Different Types of Child Insurance Plans
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Every parent strives to build a secure future for their children. From their food to education, they care about everything. To provide them with the best of facilities and to make their future worry-free, money is important. However, to ensure your kid does not have to struggle financially for future needs, all you need to do is pick a child insurance plan. Choosing a policy at the right age and time can provide your child with comprehensive protection. Let’s dig into the understanding of child insurance plans to make it happen.
What Is A Child Insurance Plan?
A child insurance policy is an investment plan offered by many firms for the safety of your child’s future goals and dreams. It provides life coverage and offers flexible payouts during all the crucial steps in the life of your child. The insurance plan is one of the best possible ways to save money with regular investment for your child’s future. There are different types of child plans which you can choose from.
Types of Child Insurance Plan
There are different types of child insurance plans available in India:
1. Child ULIP
The child ULIP comes with three-pronged advantages including high insurance coverage, regular investments and contribution in the equity market. These benefits sum up to the result that the nominee child will be entitled to get the sum assured in the event of the demise of the parent or legal guardian. Also, the future premium payments will be waived off on the death of the parent and the maturity value shall be paid at the time of maturity. However, the payouts during maturity are determined by the market, which makes the plan good for long tenures like 10-15 years. Under ULIP plans, firms give different options between various investment funds to make you get more money than you invested.
2. Child Endowment Plans
The investments made by you are put into various debt products on the basis of the decisions made by the insurance company. Although the returns on such investments are not that huge, it gives guaranteed security to your money due to the very low level of risk involved with it. These insurance plans provide you with stable returns on your investments in the form of bonuses over the amount of policy sum assured. Generally, bonuses on traditional insurance plans are disseminated from the 2nd year onwards. However, you can check if the bonus released is in cash or if a reversionary bonus shall be compounded or it will be calculated with simple interest.
3. Regular Premium Child Plan
The financial condition of every individual varies due to which many parents may not be able to pay for an annual premium in a go. This will allow them to continue with the plan without any break. Under such plans, the parents are required to pay the premium monthly, quarterly, or half-yearly, based on their income and convenience. Such premium payment cycles are suitable for many people due to their less amount and several benefits personalised to the schedules.
4. Single Premium Child Plan
These plans allow parents to pay the policy premium in lump sum amounts at a single time for the entire policy term and become worry-free from the hassle of remembering the premium due dates. Also, the single premium plan will also free you from arranging finances for the payment of policy premium at regular intervals. Some insurance companies additionally provide attractive discounts or reduce the amount of premium on child insurance plans.
Conclusion
A child insurance policy is the best pick to secure your child’s future. To figure out the best plan for your child, you need to have a clear understanding of the type of plans available in the market. Different types of child plans are explained in this article going through which you can opt for the right plan for your child.
Also Read:
What Are The Key Benefits To Be Considered While Buying Child Insurance?
Important Information You Need On Investment Plans For Your Child
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
