Know how to pick the best Child Insurance Plan for your children
When it comes to life insurance policies, one can pick from several life insurance policies. There are investment policies, term policies, endowment life insurance policies, money back policy, retirement policies, among many other categories.
Every policy has its objectives, features, and benefits to count. One such policy category is the children’s policies or child plans.
Everyone wants their children to have a financially safe and bright future. For this, parents save and work hard for years.
As the cost of almost everything continues to rise, it is important to have proper funds to pay school fees, college fees and even the cost of their marriage. This is the reason why one should think of investing in a good Child Insurance Plan.
There are various child plans out there, which are designed to help secure the future of the child with timely benefits.
But since there are many Child Insurance Plans, it can be a bit difficult to find the right one. Always take the help of financial advisor, or insurance experts and consultant with insurance knowledge.
Here are some things to keep in mind when buying Child Insurance Plan:
There are a large number of Child Insurance Plans in the market including Child ULIP, Child Endowment Plans, and Single Premium Child Plan, so it is not easy for the parents to select the best child plan.
It is important to select an ideal child plan for the future long term development of the child. Given the competition for degrees and the rising cost of education, there is pressure on both parents and children when it comes to higher education.
Premium and term
Now, every Child Insurance Plan will have a term. This should again be decided keeping in mind the age of the child. Every policy has a maturity age, during which the policy will lapse.
The longer the tenure, the longer the premium has to be paid. But having longer-term usually yields better benefits. Also, one must consider the premium that one can pay at regular intervals to maintain the policy. Also, the premium payment modes should be decided in advance.
Age and requirements
The very thing that will decide which term to choose should be based on the child’s future needs and age.
Some children plans are meant as marriage plans, while others are education plans to support expensive tuitions.
The buyer should chalk out the exact future requirement of the child before taking any children policy.
Many tend to make the mistake of waiting for a certain time after their child arrives to plan their financial planning. This may be a mistake as the cost of child education is rising significantly over time.
By the time the child turns 18, he should consider investing in an insurance policy. This will give a longer tenure and thus will help in managing the premium amount and benefits accordingly.
Many Child Insurance Plans allow the insurer to add waiver benefits to the policy at an additional premium.
These premium waiver benefits are very helpful in case of any accident that may occurs during the term of the policy. As per the waiver, the policyholder will not have to pay the premium if anything.
Children policies should always be bought based on financing affordability, future requirements, and investment appetite.
The risk factors and inflation factor should also be kept in mind while choosing any insurance policy.
How Child Insurance Plan Work
Child Insurance Plans were designed for the sole purpose of helping your child fulfil all their future requirements and dreams.
To start the process, you need to decide whether you want to buy a unit-linked insurance plan (ULIP) or an endowment plan.
A Unit Linked Insurance Plans will provide you an opportunity to choose where you want to invest your money.
On the other hand, if you opt for an endowment plan, the insurance provider will invest the amount only in debt instruments.
While buying the Child Insurance Plan, you also need to clearly state whether you want lump sum payment, monthly, quarterly, half-yearly, or annual payments. Once you have worked the details and paid the premium, the child plan will become effective.
Now, let’s assume that you are the policyholder and a fatal accident happens to you. All future premiums will be waived off and the policy provider will pay a part of the maturity amount to your child every year till the maturity of the plan. On maturity, your child will receive the promised lump sum amount.
Choosing the right child plan like the LIC kanyadan plan can be very good thing for the future of the child.
One can easily buy the LIC kanyadan plan to cover future expenses. LIC kanyadan scheme from Life Insurance Corporation of India is great for availing various benefits during the entire term of the insurance policy.
Disclaimer: Insurance is a subject matter of solicitation. The information provided in this article issued in the general public interest and meant for general information purposes only.