If you are a parent, you will have a constant aspiration to give your child the best life. Special emphasis will be given to provide quality education and health care facility. Now, you don’t have to worry too much for that, just get a good child plan to ensure a financially secured future of your child.
Types of Child Plan
Generally speaking, there are two broad categories in which child insurance plans are classified. These are:
1.Traditional Endowment Children Plan
Endowment Plans are traditional plans which work as a pure insurance plan where the life of the parent is insured. These are low-risk plans as they do not expose the investor to share the market risk. These types of child insurance plans are for a particular Term where the benefits are received as Sum Assured on maturity. There are regular Bonus payments along with the Sum Assured as returns. In the event of the death of the policyholder, the Beneficiary child gets the amount for higher education and a better life.
2.ULIP Child Plan:
ULIPs are high risk and return plans. In these plans, the investors’ money is invested in equity and debt in a particular ratio as preferred by them. Also, these types of child insurance plans offer a greater degree of flexibility in the hands of the investor to switch investment from equity to debt as per their risk appetite. Such plans are ideal for long term investment as the risk gets spread over the term and the returns can be expected high. Why need a child plan?
You will need a child plan for the following reasons:
1. Protection against uncertainties:
Any uncertainty related to your life can destroy the future of your child. Child insurance help provide financial protection for your kids so that they attain higher education in the event of the death of the parent.
2. Planning Future:
While the cost of education is rising, you should always be in a position to fulfill the dreams of your kid for giving them their desired future. Child plan can help you a great deal in providing financial help for such a purpose.
3. Reducing the burden of liabilities of future:
Most parents look for education loans to meet the expenses of higher education of kids. Child plan helps you save today so that you won’t have to burden your kids with a financial liability in the future.
4. Stress-free life:
Every parent dream of providing a financially secure life for their kids. When they do financial planning for their kids, they get peace of mind since it enables a good life in the future.
Advantages of Child Insurance Plans
Child insurance plans provide several advantages. They are:
1. Financial protection for kid’s future:
Such plans provide monetary benefits in the future so that you can meet the expenses while pursuing their higher and professional studies
2. Maturity benefits of sum assured and bonus:
A lump sum amount is paid at the time of Maturity so that you can meet expenses like higher education and marriage. This includes the sum assured and the interest or return which comes as a bonus to you.
3. Tax benefits:
Indian Income Tax Act provides exemptions in the tax liability to the Insured with such plans.
4. To provide insurance coverage for your child’s future:
In the event of the death of a parent, it provides financial help to the family also in the higher education of the kids. Thus, the child gets a better future even after you.
5. Provides retirement benefits:
Child Policy also provides retirement benefits for you. The amount can be utilized as pensions when you retire.
How to Choose the Best Plan?
Online knowledge banks and libraries have made availability of information relating to the insurance very easy. Now, you can make an informed decision on your own. To choose the best plan, you can compare child plans of different companies in terms of the features, benefits, and costs. When you compare child plan, you get the best deal with maximum possible benefits.