Children are considered a bundle of joy. Right from the time they are born to the time they grow into adults; children are presented with various challenges by society. It is the responsibility of the parents to provide adequately for them and take care of their financial needs. The education of children is the backbone of their development.
The cognition of the child in their formative years is greatly dependent on the quality of education. This is the reason why education is such a precious commodity in today’s capital world and how the big corporations are placing premium charges for offering opportunities in getting a good education.
Different kinds of child insurance plans:
Child ULIP Category
The essential features of Child ULIP plans are that they offer the individuals, extended flexibility in premium payments. In addition to this, there are the benefits of insurance coverage, assuring participation in the global equity markets, and the chance to make disciplined investments.
The insured can take a breather, as the child is paid a definite amount of money on the death of the life assured. This helps the child in charting a course towards academic and professional success, just because you had the sagacity to foresee the future by investing in child insurance plans in India.
Traditional Endowment plans
These child insurance plans offer a semblance of stability in the form of tax-free bonuses on the original sum assured. These bonuses help in covering the education and marriage needs of the child and are generally paid from the second year forthwith. These plans carry the important component of revisionary bonus with the added part of simple interest.
What are the various features of Child Insurance Plans?
Life insurance policies for children come equipped with child safety nets that are guaranteed to tide over the difficult life situations and aid the important phases of the child’s life. These plans consist of two categories, linked and non-linked types.
Premium amount
Customers can start paying a lump sum premium amount at the initiation of the policy. Then again an arrangement can be made to make the payment on a predetermined frequency such as monthly and half-yearly. Traditional child plans have different internal components and the premium amount varies depending on the financial capacity of the payment.
Assured Sum on Child Insurance Payment
On the unfortunate death of the policyholder, the child will stand to derive a huge amount of money in the form of Sum Assured. This amount is calculated as ten times multiplied with the present gross incomes of the assured life.
Maturity
The maturity period can be selected by the insured depending on the age of the child. Also, the future interest rates that will be applied will be determined by the risk-takers at the insurance company.
Clause of Partial Withdrawal
Child insurance plans are designed to safeguard the interests of the child against corporate malpractice and excessive greed. This is the reason why a partial withdrawal conditionality has been set into the contract to give a chance to the child to meet the exigent circumstance in their lives.
Choice of Funds
Multiple options of withdrawals of the fund payout help the insured to further plan for the family’s future. The two options of fund withdrawal in this policy are dynamic fund allocation and a systematic transfer plan.
Waiver
The advantage of Child ULIP plans is that on the death of the parent, there is no need for the child to pay for the premium amount. These are waived according to the terms of the original contract. Child ULIP plans carry the full force of the Indian Contract law and they are considered steel traps when coming to protecting the interests of the insurance purchasers and the child.
What are the important benefits of Child Insurance Plans?
- They offer immense flexibility in fund disbursal on the death event of the policyholder
- Waivers of premium can be deployed to protect the future interests of the child without liabilities in case the policyholder is not around at that time.
- Banking institutions show high interest in sanctioning loans to those who carry child insurance plans.
- Apart from the host of monetary benefits, our tax burden is greatly decreased due to tax refunds as per the applicable laws.
- Plans can be customized as per the individual needs and certain types of plans such as endowment or ULIP plans can be selected.
Conclusion
Caring for a child is not confined to showering affection and love, but suitable financial considerations are involved. If children want their aspirations to be fulfilled, they should embark on a strenuous journey of academic scholarship and an ever-burning focus on maintaining discipline.
The best colleges in the world are not cheap to get into and parents should plan their finances properly by purchasing child insurance plans in India. Higher education without a doubt is going to be a burden on your finances, and now is the best time to secure the future of the child by investing in child insurance plans.
