How to Choose the Best Child Insurance Plan to Secure the Future of Your Children?
- DetailsWritten by PolicyBazaar -
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Updated date : 13 January 2020
A child’s safety is every parent’s first priority. All parents want their children to enjoy the best possible childhood and have a guarded and safe future. But fulfilling every need of a child can be a difficult task. The best way to safeguard your child’s future and provide them secures life is to, have a child insurance plan.
A child Insurance Plan financially secures your child’s future and supports them in every milestone of life like for higher education, a child education plan is provided and for marriage and other important events in life, a traditional child insurance plan is provided. Although having a child insurance plan to provide protection to your children is a must-do task, it is important to consider many different aspects while choosing the most beneficial plan for your child. Further in this article, we have elaborately discussed the simple guidelines to choose the best child insurance plan in order to secure the future of your children.
Prior to investing your money in a particular plan, it is important to factor the inflation rate. Estimate the amount you will require in future for your child’s upbringing, by keeping in mind the growing inflation rate. Invest accordingly for your child so that with a long-term period you get higher returns on investment and the money will be sufficient enough to deal with the inflation.
Time of Return
While planning your investment, it is important to know the exact time of receiving the return. Noticing the time of return, the buyers should analyze the best policy for a child and choose the most suitable plan according to your needs and affordability.
Engage an Insurance Advisor
While it may seem insignificant, taking the advice of a reliable and competent insurance advisor at the initial stage of your purchase is a must-do thing. Most of the customers get confused while buying an appropriate plan; an insurance advisor can help you to choose the best plan by sharing their expert advice and can help you to save bundles on your savings.
Compare the Plan
In order to choose the most beneficial plan according to your own requirements, it is very important to compare the different plans online. By comparing different plans, you can zero in on a plan that provides maximum coverage in minimum premium rate. Moreover, it also helps you to calculate the life cover you want to have for your children.
Make Long Term Investments
When it comes to planning a secured future for your child, it is always recommended to make a long term investment. You can choose to invest in some of the best long-term investment tools available in the market such as Unit Linked Insurance Plan, Fixed Deposits, National Savings Certificate, SIP Mutual Funds. If you start making an investment in any child education plan right from the time when your child is small, then you can create a sustainable financial backup for the better future of your child when they grow up. However, if you need to achieve any target in the near future like enrolling your child for higher education, then you can create a financial back up by putting funds in the recurring deposits.
Child Insurance Plans are Categorized into Two Variants
Traditional Child Plan
The insurance company provides policies such as LIC child plan, child education plan and endowment plans, which provides a defined payout at a defined period. The child is entitled to receive the sum assured on maturity and an interim premium is also been paid out in case of the uncertain demise of the policyholder. Besides these benefits offered by the policies, traditional child plan provides very less return and hardly covers the inflation.
UNIT Linked Insurance Plan
ULIP Children insurance plans are the same as ULIP Plans. The only difference in these plans is that the beneficiary in these plans is children. Like any other ULIP plans, many additional benefits are accompanied in these plans. However, besides all these benefits, the insurance buyer should ensure that they know about all the charges applied prior to purchasing these plans.
While purchasing a child insurance plan, there are two key factors that should be considered.
Nearly all the insurance companies offer child plans with variable prices and a wide variety of features. Most of the child insurance policies offer inbuilt riders like wavier of premium and accidental death benefit rider. In case of the insured feel the need to buy these riders then they can avail the benefits of these riders by paying an extra amount along with the basic premium amount. It is wiser to include the cost of the rider with the basic premium while considering the purchase of the policy. After calculating the amount to be paid it is important to compare the premium rates of different child insurance policy and based on that you can choose to purchase the policy.
In the case of child insurance, riders are extremely important as it will take care of your child responsibilities in future in case of any unforeseen circumstances and emergency. Different types of riders offered by child insurance riders are
- Comprehensive Health Benefit Sum Assured Rider
- Waivers of All the Future Premiums
- Income Benefit Rider
- Accidental Death Benefit Rider
Keeping all these aspects in mind you can surely choose one of the most beneficial child plan to secure your child’s future.
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