Girl Child Insurance Plans

What are Girl Child Insurance Plans?

A girl child insurance plan is an insurance product designed to create a financial security net for a girl child’s future. It offers financial assistance to the child if their parents die during the policy term. One of the key features of a girl child insurance plan is the premium waiver benefit. This feature waives future premiums payable while keeping the policy in force. So, for instance, if the parent dies due to an accident, the unpaid premiums will be paid off by the insurer. The policy continues as per the original maturity date and pays out the sum assured to the beneficiary.

List of Girl Child Insurance Plans

Disclaimer: ≈ Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprises insurance products offered by all the insurance partners of Policybazaar. The sorting is done in alphabetical order (Fund Data Source: Value Research). For a complete list of insurers in India, refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in.

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Importance Of Girl Child Insurance Plans

The cost of education is growing and should not come in the way of your child’s progress. While small monthly savings are important, they cannot protect you against inflation. Child plans can help you offset this concern and also financially shield your daughter while growing up. Here are some of the few reasons why insurance for your girl child is so important.

• Financial protection against unforeseen circumstances: The girl child insurance plan is designed to protect your daughter against unforeseen circumstances. The best child insurance plans offer the death benefit amount to the child upon the death of an earning parent. Child investment cum insurance policies are designed to offer financial respite to the kids while keeping the policy in force. This ensures that the money keeps accumulating till the end of the policy term without the kid having to pay premiums. The final fund value can alleviate significant hardship on the girl child if the parent were to die within the policy term.
• Funding the future of your daughter: Irrespective of the presence of the parents of the child, the insurance plan ensures that the future of your daughter is completely protected. The plan is designed to create a corpus for your child’s future goals. Even if the parent dies due to unforeseen circumstances, the plan continues due to the waiver of premium benefit, and the girl child is eligible to receive the maturity amount when the plan matures.
• Waiver of premium protection: The waiver of premium benefit is one of the key features that protects the child in case her parent passes away. The benefit is designed to waive all future premiums after the date of the death of the parent. The plan continues to earn returns and the maturity sum is paid to the child at the predefined maturity date.
• Offset risk of inflation: The education inflation rate in India ranges between 10%-12%. The growing cost of education will require you to start investing for the future of your child. A girl child insurance plan can help you create a healthy corpus to cover the education of your daughter. If an early investment is made and planned well, you will be able to outrun inflation and create a corpus which is enough to cover your daughter’s education expenses.

Types Of Insurance Plans For Girl Child

Parents can purchase the following sorts of insurance coverage for their daughters.

• Child ULIPs: Child ULIP is one of the best insurance policies for a girl child's future. Unit-linked insurance plans divide your premiums into 2 portions, wherein a portion of the premiums is invested in market instruments like stocks, bonds, and other securities. The remaining portion is allocated to the insurance protection feature. The investment component ensures that a parent's money rises significantly based on the fund's market performance. On the date of maturity, the collected fund value is paid out to the girl child.
  The insurance component ensures that even if a parent dies during the policy term, the child receives a death benefit and the future premiums are waived so that the child can access the entire corpus later, and in some situations.
• Child endowment plans: A child endowment plan is an insurance plan which combines the benefits of life insurance and traditional savings. The premium paid by the policyholder is split into two portions. One of the portions is used as life cover, while the remaining premium is used to build a savings fund.
• Term insurance: It is a form of pure-risk life insurance policy that provides a guaranteed death benefit to the family of the deceased. Your daughter can be listed as a policy nominee, ensuring that the death benefit goes solely to her and for her benefit. If the child is under the age of 18 at the time of your death, you can appoint an adult to manage the fund until the child reaches that age.
  Notably, term life policies now include a return of premium benefit at maturity. It means that you won't lose any of the money you put into the policy if you live to the end of the policy term.
• Traditional Money-Back Plans: If you have a budget for your child's expenses, these options are ideal. These are endowment-based plans that pay out at predetermined times. You may plan every stage of your child's future based on the predicted returns from these policies, whether it be schooling, college, or international study.

How To Pick The Best Insurance Plan For A Girl Child?

The number of options available can be very confusing for a parent. However, choosing the best child plan for your daughter need not be as complicated. All you have to focus on are a few fundamental factors. Here are some tips to pick the best investment plans for your girl child:

• Set a Goal: One of the most important factors to consider when investing in any girl child insurance plan is setting a tangible goal. The goal allows individuals to create a roadmap to reach their financial goals.
• Factor in inflation: The current inflation in the education sector is 10%-12%. Pick a cover that enables you to beat inflation and comfortably pay for your daughter’s pursuits.
• Take balanced risks: Sticking to traditional child savings plans may seem like a good idea; however, the rate of return is significantly lower. A high corpus requires you to invest in ULIPs that diversify your investment portfolio among high-risk equity markets and low-risk debt funds.
• Identify child needs: Once you have decided on a budget and an investment strategy, look where your child’s interests lie. It is advisable to save for a corpus that is high enough to accommodate any pursuit, be it international or local. However, certain technical fields such as engineering and medicine incur larger expenses than vocational fields.
• Cover against your death: The most critical part of this whole exercise is to make sure that your child is financially secure should any misfortune befall them. The insurance cover should be enough to take care of the needs of the family and also cover educational expenses of the girl child.

Conclusion

Girl child insurance plans are one of the best financial products you can invest in if you wish to protect your child’s financial future and ensure that your daughter is provided with the educational and financial facilities as planned. You can choose a plan as per your risk tolerance, your financial goal and your future financial needs.