A bright future for your child will require your emotional as well as financial support. The latter can be achieved by using the right financial tools. Child insurance plans are amongst the simplest ways to do this. With the dual benefits of insurance and wealth creation, rest assured that your children will not have to compromise on their life goals.
What are Child Plans?
Child plans are wealth creation options for parents who want to provide the best for their little ones. You can buy one as early in your child’s life as you deem suitable. Using a child plan calculator, you can get a better idea of what policy term and payment option will earn you the benefits you would like.
Before you buy a policy, it is essential to look at the features you may want to have in your policy. You can then compare and choose the best plan option for you.
Here are some of the general features of insurance plans for children.
Features of Child Insurance Plans
- Premiums
Premiums are the amount you pay to your insurance provider to keep the policy in force. Many plans offer the option of paying a lump-sum premium or making payments annually, bi-annually, quarterly, or monthly. Consider the affordability and the policy term suitable for your goals before you purchase a plan.
- Sum assured
This is the final sum that you and the insurance provider agree upon as the amount you will receive at the end of the policy term. It will be handed to you or your nominee. This corpus can take care of your child’s goals and aspirations. It is usually received in alignment with specific milestones in your kid’s life.
- Policy tenure
This is the duration for which the policy provides insurance cover. In the case of child plans in India, the parent is insured. Depending on when you are buying the policy, your age, and the age of your child, you can decide on an appropriate policy tenure for you. You can use a child plan calculator before making the policy purchase.
- Premium waiver benefit
The insurance benefit of a child policy in India protects the child if any of the parents die. By opting for a premium waiver benefit, you can ensure that if you die during the policy tenure, the premium will not burden your child. However, they will continue to receive the benefits of the plan.
- Benefits
Depending on the policy you choose, there are several benefits available. Apart from the premium waiver, you can get disability, accidental death, critical illness, and more. Another benefit is partial withdrawals which allow you to take out a required amount. These may help you in the long term, so check your policy documents to see which ones are in-built.
- Fund Options
Several policies allow the policyholder to decide about where their premiums are directed. You can choose from fund options such as debt, equity, money market, and more based on your risk appetite and policy term. The option may not be available with all child plans in India.
Insurance for children comes with various benefits that could help you build a larger corpus to fund the dreams of your child. Ensure that you pick to right one to suit your needs.
