A child plan combines insurance and investment to help with a long-term financial planning for a child's
future needs. The main goal of such plan is to include an insurance component that will cover your
child's
requirements in the case of your death. These plans have variable payments and can be used to pay
for a
child's education. From premium payments to applicable charges, know all about insurance
policies for your
child before investing, you must understand the best benefits and features of a child plan. Let us
begin.
Features of Child Plans
● Financial Protection
Annuity child plans provide regular payments for the rest of your life after making a one-time deposit. Such
life insurance annuities provide a steady stream of funds for your child’s growth and education with no
contribution limits.
● Waiver of Premium Benefit
Premium waivers benefits get applied if the insured dies, or becomes unemployed, or is disabled within the
specified term of the policy and cannot pay the premiums. This feature of the child plans allows the
child to receive the policy benefits even after the premiums are waived off.
● Sum Assured
Child plans offer a lump-sum payout of an amount guaranteed, equal to the maturity benefits due after the
period. A maturity date may be established according to your child's future financial needs, and the
investment will continue to develop into a corpus during the insurance period.
There is flexibility in paying a premium for child plans, which means the premium may be paid in three
different ways. It can be made in the form of a monthly pay premium payment, a single pay premium
payment, or a limited pay premium payment. The individual's chosen policy determines this. The premium
amount is determined by the sum guaranteed and the maturity benefits of the selected plan.
● Death Benefits
One of the most important aspects of a child’s plan is that when a parent or legal guardian dies, the child
receives a lump sum payment against the insurance policy, but the insurer allows the continuation of
investment plan for future maturity benefits. This is because the insurance company understands that the
parent’s death should not hamper the child's investing plan.
● Nonforfeiture Benefits
These provisions in the child plan allow you to continue receiving benefits even if the policy has lapsed
due to the nonpayment. The sum might be a percentage of the premium, decreased benefits, or the policy's
whole cash surrender value. Surrender and premium discontinuation are examples of such advantages.
Choosing the correct strategy for your children's long-term development and growth is critical. The
following are some of the child insurance plan advices that you must follow to ensure that you select
the ideal plan for your child-
● Recognise the Requirements
You must understand the purpose of purchasing the plan-Is it for a specific reason or for a broad coverage.
Knowing the correct goal makes it simple to choose the best strategy for your child. Plans may be
tailored to deliver the highest possible rewards based on the child's future prospects.
● Evaluation of the Risk Profile
The key to determine your risk-bearing capacity is evaluating and analysing your profile. Children Unit
Linked Insurance Plans is a good option if you want to take less risk. These plans provide returns that
are tied to the stock market. You can also do transition from an equity to a debt-based portfolio.
Traditional Plans, which provide set returns, is a good choice if you want to make a secure investment.
● Weighing Benefits and Chargers
Not only you should look into the virtues of a child’s plan, but also analyse the costs associated with it.
If a ULIP child insurance plan is a possibility for you, you should read the small print and go through
the prices under several headings. Make an investment decision after assessing the advantages and
disadvantages thoroughly.
Get yourself insured today to secure your child’s future!
