Your children are the most significant aspect of your life as a parent. Investing and preserving your children’s future is seen by parents in India as one of the most significant financial goals in their overall financial planning. A child insurance plan ensures that your child’s future requirements are fulfilled even if you are not present.
THE SIGNIFICANCE OF A CHILD INSURANCE PLAN
Child insurance plans are vital since they guarantee that your child receives the finest possible education even if you are not present. In addition, they are created in such a manner that an inbuilt premium exemption rider guarantees that the plan proceeds even after the parent’s death and that the benefits accumulate and, when payable, may be used for the child’s future.
It is among the finest ways to save for your child’s future requirements, such as higher education, which might be pricey. These plans also include a partial withdrawal option for when it is necessary. In addition, you may be able to claim tax advantages for the premium paid.
SELECTING THE BEST CHILD INSURANCE POLICY
In most situations, parents begin preparing for their child’s future far too late. To maximize the value of insurance plans, it is advised that you begin planning for your kid’s future during his or her formative years to guarantee that adequate money is accessible when your child is ready to go on a career path. There is no advice to selecting the best insurance plan. However, if chosen carefully, it may become a long-term asset in managing your child’s future.
THINGS TO CONSIDER WHEN PURCHASING THE BEST INSURANCE PLAN
- Determine your objectives: The first step in investing is to plan. You should know the amount you will need for your child’s schooling, marriage, and so on. Another significant issue to consider is the predicted rate of inflation and its impact on your investment. As a result, you should consult with a professional financial counsellor before selecting an appropriate insurance plan.
- Invest in a kid plan that includes a premium waiver: The availability of a premium waiver rider in a children’s insurance plan is critical. When a parent dies, the insurance firm waives all future payments and continues paying the policy, ensuring that the maturation benefits established at a given age stay intact.
- Correctly comprehending the product and its associated costs: Before you invest, make sure you grasp the product brochure well. Insurance firms levy a variety of fees that must be payable by the consumer. As a result, you must choose the best insurance provider after weighing all of the options.
CHILD INSURANCE POLICIES COME IN A VARIETY OF SHAPES AND SIZES
Child ULIPs (Unit Linked Insurance Plans): In this form of plan, an insurer’s premium is placed into a communal pool of money that is invested in both debt and equity securities. They contain risk, which is amplified if you intend for the long term. This plan has a high potential return because it is a market-linked product. This sort of insurance is appropriate for long-term coverage (more than 10 years).Endowment Plans for Children: In this sort of plan, an insurer’s premium is put into a common pool of assets that are only invested in debt products. The prospective rewards are not particularly high. This sort of coverage is excellent for short-term insurance.