Why Child Insurance Plan is a Good Investment
Updated On Jun 18, 2022
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A child insurance plan ensures that your child is taken care of financially in the future, even if you are not there. It is an insurance plus investment plan that gives you a portal to invest your money, all the while making sure that it gives a safety net for your kid in the future. Some of you might be wondering what features make a child insurance plan a good form of long-term investment. Let’s find out!
Features That Make Child Insurance Plan a Good Investment
A child insurance plan has a number of features that make it a good long-term investment. Some of them are mentioned below:
Assured Financial Stability
A child insurance plan ensures the stability of your kid’s financial future. Even if, due to some unfortunate event, you don’t get the chance to be there for your kid in the future, the insurance plan will keep a security net around your kid and give him financial stability. It has the feature that if the parent or the guardian dies, the insurance company pays the remaining premium payments, and the kid gets the promised lump sum amount after the term has ended. So, even if you are not there, the kid can continue to pursue their dream.
Maturity Benefit
When the term has ended, the child receives the incentives of maturity. You can decide the date of maturity corresponding to your child’s future needs. You can estimate what will be the time around which your child will need the insurance money and set it for that. And when the term has ended, the kid will get the corpus of money with the incentives.
Riders Available
In the child, life insurance options for riders and partial withdrawal are present. That is, you can take out the partial money if there is any kind of emergency. And along with that, riders for accidents, accidental disability, critical illness, and premium waivers are available.
You get the flexibility to use your money if some kind of emergency situation occurs. Insurance companies cover up any kind of health issue that your child will develop in the progressing years. Undoubtedly, it is a good way to invest your money for the long term.
It’s Insurance Cum Investment
Whatever amount you have saved in the insurance policy compounds to be a larger amount of money by the end of the term. How much your money will compound depends on the interest rate that your insurance company is offering you.
You can save money to protect your kid’s future, and at the same time, your money will also keep increasing.
No Risk of Loss of Principal Amount
Normally when you invest in the stock market or some other investment source, there are equal chances of profit and loss, which means that you are equally likely to lose a chunk of money from your principal amount.
But that’s not the case in child life insurance plans. Your principal amount remains secure, and it will just increase over time depending on the interest rate you are getting.
Wrapping up
Investing in child life insurance plans is a good form of long-term investment. This way, you can make sure that your child has financial security in the future, even if you are there to protect them or not, and invest your money. There is no chance of losing the principal amount in this investment. It takes the risk factor out of the investment; hence, it is a good form of investment.
Also Read: A Guide To Term Insurance Riders
