Why Should You Prefer A Child Plan Over An FD?
Updated On Nov 10, 2021
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If you want to look into investing possibilities, the market has a wide range of financial products to choose from. Fixed deposits and child life insurance plans are two examples of high-return financial tools. They're also well-known financial terms that most people are familiar with. Despite the notion that life insurance is an insurance product, many people use it as an investment vehicle. A fixed deposit, on the other hand, is a type of insurance that allows you to invest for a certain length of time. If you're trying to figure out which investment choice is the superior one, keep reading.
Where Should You Invest - A Child Plan or A Fixed Deposit?
The differences between a child plan and a fixed deposit are as follows
A fixed deposit is an investment instrument, whereas child life insurance is a sort of insurance. Insurance is obtained to safeguard your family in the event that you are unable to save for the future.
2. It's ideal for
While fixed deposits encourage you to save, child life insurance plans are bought out of concern for your loved ones and a fear that they may have difficulties in the future.
3. Offers On Insurance And Investing
A kid plan is a bundle that includes both insurance and investing incentives. It allows you to save money while also safeguarding you from unanticipated disasters.
4. The Fund's Value and the One-Time Payment
A kid plan provides a lump-sum payment at maturity as well as financial protection in the event of a parent's death during the policy term. A fixed deposit, on the other hand, when it matures, gives the proposer a lump amount.
5. Partially Withdrawal Provision
You can make partial withdrawals from a life insurance policy for your kid before the policy matures. This is a significant advantage since it allows you to withdraw funds to cover any unexpected bills or fulfil other financial responsibilities. A fixed deposit, on the other hand, does not provide you this option.
6. Premium Waivers
Child plans are intended to give financial assistance to children. The insurer will waive the premium if a parent dies during the duration of the child's plan. As a result, the child will get the promised lump payment without having to pay the balance of the premium.
Simple monthly savings will not be sufficient to afford escalating higher education costs. School costs should be the last thing standing in the way of your child's achievement in a fast-paced environment. Child insurance policies allow you to spend money according to your child's educational needs, current financial status, and other financial goals. A kid plan is a safe and efficient way to help your child prepare for the future. If you want guaranteed returns, a savings account is a smart choice; but, you will not gain any tax benefits. Furthermore, an FD is a preferable alternative if you desire a constant income from your investment. It's also the best option for senior citizens.A life insurance policy is a great way to protect yourself against risk. There are a variety of policy alternatives available, ranging from 10 to twenty-five years in length. On online aggregator websites, you can quickly compare numerous different policies and select the best one depending on your desired fund amount and coverage requirements.
Also read - All About HDFC Life Sanchay Plan
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.