What Is The Value Of A Child's Life Plan?
Updated On Jun 22, 2022
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A child-insurance plan secures the life of those who depend upon you financially and parents opt for child-insurance plans in order to protect their child’s insurability. After Covid-19 pandemic, life has become highly unpredictable and it is necessary now to take up immediate steps to even insure the life of a child.
What Exactly Are Child Life-Insurance Plans?
In child life-insurance plans, the policyholder is the parent or the guardian but the life of the child is insured. The policyholder is the one who pays the premium(in most cases , it is the parent or the guardian). The policyholder is also the beneficiary who would be receiving the death benefits if in case the child dies.
On What Grounds Does The Value Of A Child Life Insurance Plan Depend Upon
The value of a child life insurance depends from person -to- person and also it varies according to the pros and cons that are also subjective to a person’s expectations.
This article will be listing all the aspects of a child life insurance plan which will assist you in deciding whether to take up this plan or not.
Benefits of Life Insurance Policy
Life insurance policies for children provide lifelong coverage as long as the premiums are paid. Premiums are guaranteed so fluctuations in them have negligible chances. A portion of the premium goes toward building cash value,which provides survival benefits when the child is alive.
When Can The Policy Be Bought?
A term-insurance policy cannot be taken up for a child which covers only a certain number of years.Buying a child life insurance policy is relatively easier to buy as compared to as in case of adults. The filling of an application is enough for buying a child-insurance policy but in case of adults, other formalities such as exams are also needed in some cases.
Life insurance for a child who is age 17 or younger is bought in most cases and the coverage remains intact throughout the child’s life, as long as the premiums are paid.
Transferable Policy
As the policyholder of the child’s policy, the policy holder can transfer the policy to the child at any time. Parents tend to transfer policies to their children once they’re matured enough and let them take over premium payments.
The Cost Of Child Insurance
The price of the policy is directly proportional to the age of the child i.e., The younger your child is when you buy a policy, the cheaper it will be.
The amount you pay also will be affected by the amount of coverage you buy. And it can also be affected by the type of payment schedule chosen. If you stretch out the payment schedule further, the premium will also be lower.
On the other hand, the insurer might offer the option to pay off a policy within a certain number of years rather than throughout the life of the child. The shorter the payment period, the higher the premium will be and it can be considered as an option to turn over a policy that’s already paid off to your child.
Conclusion
The value depends on the way you think and the way you prioritize the funds and finances of your family. Keeping the above pros and cons in mind, the value can be thought of and the decision of buying it or not can also be influenced.
Also Read: A Guide To Term Insurance Riders
