How to Choose the Best Child Insurance Plan for Your Children^~

It is therefore asked of all the parents to allocate appropriate funds to achieve the most important goal for their children- Education. The best way to secure your child's future is to invest in a Child Insurance Policy.

While you are looking for a child plan, do not forget to consider these important things:

• Inflation - The amount is required at a much later date and therefore you must factor in inflation before investing your money in a particular plan.

• Time of return- Exact time of receiving the returns is mandatory while planning your investment.

Taking these into account, you must then analyze the plans and choose the one that meets your needs and costs. There are a few plans, characteristics of which are discussed below.

Traditional Children’s Plans

Insurers provide policies such as children’s money-back or endowment plans, which give a defined payout at a defined period. So, in case something unexpected happens to you as a parent, the child would be entitled to receive the sum assured on maturity and the interim premiums would also be waived off. But the return from such policies is very low, hardly covers the inflation.

Unit Linked Children’s Plans

These Children's insurance plans are same as any ULIP plan, the only difference is that the beneficiary in such plans is the child. Not to forget, many additional charges accompany theses plans like any ULIP. Please ensure that you know about all the charges applied before buying these plans.

How to choose a child insurance plan

These two are other key factors to consider while buying child insurance

• Premium: Almost all insurance companies offer child plans with multiple features at variable prices. Most of these plans have inbuilt riders like waiver of premium and accidental death benefit rider and in other cases you may have to buy them. While considering which insurance to buy, it is suggested that you include the cost of the riders with the basic premium for the policy. You should then compare it to the premium of the policy where the riders are in-built; and basis that you can ultimately decide.

• Riders: For child insurance the riders are significantly important as it will take care of your child's responsibilities like his education and his/her career won't suffer in case anything unpredictable happens to you. Various riders are:

  • Comprehensive Health Benefit Rider Sum Assured

  • Waiver of all the future premiums

  • Income Benefit Rider

  • Accidental Death Benefit Rider

After reading this you will get a good clarity on what all you need to consider before buying insurance for your child.