Top Child Insurance Myths Busted
Published On Jan 09, 2022 10:00 AM By InsuranceDekho
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Being a parent is one of the most incredible experiences a couple can go through. According to popular belief, the birth of newborn results in the birth of both a mother and a father. Parenthood is a watershed moment in their life, with new duties to deal with as parents. The primary priority of a parent is to guarantee that their child receives financial support from his or her parents in order to achieve his or her objectives and aspirations. Life insurance for children is a wonderful way to ensure that your child reaches his or her goals and has financial resources even if you are not around. Most parents are hesitant to spend money on a child's plan, yet it may be a great way to offer some financial security for the youngster. Here are some common misconceptions concerning child insurance that have been debunked.
Common Myths About Child Insurance Debunked
The following points try to dispel myths and give a fact check for more informed and responsible decision-making: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.
MYTH 1: Child insurance only covers the child.
The most common misperception about Child plans is that the life cover is a child. The income-earning parent is often designated as the life-insured parent, with the Child as the beneficiary. The benefit of such a policy is that the child's wants are met even when the adult is not around.
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 is 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. Along with the lump payment paid immediately after the insured's death, there are other benefits.
MYTH 3:Children's Plans Do Not Provide Liquidity
Child policies are adaptable. These programmes 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 set in this policy. The ULIP, on the other hand, offers users the freedom to cancel after 5 years for any payments paid for the infant's schooling or any other child dependant expenses.
MYTH 4: Child care plans are not completely transparent.
All expenses are openly mentioned 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 summary of your assets that may be followed on a regular basis.
The material presented here is intended to address common myths about child insurance. So consider the facts and make educated judgments about your children's future. Consider the two benefits of a Child policy.
You may also like to read - How Child Plans Help In Ensuring Financial Security?
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.