Compare & Buy Car, Bike and Health Insurance Online - InsuranceDekho
Claim, renew, manage & moreLogin

Top 5 Child Insurance Plan Myths Busted

Updated On Sep 21, 2021

Being a parent is one of the most amazing experiences a couple can have. It is claimed that the birth of an infant results in the birth of both a mother and a father. Parenthood is a turning point in their lives, with new responsibilities to meet as parents. A parent's first concern is to ensure that their child receives financial assistance from his or her parents to pursue his or her ambitions and aspirations. Life insurance kid plans are an excellent method to ensure that your child achieves his or her objectives and has financial resources even if you are not around. Most parents are hesitant to spend their money on a kid’s plan, but a child insurance policy may be an excellent way to provide some financial protection for the child. Here are some popular fallacies about kid insurance that have been busted.

Common Myths About Child Insurance Busted

The following points attempt to dispel myths and give a fact check for more informed and responsible decision-making:

MYTH 1: Child Insurance Only Covers the Child.

The most common misunderstanding about kid insurance is that the life cover is a child. The income-earning parent is often designated as the life-insured parent, with the kid as the beneficiary. The benefit of such a policy is that the child's wants are met even when the adult is not there.

Must Read: Savings And Investment Tips For Education Of Your Child

MYTH 2: The Policy Only Pays a Lump Sum Death Benefit.

It is assumed that if the parent dies unexpectedly, the lump sum will be paid as an insurance death benefit and the policy would be canceled. A child's policy's basic essence and attraction are that it includes a Rider Fee Waiver. If the spouse dies before the program, the prospective premiums are forgiven and the program continues. This has no bearing on the incentives that will be provided under the plan when it matures. This is a clever approach to assure that, in the event of the policyholder's death, the family will not be burdened with financial obligations.

MYTH 3:Children's Plans Do Not Provide Liquidity

Child policies are adaptable. These programs are offered in the form of traditional/money-back policies as well as ULIPs. Annual bonuses in traditional/money-back plans shall be given at predetermined intervals in line with the milestones established in this policy. The ULIP, on the other hand, gives users the freedom to cancel after 5 years for any costs paid for the infant's schooling or any other child dependant expenses.

MYTH 4: Child Care Plans are not Completely Transparent.

All expenses are fully revealed in ULIPs, which are market-linked child plans, to give the policyholder responsibility. These fees might apply to fund management, administration, and mortality. The policy statement details the various costs as well as the value of the premium invested. As a result, the policyholder receives a monthly account of your assets that may be followed regularly.

MYTH 5: Child Plan Benefits Can Only Be Used For Higher Education

The utilization of the plan's incentives is not restricted under child insurance coverage. When the policy's benefits are paid out, it is totally up to you to decide whether or not to spend the cash at the end of the day. If your kid does not desire to pursue further education, or if you wish to utilize the funds for any other purpose, you will do so regardless of the original aim.


The information provided here is meant to dispel common misconceptions regarding child insurance. So think about the facts and make informed decisions regarding your children's future. Consider the twin advantages of a child policy.

Also Read: Top 3 Child Education Plans In India

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.

Popularly Opted Term Insurance Sum Assured

People Also Read

Must BuyMust Buy

Why to Buy Life Insurance Policy Online from InsuranceDekho

  • Tax benefit upto 1,50,000*
  • Claim support everyday 10AM-7PM
  • 66 Lacs+ happy customers