may, for example, put the money toward your child's hobbies, business initiatives, or even marriage.

Myth #3: The Policy Will End If the Policyholder Passes Away.

The truth is that you are in total command. You can choose this option at the time of purchase if you want the plan to continue and meet the financial goal. If you select this option, sometimes referred to as "Premium Protection," the insurer will continue to invest in your policy. As a result, in the event that a parent (policyholder) died unexpectedly, the family would get the Sum Assured and the policy would continue. Future premium payments would be waived.

Myth #4: It may not be able to meet future school expenditures due to inflation.

You have a range of Child plans to pick from, some of which also let you invest in equity funds. Equity is a high-risk, high-reward investment that has the potential to outpace inflation.

Myth #5: Death Benefits are Only Paid in Lump Sums 

Milestone-based payouts are authorized even after a parent's untimely death, and partial withdrawals are allowed. When an individual passes away, the Sum Assured is paid out. Future premium payments will be waived to alleviate the family of financial stress. At the conclusion of the time period, the family would get the fund's worth.


If you believe any of these beliefs, it's time to face reality. Child plans are the only way to ensure that your child has a secure future even if you die early. So, if you're a parent, educate yourself on the benefits of a Child plan and enroll. A well-informed decision must be made. Child plans are quite important, and you should thoroughly research them before purchasing one. A wise investment decision today can benefit your child in the future in a variety of ways.

You may also like to read - Child Insurance Plans - Are They Worth It?

Investment Options To Secure You Child's Future

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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