Having children means you must be well prepared financially to pay for their education and other financial expenses to avert chaos in the future. It is vital to buy child plans to secure your child’s future. There is a bewildering range of excellent choices available today in the child insurance plan market. Thus, it is imperative to choose the best suited child plans based on your needs.
Below are some pointers to consider when buying a child plan.
Tip 1: Start financial planning and invest to secure your child’s future as soon as possible. Insurance companies offer child plans mostly with maturity benefits, the payouts are released at crucial life stages from 18 years onwards. A child plan provides a long horizon to invest, facilitating you to methodically build a corpus. So, choose a child’s plan, which encourages long term investment.
Tip 2: Parents, when investing in a child plan must understand that the funds will be utilized only in future. Thus, it is essential to estimate the inflation and rising cost of education. Doing so, would allow you to invest wisely and build a good corpus. It is also essential to know the time frames when you need to get the returns.
Tip 3: Always invest in plans offering premium wavier benefit. This stipulation enables the child plan to continue, even in case of the policy holder’s death. The child will be covered with all the benefits, even if the parent becomes disabled or cannot pay the insurance premiums. Thus, this option ensures that the maturity benefit agreed upon for the policy term will remain intact as planned. Most child plans provide premium waiver either as an option or as a crucial feature in the plan.
Tip 4: The premium amount will highly depend on the assured sum and the maturity amount preferred by policy buyer.
Tip 5: Knowing the different premium payment modes is beneficial. If you have sufficient funds, then opt for a one-time payment. Alternatively, you can opt to pay premiums on annual basis, half-yearly or quarterly basis.
Tip 6: Ensure that you invest in such a plan that offers a well balanced mix of growth and debt funds. Also, make sure that you opt for a plan that offers a good mix of capital protection and growth.
Tip 7: Choose a plan having system transfer option to assure that your gains in the child plan investment are well protected. Also, take adequate risk cover option to ensure that the death benefit is a considerable lump sum, which can aid your child and family in case of your demise.
Tip 8: The insurance policy term which you choose should be according to the financial requirements of your child at different stages of his life.
Tip 9: Estimate the total sum assured, which you would need at the time when the plan matures and invest accordingly.
Tip 10: There are several child plans to suit your budget and needs. Compare the child plan price quotes from different insurance providers prior purchasing them. You should only buy the best suited plan from a reliable provider.
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