Why Is It Important To Invest In A Child Life Insurance Plan?
Published On Sep 17, 2021 10:00 AM By InsuranceDekho
Table of Contents
Child life insurance policies are well-known for offering both life insurance coverage and investment opportunities. When a kid is as young as 30 days old, parents can obtain a child's life insurance policy for him or her. This plan is a long-term investment option that allows you to build a corpus for your child's financial security. This form of life insurance plan provides a maturity benefit if the life assured (e.g., the parent) lives the whole policy term, and partial withdrawals are also permitted.
Importance Of Having A Child Insurance Plan
The following are some of the reasons why having a Child's life insurance coverage is important.
1. Child Educational Expenses
Child life insurance plans might assist you in establishing a corpus for your child's higher education. Education is extremely essential in the lives of a child. A kid's life insurance plan is necessary nowadays if a parent does not want to sacrifice the level of schooling that they wish to offer their child. Child plans are an excellent method to build a corpus to support your child's higher education or even to send your child overseas to study.
2. Funding Medical Emergencies
If your kid needs to be hospitalized due to a medical issue, you can fund such medical emergencies with the aid of a child's life insurance plan. A kid's life insurance plan's partial withdrawal provision can assist you to pay for medical crises; you can take a specific amount before the policy matures.
3. Untimely Death of a Parent
Life may be unexpected, as a parent, you would want to make your kid financially secure even if you died. A kid's life insurance policy protects your child financially in the event of your untimely death during the policy's term. The parent is the life guaranteed in a child's life insurance policy, and the kid is the beneficiary, receiving the death benefit in the event of the parent's untimely death. The death benefit might assist the kid in meeting his or her costs.
4. Partial Withdrawals
A child life insurance plan allows for partial withdrawals, which can help you pay for your kid's extracurricular activities such as singing, dancing, gymnastics, and so on. You may develop your child's skills in this manner. You can withdraw a set amount before the kid's life insurance plan matures.
5. Policy Continuance
There is a distinct advantage to obtaining a kid life insurance policy with a premium waiver rider. This guarantees that the policy remains in effect. If you acquire a child life insurance policy with a waiver of premium rider, all future payable premiums will be waived in the event of the parent's (the life assured's) untimely death, resulting in policy continuation and allowing the kid to profit from the policy.
6. Collateral Alternative
A child life insurance policy can be used as collateral. A parent can simply use a child's life insurance policy to get a loan for their child's schooling.
Child life insurance policies can assist you in creating a financially secure future for your child. These plans can assist you in finding your child's schooling, extracurricular activities, and medical crises. This plan can be highly beneficial in the event of the parent's untimely death since it offers financial assistance to the kid in the event of the parent's untimely death within the policy term. A parent must get a kid's life insurance policy to cover their child's needs.
Also read - Savings And Investment Tips For Education Of Your Child
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.