Child Insurance Plans: Buy Child Education Plan Online in 2022

A child insurance plan offers a mix of insurance and investment. The life insurance component guarantees that your child enjoys financial protection even if something were to happen to you. The investment aspect allows you to grow your funds to secure your child’s future. You can use the corpus you build up to finance your child’s higher education and career goals. Since the investment allows you to grow your money, it is a better option than saving, which cannot counter the effects of inflation.

Why Do You Need a Child Education Plan?

Let’s look at how a child education plan can benefit you:

• The plan provides life insurance and an opportunity to grow your wealth through investments to secure your child’s financial future.

• The plan helps ensure that your child receives the education they want with a lump-sum payout at maturity.

• Child plans ensure you develop a habit of saving and investing for your child’s future, which enables you to combat the effects of inflation.

• The plan acts as a safety net, providing financial support to your child in the unfortunate event that something happens to you.

Types of Child Plans

To protect your child’s financial future, you can choose from the following types of child plans:

1. Child Unit-Linked Insurance Plans (ULIPs)

A ULIP offers both insurance and investment opportunities. The amount you pay to keep your plan going each year gets divided into two. One part is used as a life insurance premium while the rest gets invested in a mix of funds. Since you can invest in equities, there is some concern about how a volatile market may impact your wealth growth.

2. Child Savings Plans

Child savings plans allow you to invest but they are not linked with market returns and risks. These plans provide life cover, maturity benefits and tax savings, making them a good and safe option.

How Do Child Plans Work?

Child plans allow parents to choose a life cover amount and how and where they want to invest their money for their child’s future. If anything happens to the insured parent during the policy term, the child receives the payout. We can understand how these policies work better through an example. Someone purchases a 10-year child plan for his 7-year-old son. He opts to make annual payments that get invested for his child’s future. Seven years after purchasing the policy, he meets with a fatal accident. After filing a claim, his son receives regular payouts, which is a part of the plan benefits. His son does not have to pay the remaining three premiums. On maturity, he receives the remaining maturity benefit amount, allowing him to use the money for his higher education.

Features of Child Insurance Plans

When you purchase a child insurance plan, you can enjoy:

1. Building a Corpus for Your Child’s Education

As a parent, you want to ensure that your child has everything they need to succeed. With a child insurance plan, you can build up a significant corpus for their future education. By investing instead of simply saving, you can give your child a higher education abroad or pay for the best engineering and medical colleges in India.

2. Returns That Combat Inflation

If you opt for a market-linked child plan, you could earn anywhere between 10-12% returns on your investment. Since inflation is currently around 6%, your investment allows you to battle inflation with ease.

3. Partial Withdrawals for Emergencies

If there’s a medical emergency, you can make a partial withdrawal against the policy to pay for your child’s treatment. 

Conclusion

Child plans basically help in financial planning for your child's future needs at the right age. As a parent you can secure your child’s future with plans that encompass children insurance plans and children education plans.

Also Read:  High Return Child Plan