What Are the Risks Covered In the Child Insurance Plan?

It is considered to be the best insurance plan for a parent to purchase for their child because it provides a life cover with flexible pay-outs during crucial phases of the child's life. Since we all are familiar with the uncertain nature of life, the child's plan is designed after considering this very uncertainty of life. With a child insurance plan, you can secure your child's future without worrying about different risks of life.

Risks Covered in a Child Insurance Plan:

1. Funds Child Education 

   The first and foremost priority of your child's life is their education. Every parent works so hard to save money and invest in the education of their children. With the rising costs of education, it is quite difficult to save big for their higher education. Buying a child plan can help you secure funds for your child's higher education. In case of your untimely demise, the sum assured can be utilized to meet his/her education expenses. After maturity, the amount can be used by your child for achieving his/her further goals.

   Also, if you will choose wisely, the child plan can take care of the inflation effect in the future. So that when the time comes to use the money, it will not cut short. 

2. Fund for Medical Emergencies

   The nature of child plans is very flexible because it is designed to provide cover against the unavoidable risks. The best child plan provides a partial withdrawal option. God forbid any medical emergency due to an accident, uncertain event, or some serious medical ailment, with the child plan in hand you will be able to withdraw money to meet the sudden medical expenses. 

3. Offers Financial Security to Your Child

   Children carry so much potential in the world. While some are real nerds about science, some carry interests in creative fields. Few among them start to earn at a young age. Buying a child plan for your children can help protect their income and provide financial benefits in the long run. If your child is an actor, performer, musician, or makes money using his/her skills, a child plan will turn out to be useful for them.

4. Pays Off Education Loan

   The overall inflation effect and the rising cost of education make people compulsive to take an education loan. Purchasing a child plan can help in securing a loan for higher education in a collateral manner. A child plan comes with this benefit. Since everybody knows monthly savings would never be enough to meet rising education costs, a child plan can come to the rescue.

5. Provides Financial Independence

   Life is full of surprises and uncertain events. It is filled with good events and bad events as well. If you have planned to buy a child plan, you have made a wise decision because this is going to support your child in your absence. If for any unfortunate reason, your child loses both your partner and you, he/she will be in a very devastating situation. You can add a premium waiver rider in your basic child plan, which will benefit your child in your absence, as this rider allows insurance companies to continue the plan. With the help of this, your child is entitled to receive a lump-sum amount without any further payment of premium. With this rider, your untimely demise will not mark an end to the policy, as the responsibility of paying the balance premiums lies with the insurer. Hence, your child will be financially independent to meet the daily expenses or his/her education expenses in your absence.

6. Additional Riders to Cover Various Other Risks

   Not just child plans, but additional riders can benefit the insured in almost every type of insurance plan. The riders can be added to the basic policy by paying an extra amount. Even a single rider can extend the coverage by offering extra benefits. Also, adding the rider means you can create an extra shield to protect the entire plan. So that at the time of an unfavorable event, the policy would not collapse. Following are the riders you can add to your basic child plan:

   • Premium Waiver
   • Accidental/permanent disability 
   • Critical illness
   • Income benefit
   • Accidental death benefit

Final Word

As a parent, your prime duty is to financially secure the future of your child. The best way to start is by buying a child insurance plan. A child insurance plan not only offers financial security for your child but also provides the benefits of investments as well.