When is the Right Time to Purchase a Child Life Insurance Plan?
Published On Aug 20, 2021 10:00 AM By InsuranceDekho
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As a parent, you aim to give the best of everything to your child. Meticulous financial planning helps you ensure that your child has the best education, emotional and financial independence, and a financially secure future. Child life insurance plans ensure that your child is not left alone or indebted in unfortunate events of the death of the parents. However, there are a few things that you need to remember before investing in a child life insurance plan.
An early start plays an important role while you strive to provide your child with a strong and secured financial future. It is advised to start investing in your child right from when they are born. This has twin benefits including, giving you the advantage of compounding and the advantage of low premiums. Hence, investing in a child life insurance plan early reaps rich sums in the long run.
You need to choose a cover while keeping inflation in mind. The right policy tenure makes sure that you have got the funds available when your child needs them the most. While buying a child life insurance plan, it is fundamental to look at features like life cover and waiver of premium.
Things To Keep in Mind Before Purchasing A Child Plan
It is only fair that you give your best to your child in whatever you can. Financially, it is possible if you invest in a child plan for your child’s financial future. To understand better the advantages of a child life insurance plan, read on!
1. Choose a Cover Keeping Inflation in Mind
Inflation reduces the value of money. Hence, you need to choose a cover that beats the effects of inflation on your money and keeps your child’s life goals and aspirations on track. Choosing a sum assured of 15 to 20 times your current income will help you minimize the risk of inflation. Choosing carefully the policy tenure is very important to plan and address your child’s financial needs. Suppose your child is 8 years old and is sure to pursue higher education by 18, you should choose a 10-year policy term which will help you with the money when your child needs it most to shape their career.
Also read - Mistakes to Avoid When Buying Child Insurance Plan
2. Look for Essential Features
While you choose to zero in on a child insurance plan look for the essential features that the plan offers such as life cover and waiver of premium. In child insurance plans, the parent is the life assured and the child is the nominee/beneficiary. A life insurance cover ensures that your child receives the lump sum amount of the sum assured, to be used for future expenses, in case of your demise in the duration of the policy term. Waiver of premium makes sure that in case of your death, your insurer pays off all the future premiums on behalf of the child, keeping the policy intact. These features secure your child’s financial future against all odds.
3. The Flexibility of Customisation with Changing Requirements
As your child grows, their needs and necessities change. You need to find out whether your child insurance policy gives you the flexibility to customize it with the change of requirements. There may be occurrences when you need to make partial withdrawals for education. Make sure your policy offers you the flexibility to do so.
Starting to invest in your child as early as possible will give you the best out of your investment. Before you invest in a child life insurance plan, you must remember the points mentioned above in the article.
You may also like to read - What are the factors to be considered while purchasing child life insurance?
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.