Why Child Plan is Important?

Investing in a child plan becomes a must as it not only helps your child fulfill her/his dreams but also lets her/him overcome any obstacles in their lives in your absence. In case of the sudden death of their guardian, a child plan ensure that the children receive financial support till they become independent themselves.

Types of Child Plans & Their Importance

There are different types of child plans to choose from. Each plan comes with their unique features that can play an important role in your child’s life. The ultimate goal is to create a corpus for them in the times of need, be it on a parent’s death, for their higher education, or to fund their marriage.

Therefore, picking the best child plan to invest in will depend on your requirements and the amount of security you seek for your younger ones.

Following are the different types of child plans:

1. Child insurance plan

   Many insurance firms in the country provide this type of child plan. They come with both insurance and investment elements for the policy. As the guardian or parent, you can plan out the dates and amount you want as future payments to your child. The child insurance plan is further divided into subcategories of Regular Premium Plan and Single Premium Plan.

2. Regular Premium Plan

   This type of child insurance plan requires you to pay the premiums until the child attains 18 years of age. The insurance firm, after that, repays the recipient the deposited amount in the coming years. In cases where the parent dies before the policy attains maturity, the child gets an assured sum only after attaining the age of 18 years.

3. Single-Premium Plan

   For a Single Premium Plan, you pay premiums only once at the beginning. Your child will get an assured amount is given when the policy reaches its maturity.

4. Unit-linked Child Plans (ULIPS)

   Investing in child ULIPs is a wise decision as these come with market-linked returns and have the following advantages:

   • The flexibility of withdrawal

   • Suitable cover.

   • High returns.

   • Value is appreciated with time.

5. Money-back Plans

   Money-back plans can be used as child plans as they come with efficient planning alternatives. They cater to the individuals' needs for future expenses. They also have regular income options as well. Your child receives periodic payments that can help cover their education milestones.

6. Endowment Plans

   They incorporate elements of both savings as well as insurance plans. The savings elements are activated after you have been covered for a given period of time. You get the guaranteed amount at the end of the endowment period. This makes it an excellent savings tool for your child's secure future.

Benefits of Child Plan

Several benefits come along with a child plan. At the end of the policy, the child may also become the policyholder of the same plan. Here is why you should go for the child plan:

1. Provision of school fees.

   The insurance firm pays the fees up to a certain amount for the child. This is provided after the parent or guardian's death, who was providing the school essentials for the child. The amount is given out at certain rates, considering the other needs of the child.

2. Funding the child's interests.

   If a child is passionate about her/his hobbies, he or she is encouraged to pursue them till the end. Sometimes, it may so happen that these interests could prove to be costly, and hence, your kid has to give up on her/his passion. By investing in a child plan, you get the much-needed support from your insurance provider.

3. Wedding expenses.

   Some parents go to extreme lengths to ensure that their children have the wedding of their dreams. With a child plan, once your kids reach a marriageable age, the policy provider meets the wedding expenses. In fact, the costs are sufficiently met with the funds assigned for the big day.

4. Meeting the unstable market.

   By investing in a child plan, you will make good use of your money through timely investments. This, in the long run, will bring high returns, which will be of more use to your child. The value appreciation will ensure that your returns are higher than what you invested. This will especially help you fund expensive college admission in a different country.

5. Higher Learning

   In instances where the child pursues higher education, the firm can provide fees for the child to broaden his or her horizons in the subject of their choice. At this point, many parents could be unable to chip in since higher education can be exorbitantly expensive. However, with a child plan, your child will still have the resources to pursue a career of their choosing.

Wrapping Up

A child plan is essentially meant for the betterment of your kids, and you would definitely not want to spoil the chances of your kid making it big in the future. Thus, make sure to double-check every detail and choose a trustworthy brand before investing your hard-earned money in a child plan.